1 Dec 2015

The rise and rise of crowdfunding

4:46 pm on 1 December 2015

British 17-year-old Becki* found a recent family move to Auckland like "finally finding my home. Everything here is so new and wonderful."

But there was just one problem: Becki's best friend, Bekah, was still in the UK, 18,000km away.

Becki, a high school student unable to find part-time work, turned to the internet for a solution and started a Givealittle page to try to raise $4000 to cover Bekah's travel to New Zealand, including flights, food, travel insurance and general expenses.

The page sparked outrage: Becki received violent messages - even death threats - from members of the public. But, she said, the page was the only way she could hope to have her friend come to visit.

Donate on keyboard

Photo: 123RF

Givealittle is a fundraising site on which anyone can raise money for a cause they think is worthwhile - however unusual.

On the page's description, Becki explained her predicament, and encouraged people, if they had any loose change, to support the cause.

"As it's unlikely I will return to England for at least a decade, I know that this will be my last opportunity to see Bekah again."

And, in the five weeks since the page was created, 18 people have parted with their spare change, to the tune of $1222.

Becki's page is not unusual: there are no shortage of Givealittle pages set up to fund people's dreams, from a better computer ("so I can stream games in better quality") to drama study in New York.

Computer in a box

One Givealittle user set up a page to fundraise for a new computer that would stream games in better quality Photo: 123RF

Crowdsourcing dreams

Natasha Hutchinson, from Canterbury, was selected as a Grand Finalist at the Face of the Globe pageant, held in France. She's hoping to raise $6000 to get to Europe to compete at the international beauty pageant, with any extra money going to the Rainbow Child Foundation.

"Being a plus-size, short woman, I want to inspire other women to love themselves inside and out.

"I want to be a role model to everyone and change the world."

Was this what was envisaged when Givealittle was set up? The New Zealand-based site was created in 2008, and - according to media reports at the time - hoped to change behaviour and attitudes to engaging with charity and the non-profit community.

Then-chief executive Nathalie Hofsteede told investment manager Movac it had been set up to normalise giving time and money, and to lower the cost of fundraising for New Zealand's non-profits and community groups.

Today, it is owned by the Spark Foundation, which purchased it three years ago.

Spokesperson Tom Beyer told RNZ it was crucial the site remained as neutral as possible - one of its key values.

"The intent today is still around enabling people who feel they have a need or a cause to attract a crowd to fundraise for that cause."

It was up to the individual to decide whether they had a cause, he said, which was ultimately proven worthy by whether or not people chose to donate.

"It's important that we play a neutral role in that process, and that means we don't pass any judgment on what people think their need is.

"We believe that New Zealanders are intelligent enough to choose where they put their dollars," he said.

Why ask strangers for money?

The crowdfunding industry incorporates all manner of things, of which business ideas, creative projects, and charitable causes are just a few. It is huge: in 2013 alone, it raised over $US5.1 billion - and these days, it is even larger.

Why do people feel so comfortable requesting money, especially when it's for self-serving purposes? Possibly because people are prepared to give - and the more they do, the more normalised crowdfunding holidays, education or even weddings become.

Recent studies have shown American donors will donate up to twice as much money if it will serve the needs of an individual rather than a group.

The terminology has also helped: the word crowdfunding might as easily be borrowing, begging or soliciting, but the new term makes it appear an entirely new phenomenon.

Moreover, the fact that it operates online removes the need for any uncomfortable real-life interactions.

But Mark Ivester, author of the book lol… OMG!: What Every Student Needs to Know About Online Reputation Management, Digital Citizenship and Cyberbullying, said crowdfunding for individual causes expended a huge amount of social capital, and so would only work for a limited number of personal projects.

Promoting giving to the general public

In terms of user traffic, Givealittle has been a huge success: in the quarter ending June 2015, a grand total of $6.4 million has gone through the site - up almost $4 million from the previous year.

Fundraising Institute CEO James Austen spoke warmly about how Givealittle had helped promote giving to the general public, and said it had been hugely beneficial for charities and organisations.

"It's one of the few sites that does allow anybody to go on there, but they do have a vigorous checking system," he said.

New Zealanders had historically been involved in charities at all levels, whether giving to individuals in need or to larger organisations, and this helped to facilitate it, he said.

"This is just another vehicle to do so."

But he said people did need to be aware of who they were giving to, and it wasn't the responsibility of Givealittle to check out the validity of causes.

"For individuals, there has to be an element of buyer-beware. You have to check these things out yourself," especially as people would not receive tax receipts, Mr Austen said.

Instances of fraud have been very rare though, in April, an Auckland woman, who was granted name suppression, appeared in the Auckland District Court and pleaded guilty to five charges of obtaining by deception.

Three of the charges related to her Givealittle page, on which she raised almost $14,000 from about 200 donors, including family, when she claimed she had terminal cancer.

At the time, general manager Lynn Legros said it was the first case of its kind to go before the courts in the website's seven-year history.

"The case itself is saddening in terms of there was that deception, but that deception was of people close to the individual concerned so that could have been done in real life and didn't need the internet to do the deception itself."

But Mr Beyer said the case was unusual enough the site wasn't worried about future instances of fraud.

The site doesn't vet the cause itself, but it does have a verification process to make sure the bank account matches the name of the people involved. A note saying the cause has not been moderated comes up until the person has persuaded three donors - usually friends or family - to donate.

There are strict terms and conditions around uses of hate speech or defamation, but as far as the 'worthiness' of the cause goes, almost anything is permissible.

Bailing out the uninsured

car crash

Givealittle is frequently used to help people following car accidents Photo: 123RF

The service has frequently been used to help uninsured people who have been the victims of car accidents or burglaries.

Aucklander Natalie Smith set up a Givealittle page to help Daniel Bohte get a new car, after his own, which was parked in the drive, was crashed into by a gang of youths driving a stolen vehicle at "approx 140kms in a 50kms zone".

"The driver lost control and rolled the car, causing a crash with a parked car on the street along with flipping onto Daniel's car that was parked in his driveway.

"Thankfully everyone came away unhurt," she wrote.

But Mr Bohte, who doesn't have any car insurance, is now left without a car, which he needs to get to and from work.

In a similar vein, helpful friends and family have set up Givealittle pages for people without contents insurance who have been the victims of burglary - in some cases raising well over $1000.

Dire straits?

The site is also teeming with tragedies and people in very dark places, for whom Givealittle has provided a little chink of light.

Tauranga mother-of-three Amanda Hacche had a well-established business in human resources and employment law when her eight-month-old son Devon swallowed a battery. He suffered extreme corrosive burns to his oesophagus and has since been in paediatric intensive care where, so far, he has had five surgeries.

Devon had been a happy, healthy little boy - but now faces a future where he may never breathe unassisted, talk or make a sound again. Ms Hacche has had to give up her job to be at his bedside.

The outpouring of public support for the family has been tremendous: $63,107 has been raised so far, and Devon - though still very sick - is beginning to mend.

Ms Hacche took to Givealittle to thank those who had supported the family.

"I want to sincerely thank each and everyone you for the depth of support offered, gentle kindness and incredible generosity you have shown our wee family," she wrote.

"The intensity of our situation is very overwhelming at times so I will sit with Devon and I will read back over your comments to find a bit more inner strength to keep going."

Inevitably, people vote with their wallets - and it is those in dire straits, like Ms Hacche and her family, who have received the most public support - and funding - from Givealittle in their time of need.

*First names have been used to protect Becki and Bekah from further threats.

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