Editors’ Note: Jeremy Snyder discusses the role of crowdfunding platforms as charitable intermediaries, based on his new book, Appealing to the Crowd: The Ethical, Political, and Practical Dimensions of Donation-Based Crowdfunding (Oxford University Press, 2023).

After natural disasters, high profile tragedies, and other major news events, it is now commonplace to see a proliferation of related crowdfunding campaigns, which give the public a chance to quickly and easily help those impacted. This kind of “person-to-person” giving puts money directly into the hands of people in need and allows the donor an immediate and highly personal view of the effects of their gift. In this way, crowdfunding could be seen as more consequential and meaningful than giving through intermediaries like philanthropical organizations. However, as I discuss in greater length in my book Appealing to the Crowd: The Ethical, Political, and Practical Dimensions of Donation-Based Crowdfunding, the reality of crowdfunding as a transformative and disintermediated giving practice is much more complicated than it initially seems.

The US Federal Trade Commission emphasizes the disintermediated nature of donation-based crowdfunding, describing it as “a way to raise funds online, person-to-person”. GoFundMe, one of the world’s largest donation-based crowdfunding platforms, highlights the direct nature of crowdfunding as well. According to GoFundMe, crowdfunding has “transformed the traditional fundraising landscape, breaking down barriers between those in need and those available to help them. Crowdfunding has made it possible for people to offer direct support”. Donation-based crowdfunding is described as an organic and disintermediated process where “a group of people (the ‘crowd’) comes together to raise money (the ‘funding’) for a cause that they believe in”. The advantages of crowdfunding, on this view, are that it cuts out the middleman, allowing campaigners to receive help directly from their community without the need to apply to a philanthropic or government organization for help or endure a waiting period to receive funds. The platform itself, and its status as an intermediary, fades into the background, simply serving to “empower people to rally support for personal and charitable causes”.

The rapid growth of donation-based crowdfunding is driven in part by increasing distrust of institutional intermediaries. Traditional philanthropies and other charitable organizations serve as intermediaries between donors and recipients, providing expertise, long-term vision, and institutional oversight that is intended to ensure that donations are impactful and create sustainable benefits. However, erosion of trust in traditional philanthropies is pushing especially younger and more diverse donors toward crowdfunding as an alternative. Crowdfunding donors in the US average 44.2 years of age compared to 49.9 years for traditional charities and are more likely to be non-White than donors to traditional charities. These donors find traditional intermediaries suspect, but, as Vox reported in 2022, “they are much more willing to give directly, whether it’s by donating to an individual’s GoFundMe request to help pay medical bills or rent, or even seeing a neighbor’s post on NextDoor and buying groceries for them.”

Direct giving through crowdfunding also seems to address an increasingly common concern that philanthropic organizations undermine democratic values and processes for determining which causes and needs are prioritized. Philanthropic giving is dominated by the wealthiest members of the public who endow philanthropic organizations, sit on their boards, and have the power to set their giving and policy priorities. Philanthropic gifts are subsidized in many jurisdictions through tax deductions, meaning that funds that would otherwise have been directed through democratically accountable institutions are controlled disproportionately by a wealthy elite. While giving is not limited to the wealthiest, of course, philanthropic institutions have created a system where the voices of the wealthy count the most and they are in the best position to receive public subsidies for their giving. By comparison, promoters of crowdfunding often present it as democratizing giving, allowing smaller donors to have a more powerful voice in setting giving priorities. On this view, crowdfunding allows recipients and their supporters a larger role in giving by enabling them to appeal directly to potential donors without having intermediaries obstruct their requests. Similarly, smaller donors can use their larger numbers, if not their wealth, to have a greater impact in driving giving priorities.

But in practice, this narrative of donation-based crowdfunding as an alternative to intermediated forms of giving does not match these platforms’ actual role. Crowdfunding platforms are in fact powerful intermediaries in their own right but serve in this capacity in ways that are much less visible than is the case with many traditional intermediaries.

As I discuss in Appealing to the Crowd, crowdfunding platforms act as intermediaries in a variety of ways. First, their decisions about how their platforms and the campaigns they host are designed determine the information that campaigners must share with others, the tone their campaigns take, and what kinds of needs are most likely to connect with potential donors. After creating a campaign, a user may receive email prompts to post more pictures and videos on their campaign page and to provide updates on the campaign recipient’s needs. Campaigners are advised to keep their messages upbeat and focus on positive outcomes. Campaign pages frequently include widgets to easily share campaigns via social media platforms like Facebook and platforms encourage users to distribute their campaigns widely. Platform websites often flag “trending” or other notable campaigns and causes, putting these needs in front of potential donors. Other campaigns are flagged via these platforms’ social media accounts or receive preferential treatment in search results. Thus, through design decisions, nudges to campaigners, and decisions around which campaigns are highlighted, crowdfunding platforms directly shape the content and results of crowdfunding campaigns.

Crowdfunding platforms also decide which crowdfunding campaigns they are willing to host. In North America, GoFundMe has cultivated a reputation for restricting some campaign content from its website. This has included banning campaigns that promote COVID-19 vaccine misinformation and adding resource labels on some other COVID-19-related campaigns, removing campaigns for the legal defense of people accused of committing violent crimes, and restricting and later removing a massively successful campaign for a protest of pandemic travel restrictions in Ottawa, Canada. Regardless of the merits of these decisions, they demonstrate that crowdfunding platforms make impactful decisions about what campaigns they are willing to host and that these restrictions change over time in response to public events.

By comparison, the US-based GiveSendGo crowdfunding platform bills itself as a “freedom-loving” company and states that “Even if we do not agree with you, we will defend your right to fundraise for the causes and people you love.” In practice, this has meant that crowdfunding campaigns that were removed from the larger GoFundMe platform have found a home – and often enthusiastic support – on GiveSendGo. For example, the ‘Freedom Convoy’ campaign protesting pandemic-related travel restrictions that was removed from GoFundMe shifted to the GiveSendGo platform. Following this change of venue, it went on to raise millions of additional dollars. Police officers and January 6 insurrectionists accused of violent crimes have also found a home and success on this platform. So too have a range of campaigns for White nationalist causes. But even “the leader in freedom fundraising” makes decisions about what campaigns it is willing to host and, in some cases, removes them. This includes campaigns to fund abortions based on GiveSendGo’s Christian roots.

Ultimately, then, crowdfunding platforms cannot help but position themselves firmly between donor and recipient. This mediation is often unseen but always present.

One could conclude from this that crowdfunding is just another mediated form of giving, much the same as traditional giving practices. That’s not the case, however. In some respects, crowdfunding platforms are less intrusive intermediaries than traditional philanthropies, allowing individuals in need to create campaigns and individual donors to support them. Crowdfunding platforms shape how these campaigns are presented to the public and which ones are likely to receive the most support, but this is still relatively direct access to donors compared to many institutional intermediaries. In some cases, crowdfunding platforms review campaigns for fraud or to be included in lists of ‘verified’ fundraisers following a high-profile event. But generally, campaigners are able to put their campaign in front of the public with fewer restrictions than is the case when philanthropic institutions distribute donations.

Crowdfunding platforms also differ from traditional philanthropic intermediaries in that their role is often opaque. This opacity includes common claims that these platforms are mere bystanders in the context of “person-to-person” crowdfunding, claims that I have critiqued here. Beyond that, these platforms are frequently privately held and for-profit companies, funded by user tips. As such, they may have aims that are in conflict with or obscured from their users. While GoFundMe, for example, has a non-profit .org version of its website, its much larger, for-profit .com website is owned by a private equity firm. Moreover, this company has typically drawn on marketing and tech executives for its leadership. Policies such as the decision to ban campaigns for the legal defense of people accused of violent crimes are likely driven less by a philanthropic mission and more by brand management given that many of these campaigns aimed to help people accused of racially-motivated violence. The same applies to GiveSendGo’s relatively permissive approach to campaign restrictions; it seeks to brand itself as a “freedom fundraising” platform in order to gain market share from GoFundMe.

These details are specific to certain crowdfunding platforms and not the practice of donation-based crowdfunding as a whole. But the sector is dominated – in North America and elsewhere – by for-profit companies with a set of interests that are often unclear to everyday users and not necessarily aligned with philanthropic norms and aims. Therefore, it is essential to highlight the particular role of crowdfunding platforms as intermediaries and challenge descriptions of crowdfunding as an unmediated, person-to-person, and democratic giving practice. Doing so can make crowdfunding platforms’ roles as intermediaries clearer and, potentially, motivate new public policies to shape this practice.

-Jeremy Snyder

Jeremy Snyder is a Professor in the Faculty of Health Sciences at Simon Fraser University in British Columbia. He writes about ethical issues in the provision of health care and is the author, most recently, of Appealing to the Crowd: The Ethical, Political, and Practical Dimensions of Donation-Based Crowdfunding (Oxford University Press, 2023).