As containment is finally being reached in the tragic North Bay wildfires that have taken 42 lives and scorched more than a quarter of a million acres, many of us watching from afar have been compelled to express our sympathies with online donations to crowdfunding campaigns on sites like GoFundMe and YouCaring. The runaway success of these campaigns, which have raised at least $7 million total, has brought to light a macabre little secret about the crowdfunding racket horrible tragedies are great business for them. The Chronicle recently noted that big disasters are handsomely profitable for crowdfunding sites, and a Change.org petition asking GoFundMe to waive their fees on wildfire victims has nearly 90,000 signatures as of press time.
“The more money that gets raised, the more money they make,” Sebastopol resident Eric Kim told the Chronicle after analyzing the top crowdfunding campaigns. “I’d bet that this will be a record profitable year for GoFundMe, capitalizing on all the disasters this year.” That’s one upside to global warming-related disasters, I guess!
GoFundMe, in particular, is facing backlash over their use of a five percent charge on all donations. The Chronicle assesses that with about $6.5 million raised on that platform for North Bay fire victims, GoFundMe has profited to the tune of $330,000 from the fires. But the company has pledged $250,000 to wildfire relief, so perhaps in this case it’s mostly a wash. (YouCaring, meanwhile, makes its money from adding a “Tip” button for donations.)
The companies claim the extra revenue is critical to fight fraud and ensure proper customer service. “Every campaign — regardless of size or attention — is critical to the person who started it,” GoFundMe spokesperson Kate Cichy told the Chronicle. “This is why our 5 percent fee remains in place for all campaigns on our platform, even in times of disaster or emergency.”
But GoFundMe was recently given valuation of around $650 million on which they are totally raising venture capital and Facebook is diving into the crowdfunding game too. If it weren’t big money, tech investors wouldn’t be interested. But there is some suspicion that these campaigns draw away from traditional fundraising organizations like the Red Cross, and will foster another round of “We’re just a platform” excuse-making for tech industry ethical dilemmas.
In another aspect of the fires helping the rich getting richer and the poor get poorer, we learn via KQED that the family of the firefighter who died fighting the Napa fires may not receive any workers’ compensation for his loss of life. Paiz was a volunteer firefighter, though at the time of the accident was driving for a contractor called Tehama Transport, who classified him as a “owner/operator.”
“Under that classification, the company was saying that Paiz either had ownership in the company or was a relative of someone who did,” writes KQED’s Ted Goldberg. “Without that coverage, Paiz’s family, his wife and teenage daughter, might lose out on hundreds of thousands of dollars in benefits.”
Tehama Transport has not been returning requests for comment of the matter of Paiz’ death. But rather than making an exception and providing has family with workers’ compensation, they’ve started you guessed it an online fundraising campaign.