The Tithes Are Turning: The GoFundMe Story

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S1: Sorry, I’m just, like, obsessed with this, Rachel Munro is a contributing writer for The Atlantic. Last year she reported on the charity drive that was happening on Go Fund Me, an online platform that lets people raise money for all sorts of causes. In this case, the cause was building a wall on the U.S. border with Mexico.

S2: We’re going to build the wall. We have no choice. We have no choice.

S1: The wall was one of President Trump’s central campaign promises, but Democrats in Congress had blocked the funding. The Rebuild the Wall campaign urged citizens to contribute their own money through Go Fund Me.

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S3: The original plan for the While campaign was that they were going to raise a billion dollars and deliver it to Donald Trump, who would then use it to build his big, beautiful wall is a private group now putting up sections of the border wall in the El Paso area, and it’s using private donations to fund.

S4: In just five days. It’s raised over 13 million dollars due to donations from America.

S1: This campaign went viral. It raised more than 25 million dollars from regular people donating hard earned cash. Some of that money paid a private contractor to erect a small section of wall. After it went up, there was a celebration at the building site just outside El Paso featuring appearances from various right wing luminaries who’d been involved in the campaign. Rachel went to cover it.

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S5: This project is a result of more than three hundred thousand Americans coming together to donate an average of sixty thousand dollars to give us the resources we need to finally take action.

S6: That’s Don Jr. was there. Steve Bannon, like, touched me.

S1: But it turned out that a lot of the money from the campaigns go fund me page wasn’t spent on the wall. Instead, it went straight into the pockets of some of the organizers, including Bannon, the former Trump adviser.

S2: Just into our newsroom, Steve Bannon, an ex political adviser to President Trump, has been arrested this morning.

S7: And we’re just getting details in right now about why he was taken into custody in connection with some sort of online fundraising scheme against federal agents, arrested Bannon on board this one hundred and fifty two foot luxury yacht earlier today after prosecutors filed a damning indictment against him, accusing him, along with three associates of stealing more than millions million dollars from a fundraising campaign designed to build a portion of President Trump’s Mexican border wall. Well, tonight, the president is distancing himself from the former architect of his 2016 campaign, saying he hasn’t dealt with Bannon for a long time, haven’t been dealing with him at all.

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S8: I know nothing about the project other than I didn’t like. When I read about it, I didn’t like it. I said, this is for government. This isn’t for private people. And it sounded to me like showboating.

S6: It was the least surprising news story I’ve read in a while.

S1: Brian Age, the chief organizer of this alleged scam, had previously been kicked off of Facebook for spam activity. Rachel says schoolFeed saw Go Funmi, which is supposed to be a place to raise money for good causes as instead of sort of Facebook alternative, a place where you can post your content and push it to go viral. But instead of likes, what you get back is hard cash.

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S6: The sense that I get is that he realized like, oh, here’s a new platform, one that I haven’t been banned from. That is a way to not only disseminate ideas, but also make money while doing it.

S9: Go Fund Me has been around for more than a decade. It’s backed by Silicon Valley venture capital and has become a huge force in the world of philanthropy with more than nine billion dollars donated through the platform so far. But this we build the wall campaign in both its stated intent and its criminal outcome touched on a lot of things that make people uncomfortable with Go Fund Me, like the idea that it turns charity into another form of social media, that it enables scams on a massive scale, that it encourages people to replace government action with privately funded initiatives. In Rachel’s eyes, go for me is something new and disruptive that changes the way we think about charity.

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S10: I live in rural Texas and there was a strong tradition around here where, you know, like Mrs. Garcia needs a knee replacement. Like we’re all going to sell brisket in front of the post office this week to raise money. And all of a sudden, over the course of it seemed like a few years that all transitioned to something that was happening over a digital platform.

S1: Should we be concerned that our best, most selfless intentions are now being co-opted by big tech? What happens when Silicon Valley tries to profit off charity? I’m Seth Stevenson. Welcome to Thrilling Tales of Modern Capital. Today on the show, the tides are turning the Go Fund Me story. Go Fund Me was launched in embryonic form in 2008 in San Diego by a pair of guys who’d worked together at previous startups.

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S11: We knew that if we came up with the right idea that felt natural to us and something that people would use, then we could build something interesting together.

S1: That’s given me co-founder Andy Ballester a couple of years back, describing how he and his partner Brad damps started the company. At first, what they had in mind wasn’t a donation site. It was a site where people could save up for their own needs or goals.

S11: We call that original product coin piggy.

S1: The problem with Coin Piggy was that given the various fees involved with transferring cash in and out of it, it was hard to actually accumulate any money at all.

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S11: It’s almost like a savings account with a negative three percent interest. So out of the gate, it’s a pretty bad product.

S1: But in the course of developing coin Piggy Ballester and Damp House discovered that lots of people didn’t want to just save their own money. They wanted other people to donate to their cause, even if that cost was just buying themselves a new TV.

S11: And we started talking about, all right, well, forget you know, you trying to save up for what you wanted. What can you say about for socially? And we kind of backed into this idea of personal fundraising.

S1: At first they called it creative fund, but by 2010, they’d renamed it Go Fund Me. It wasn’t the first ever donation platform. Kickstarter, for example, had come before it. But Kickstarter was mostly about people donating to help fund the development of an exciting new product or service go fund. We became a place where people donated to help someone go on a vacation or get a medical procedure or feel better after something unfair had happened to them. There were also big feelgood campaigns for things like hurricane victims or survivors of the Boston Marathon bombing. And according to Atlantic writer Rachel Munro, school funding became a place where people expressed themselves through their donations in a way that feels different from, say, giving an annual gift to your local art museum.

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S6: It was also a way that people would get activated emotionally by some story in the news, whether it outraged them or made them really sad or even sometimes if it was like really funny, somebody was like doing something really charming and giving a few dollars was a way to sort of almost participate in this news story or this viral moment or just to show somebody that you appreciated what they were doing or you were mad at what somebody had done. To them. It feels less like charitable giving and more like some form of social participation in a way.

S1: Go fund. These co-founders first met at a startup where the key activity was developing viral content stuff that would get forwarded around on the Internet. Rachel thinks that’s central to go fundrise identity.

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S10: It’s also very notable to me that it was a platform started not by people in the nonprofit industry or social workers or people from foundations even, but by marketers. Right. It’s fundamentally a marketing platform. And if we turn that allocation of need and charity into something that’s dependent on marketing, that they’re like a lot of bad implications to that.

S9: When pleas for personal financial help get swirled up with social media and Internet vitality, the effects can be distorting charismatic people and carefully presented stories. The kind that gets spread around on Facebook can divert attention and dollars away from other equally worthy causes. You can see this happening when you look at what succeeds and what doesn’t even go fund me if you like.

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S10: Scroll past the first page of very successful results. You’ll start getting to ones where people have raised zero money. Sometimes their stories are really confusing. Sometimes there are no photos, sometimes they haven’t spelled things correctly. But that doesn’t mean that their need isn’t real.

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S1: Rachel met one couple that started to go fund me to raise money for the wife’s medical bills. They didn’t get much traction at all and it left them wondering why.

S6: I remember the husband telling me that he had started this bad habit of he would scroll through the successful go find ways that are like blasted all over the front page. He was really upset about all the pets, you know, like people who, like my pet hedgehog broke his leg and made a tiny little hedgehog cast or something. People who are donating hundreds of thousands of dollars to animals and he couldn’t get a thousand dollars, you know, for his wife and and just feeling devalued and feeling like there was something about their suffering that wasn’t good enough or didn’t matter enough to people. And they both ended up feeling kind of bitter and overexposed by the whole experience.

S9: This sort of outcome exposes the everyday downside of Go Fund Me, where money sometimes flows to rather dubious campaigns while deserving people come up short.

S12: You could argue that’s the luck of the draw or that people who fail to get money should have tried harder or that we should just be happy for the people who do succeed on the platform. You could also point out some of Gothamist truly heartening accomplishments, like, for instance, pulling millions of dollars for the families of victims of the nightclub shooting. But beyond the worthiness or unworthiness of the individual causes, you can find on the platform there look broader, more pernicious problems with the entire go fund me model.

S13: If we had well-funded universal health care, that would certainly be a hit to the platform. More on that when we come back.

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S1: Laura McDonald has been helping nonprofit organizations raise money for two decades. She currently chairs the board of the Giving USA Foundation, which studies charitable giving trends, who’s giving how much and why?

S14: And I guess all that adds up to say that I’m a big old philanthropy geek.

S1: Laura comes from the more traditional world of philanthropic giving museums, universities, multimillion dollar fundraising campaigns with huge direct mail operations. When I got in touch with her to talk about Go Fund Me, I expected her to be suspicious of this upstart tech company invading her turf, but she didn’t see it like that. For instance, she says the idea that more charismatic or better framed causes might win lots of donor money, while equally deserving but less slickly presented causes get ignored is by no means unique to go fund me, she says. People asking for help in any venue won’t succeed without making their case in a compelling way.

S14: There is no end of worthy causes out there. And if all you want to do is say, our organization so worthy, our work is so important. That is simply going to put you on a level playing field with hundreds, if not thousands of other equally worthy organizations.

S1: Laura also isn’t concerned that Go Fund Me might cannibalize donations from established charities.

S4: Charitable giving makes people feel good. Giving makes people feel good. And so if they make a gift to a neighbor in need, a household that’s been affected by the fires out west or will be affected by the hurricanes in the Gulf, and they make a direct gift to an individual and that makes them feel good. I think that only increases the likelihood that they’ll also see an opportunity to express their generosity to the local food bank or college or university or what have you. So if there is resentment, I haven’t encountered it and I would call it misplaced.

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S1: But Laura still thinks there are some problems with Go Fund Me. For one thing, she says it allows scammers to thrive in a way that would be far harder to pull off using a more traditional fundraising approach. There’s a site called Go Fraud Me that catalogs shady doings on Go Fund Me. You can find people faking cancer diagnoses to get a few thousand bucks or starting a campaign on behalf of a needy friend and then just keeping the money. And of course, there’s the rebuild the wall fiasco where the organizers bilked millions of dollars out of unsuspecting Gulfam users.

S14: I do think that it’s something that’s enabled by these platforms because it allows these organizations to move at lightning speed so quickly that it’s difficult to really thoroughly that the validity of the cause and the use of the funds, which isn’t to say that there hasn’t always been abuses in charitable giving, but I do think that these platforms do enable an organization to pop up, exploit the marketplace sentiment and then just as quickly fall back and not really leave the kind of trail that more traditional organizations leave when they’re doing their fundraising.

S1: Laura also thinks Ghofran can encourage what she calls fast food philanthropy, a quick jolt of self-satisfaction instead of a commitment to making recurring gifts to a cause or institution we want to support for the long haul.

S4: Frankly, I think that a year later, people probably aren’t even giving a second thought to the twenty five dollar gift that they made to that hurricane victim.

S12: Why is that?

S4: Well, first of all, a gift of that magnitude is what I would call a go away gift. It’s like my friend asked me to do this. I’m going to make a gift. That’s enough to say I lent a hand. But other than the sort of immediate gratification thing, it’s not really something that I’m emotionally invested in.

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S1: In the early days of Go Fund Me, it’s co-founders bootstrap their project, meaning they raised enough money to run it themselves instead of getting big outside investments with strings attached. They felt that gave them some independence over how they ran off on me. But in 2015, they allowed investors to take over the company, accepting venture capital money that valued Go Fund Me at about 600 million dollars. The company had been headquartered in San Diego since its launch, but now it opened up new offices in Silicon Valley. It also appointed a new CEO, Rob Solomon, who’d previously been at Groupon, where he’d scaled up that company’s blend of social connection and commerce. In an interview a couple of years ago, Solomon made clear the new VC backers behind Geophony had high expectations.

S15: You know, the investor group that put money into for backed Facebook and LinkedIn and Expedia and Netflix, so there their hope is that we can do for the giving space what LinkedIn did for jobs or Netflix did for entertainment or Twitter or Facebook have done for communications. They think that we can create a big network company that changes the space and giving and disrupts the space.

S1: Do you think off on me as a force for good or not so much?

S6: I think that’s an overly simplistic question.

S1: I asked Rachel Monroe, the Atlantic writer, about this transition from bootstrapped startup to big time Silicon Valley tech firm. I mean, I’m sure there are lots of good hearted people there, but it sort of seems worrisome when there’s tons of venture capital money behind something that it’s like hard to believe that it’s just being done out of the goodness of people’s hearts.

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S10: Definitely. And you started to see some of the language go from like, we want to be your home for giving to we want to be this enormous company where, like, every charitable donation flows through our platform in some way.

S12: This year, Souleyman was replaced by another CEO, Tim Cadigan, who has a background in programmatic advertising, continuing the threat of marketing expertise that runs through on Meece DNA.

S1: It’s a clue that the site is hoping to extend its reach even further. Goofily still represents a very small portion of America’s philanthropic activity, but it says it’s processed more than nine billion dollars worth of donations so far. Its major goal these days is to convince large institutions, places like UNICEF, to start doing their fundraising and go fund me. And as it keeps trying to grow and to bring more kinds of giving under its umbrella, go fund me might even start to have real influence on America’s social compact.

S3: There’s that joke that goes around Twitter when somebody posts off.

S10: I mean, it’s like, I don’t know, like what if we all donated, you know, a certain proportion of our money to this, like a giant pool of go fund me that would pay for everybody’s medical bill, you know, like essentially that’s the health care system that we need, that we just need to frame it as a Silicon Valley disruption.

S1: A large percentage of donations on go fund me, go toward helping people with illnesses and large hospital bills, people in need of medical procedures, turning health care funding into a contest to see who can put up the most compelling go fund me page with the losers unable to pay for treatment they need. Seems like a bad road to head down.

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S10: I don’t think that it’s in itself a bad idea to have this platform that makes it really easy to pull money to a person who needs it. But when it gets troubling to me is when that starts acting as though it’s going to replace other kinds of giving. And that’s always been a tough spot for the executives to talk about, to realize that they are in some ways benefiting by the holes in the social safety net.

S1: Geophony used to charge a five percent fee on donations made through its platform, but in 2017 it dropped that fee. Now, when you make a donation through Go Fund Me, the site suggests you tip the company. The default tip is 15 percent. The other options are 10 percent and 20 percent. To tip nothing, you have to click other and enter zero.

S3: As your tip seems strange to me, to think that you would be tipping the corporation doesn’t really make a ton of sense to me.

S12: But apparently the viable enough business model that they’ve kept on that tipping model, in other words, go fund me itself is relying on donations for support, just like its users do. Well, sort of its users beg for the donations they get. Go for me, just piggybacks on their efforts, hoping to get another cut out of the kindness of people’s hearts or out of people not noticing a 15 percent tip is go fund me default option. In one sense, I do have to credit. Go fund me for putting their money where their mouth is by making its revenue a charitable gift of sorts. At the same time. I don’t love what this implies. A future where all of our income is derived from the kindness of strangers, where all our needs are either met or not met because someone felt moved to drop a little change into our cups. That’s our show for today. This episode was produced by Jess Miller with help from Quinlivan Technical Direction from Kevin Bendis and Merritt. Jacob Gabriel Roth is Slate’s editorial director for audio. Alicia Montgomery is the executive producer of podcasts at Slate. June Thomas is senior managing producer of the Slate podcast network. Next week on the show, what happens when a company that’s built a reputation for being nice is publicly accused of building an internal culture that is not you know, it’s pretty unusual to see a lawsuit for discrimination from a C suite executive. That’s next week on Thrilling Tales of Modern Capitalism.