With barely two months into the year, crowdfunding continues to be a major theme in the headlines. Kickstarter alone earned $480 million in 2013. Other players in the segment are blossoming too, like Indie Go-Go. In the first month of 2014, the younger, crazier brother to Kickstarter, raised an impressive $40 million dollars in its latest VC round. Crowdfunding is real, and if the investors are interested, it’s probably here to stay.
How does this increase in donations impact disaster relief?
After the vicious beating east coast cities took from Hurricane Sandy, institutions like the American Red Cross committed major relief efforts to supplying aid for those affected. But with an organization as large as the Red Cross, there is a need for more targeted, micro-focused donations. In steps Gofundme.
This emerging platform allows individuals and communities to raise money and puts it back in the hands of those who need it without all the red tape – no pun intended. For Sandy, GoFundMe raised $1.58 million for victims and their families. While it may seem like a lot of money, this represents less than a single percent of the $303 million raised by the American Red Cross. More accurately, a drop in the bucket, especially when you factor in the estimated $65 billion in damages. The upside, this money goes directly to the end recipients and isn’t used to pay for administrative or other costs that come from running a large multi-national corporation.
Just as Twitter has given soapboxes to millions, crowd-funding is giving out the materials to construct a parachute for you or someone else. The use of social media has been a springboard for crowd-funders, and will continue to give the means for crowdfunding to change how we identify problems and solutions in need of help. Will crowdfunding end suffering? No. Will it have an impact? Yes. Only time will tell how large or how fast the results will be felt, but one thing will always remain, it sure feels good to give back.