So, this article articulates well some of the things that lead to my deep dislike for #crowdfunding websites. I even hate the term, it’s stupid. It just is asking your friends (and non-friends) to help you out, no different than has been done for thousands of years, but of course now we need a buzzword for it.
The thing that bothers me the most about them is that you are paying exorbitant fees to play the viral lottery, which you are not going to win. Most of them charge 5%-12%, plus additional fees for setup and credit card processing. If you need to raise money, just do it yourself. Ask your family and friends (and all your non-friends) for checks and cash. Bank transfers work. There are a variety of credit card processors that are WAY cheaper than a crowdfunding site.
For startups and the for-profit sector that can offer goods and services to their early-stage funders, this is not as bad, but still, they pay high fees for it. But, for the non-profit, individual needs, and artistic sector, we are talking about profit-taking from their services and needs. If your son is dying of cancer and you need some help, is it really okay for a big corporation to make 10% off his medical fundraising?
In addition, is it even worth it to pay that fee? What service do these sites provide that cause them to be worth that much? Do they market your need to potential donors? No. They are essentially glorified credit card processing services that charge what would be illegal fees if they were described as what they are, rather than as “crowdfunding” sites.
While I am not as anti-capitalism as the author, he does make a good point that the break down of our social services serves as a profit-center for these for-profit crowdfunding sites. Should big corporations be making millions off issues like homelessness, unequal education, hunger, sickness and such? Is that okay? Are these companies incentivized to lobby against social services and other public good works in order to bolster their bottom line?
Anyway, the article is a long read, and now you’ve read my long commentary on it, so I will shut up and let you get to it. I don’t agree with everything he says, but I do very much think we need to reassess our love affair with “crowdfunding” websites.
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