Tapping Your Social Network to Crowdfund Your Medical Bill

Tapping Your Social Network to Crowdfund Your Medical Bill
July 01 01:00 2014

Tapping Your Social Network to Crowdfund Your Medical Bill

Although the media buzz around crowdfunding is new, the practice has been around for well over a century. In fact, the pedestal for the Statue of Liberty was crowdfunded, an initiative by none other than Joseph Pulitzer, founder of the Pulitzer Prize. With the help of technology, the World Wide Web, and most recently social media, crowdfunding is bigger than ever, and today medical bills are among the most popular targets.

It’s for good reason, too. According to the National Bureau of Economics Research (NBER), about half of all Americans couldn’t come up with $2,000 in an emergency. Insurance deductibles can be as high as $6,350 for an individual, and there are things insurance doesn’t cover, so that’s problematic for most people. This is no secret, though, and as a result crowdfunding sites have popped up all over the internet to help people pay medical bills they can’t afford.

How it works
Basically, crowdfunding allows you to collect money from friends, family, and strangers during a time of need. To start, you’d set up an account with a page on a site like gofundme, GiveForward, or CauseWish with the the permission of the beneficiary, if that’s someone other than you. Here, people can read about your cause and donate money in any amount they wish— anonymously if they so choose — until you reach your goal amount. Some websites let you continue receiving donations after your goal is met, and some will return money to donors if the goal is not met.

Typically the site helps you spread the word about your cause, either by providing a fundraising coach, or by providing social media help and tools. It is common for the fundraiser’s creator to campaign for funds on Facebook, Twitter, and other platforms. Generally, the fundraising site has tools to help you, and GiveForward even offers a fundraising coach at no cost. The website makes money by charging a percentage of the donations, either to you or to your donors—some let the donors volunteer to pay this fee, and most donors agree. Charges are similar to sales tax: about 4% to 9% of total donations in addition to a transaction fee for each donation.

Questions to ask when choosing a fundraising site
Is the site reputable? There are some fraudulent crowdfunding sites out there, so check online reviews before choosing. Also, check sites’ About and FAQ pages to learn about different perks, prices and guidelines and compare. You can start with those linked below.

Do I have to meet my goal to keep the money? Though it’s uncommon, some sites won’t let you keep donations unless the goal is met, and return funds to donors if the goal isn’t reached. Most reputable fundraising sites clearly advertise that they have no goal requirements, so check for that term.

Do I need help with social media? If you aren’t social media savvy, you’ll want to choose a site that offers help spreading the word. The most successful crowdfunding campaigns have a broad social media presence.

Is the site secure? Make sure the site promises a secure payment method like PayPal or WePay. Both payment systems are considered secure and FDIC insured. However, it’s important to note that WePay does not accept donations outside of the U.S. while Paypal caps single donations by credit card to $4,000.

What do they charge?
Most crowdfunding sites charge similar rates, but not all of them allow personal fundraisers, or those for medical bills. Some of the bigger names you may have heard, like Kickstarter and Indiegogo, are purely for creative endeavors, intended to help the proverbial starving artists of the world. Others, like Causes, CrowdRise, and FirstGiving, are only for nonprofits and charities. With that in mind, here are what some of the top crowdfunding sites for personal medical fundraising charge that offer secure payment methods, either PayPal, WePay, or both.

Read full story at NerdWallet (blog)
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