Saturday, June 23, 2018
Business

Crowdfunding quickly raises money for Orlando shooting victims — at a price

The fund intended to bring financial relief to victims of the Pulse nightclub shooting is a crowdfunding website that charges fees of 7.9 percent for all donations.

The civil rights group behind the fund defended paying the fees because the GoFundMe website was set up and accepting donations within just six hours of the shooting. It took city officials two days to set up their own fund.

"We would have had to pay some processing fees but ultimately this was the quickest, fastest, most effective way to reach the most people possible," said Michael Farmer, spokesman for Equality Florida, which backs LGBT rights.

His group had hoped to raise $250,000. Just a day after the shooting, it had raised more than $2 million. Thursday, it hit $5 million at 9 p.m. from 104,000 donors.

Equality Florida's Pulse Victims Fund became the "largest and fastest-growing" campaign in the GoFundMe's six-year history, said the technology company's spokesman Bobby Whithorne. Within hours, he said, the GoFundMe site went viral, with links being shared on social media sites and by the mass media "tens of thousands of times."

GoFundMe was among the contributors. The day after the shooting, GoFundMe donated $100,000 — the equivalent of the GoFundMe's five percent fee to that point. The remaining 2.9 percent is a processing fee that goes to a company called WePay, (similar to PayPal). WePay also made a $25,000 donation.

The fund has raised more than $2.5 million since then, which means about $200,000 in donations will go to pay fees rather than the victims.

"That's an outrage," said Kenneth R. Feinberg, who has played a roll in the victim assistance funds ranging from the Sept. 11 terrorist attacks to the 2013 Boston Marathon Bombings and the Aurora Victim Relief Fund. "I think the idea that there are costs that are being deducted from private donation money is unacceptable."

Whithorne said he does not anticipate the company will make any further donations.

Equality Florida argues that the speed and convenience of setting up the fund through an already established and well-known website has allowed it to make exponentially more money than it would have had it waited to release a more traditional fund like other communities have done.

The GoFundMe website link was included in the national media coverage on Sunday, as people were first learning about the shooting.

Proceeds have already dwarfed that of the San Bernardino office shooting from last year, which raised about $2.4 million for victims. The Aurora theater shooting in 2012 raised about $5.34 million. Both were established through more traditional methods — with the help of the United Way and the Community First Foundation.

The most successful private donation fundraising effort stemming from a similar tragedy was the Boston Marathon bombing, Feinberg said.

"One Fund Boston in the first 60 days raised $61 million," Feinberg said. "I've never seen anything like it in my career."

The reason for its success, he said, was speed and visibility. The day after the bombings, former Boston Mayor Thomas M. Menino and former Massachusetts Gov. Deval Patrick unveiled the One Fund.

"That was one thing Mayor Menino insisted on," Feinberg said. "All funds should be sent to a new single fund. It was One Fund Boston. That fund gathered up all of the money so it wasn't in competition with any others.

"If you don't have one fund, right away you're going to have a problem," he said.

Even the One Fund Boston took 24 hours of frantic paperwork, according to Mitchell Weiss, Menino's chief of staff at the time.

It took two days for Orlando Mayor Buddy Dyer to unveil the OneOrlando Fund to support victims with a fund that complimented the GoFundMe campaign rather than compete with it. The Fund kicked off with $1.75 million of donations from businesses like Disney and JetBlue. The money raised will mostly go to fund community organizations, said Mark Brewer, president of Central Florida Foundation, which is behind the OneOrlando fund.

"This is about funding the system that supports and heals communities. The victims will be taken care of out of other funds," he said.

Contact Alli Knothe at [email protected] Follow @KnotheA.

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