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Lauren Smiley | Photo: Margo Moritz | April 22, 2013
When everyone you know is passing the hat, who gets supported and who gets the shaft? Welcome to the new ethics of crowdfunding.
WINNERS AND LOSERS
Life’s not fair, but crowdfunding might be a fairer system than most—some would even call it a meritocracy. A million average Janes and Joes decide who gets the grease (FundRazr reports that 27 percent of its successful campaign organizers have never met the people who donated). Musicians and filmmakers can circumvent the entertainment establishment by going straight to fans. People excluded from old boys’ networks can compete for money on a more or less level playing field. Indiegogo’s Ringelmann says that only 7 percent of companies started with venture capital are headed by women, compared with 47 percent of projects that meet their funding goal on the site. Similarly, women make up 65 percent or more of the campaign organizers and donors on FundRazr.
Meritocracy has a flip side, though, and it can be brutal. Spurned innovators can at least save time and money by learning early that their idea has no support. But what about medical fundraisers, when the crowd seems to be voting for or against your very life? What starts as a request for help turns into a financial version of Gladiator, with the crowd giving you a collective thumbs-up or thumbs-down.
Perusing the San Francisco–based GoFundMe ads, I stumble across Scott Hankes’ plea for “lifesaving stem cell therapy” for pulmonary hypertension. The thermometer below the picture of Hankes and his Chihuahua, Mister Squinch, which is intended to show the dollars adding up, stagnates at just 6 percent of his goal after seven months. Part of the problem is Hankes’ tone. Instead of a team effort, he seems to be inviting a pity party: “I am not ready to die....I don’t like having to beg, but I am because I don’t want to die (who does), but especially if the last of my time here is going to be so miserable, stuck in a chair all day because getting up to do anything causes too much pain and stress on my heart.” Also, his ask is high—$35,000 when I first come across the campaign (when I look for it later, it’s gone from the site)—without providing any of the specifics that a diligent donor would expect.
The lackluster response just makes Hankes sound shriller. “I’ve decided to give this page another week,” one update goes, “and if there’s no other donations, I’m gonna shut it down because it’s way too depressing to reach out for help and encounter nothing but silence or indifference…. I know, I know...boo-hoo, we are all going to die one day, blah, blah, so why do I have to feel so alone beforehand?”
Jesus. I call Hankes up at his Tenderloin apartment, and he tells me that he moved to San Francisco from Miami in 2006, after Hurricane Wilma, and was diagnosed soon afterward. He says that the GoFundMe ordeal has been a learning experience regarding how he has let relationships decay over the years. Even his own dad and ex-lover didn’t give. “I didn’t care about the money anymore,” he says. “I started wondering why didn’t they care, why didn’t they respond.”
Hankes’ experience notwithstanding, fundraisers for personal emergencies are often the top earners on crowdfunding sites—a sign of how shredded the social safety net has become. In an era when credit is tight and debt is high, when sick leave and health insurance are inadequate or nonexistent, when you can’t max out your credit cards anymore or get an automatic increase in your home equity line, crowdfunding fills an important societal need. Institutions have gotten in on the act: San Francisco’s public Sunnyside Elementary School raised nearly $40,000 last year to recoup budget cuts and save a teacher’s job. Journalists laid off from shrinking newsrooms fund their freelance work on Spot.Us. Even scientists are bypassing the standard research grant process by going straight to the public: UCSF is raising money on Indiegogo to fund studies, on topics such as yoga’s ability to relieve post-traumatic stress disorder in combat veterans, that don’t warrant all the federal red tape.
There are plenty of truly frivolous campaigns, too, but these invariably go nowhere: the art student studying abroad in France (who’s received $202); the Eastern European author who laments that she’s never been to an English-speaking country and that “this weird situation must be changed” ($0); the singer-songwriter from the Portola district who wants $30,000 for her first semester at NYU (the $160 she’s collected might cover a few textbooks). Says Gasparini, the bar owner who gave generously to Turner but skipped over a Facebook “friend” traveling around the world: “I’m all for your self-improvement, but I don’t necessarily want to fund it.”
Even if these campaigns fail, the fact that people are asking for money for such causes at all strikes me as the true sea change, a notion that’s confirmed by FundRazr’s CEO, Daryl Hatton. “We have an entire generation of newbie customers who have never done anything like this before,” he says. There’s a sort of social redistribution at work—a culture of wired self-promoters who are strapped but still dreaming big (read: beyond their means) and not afraid to go for it. It all seems very American—the essence of capitalism. Yet it’s also deeply discomfiting. When Adam Perez, 24, crowdfunded his $1,000 deposit for Columbia’s journalism program, he was Facebook-flamed by a Latino journalist upset that he was “playing off the stereotype that we leech off people and are free-loading off the system,” Perez recalls. His Mexican immigrant mother, meanwhile, was sad because “she felt like she couldn’t do her job.” The crowd itself was less judgmental: Perez, who asked people to donate just $1 each, raised the money in two days.
Are the kids alright, their moral compasses intact and their entrepreneurial pistons firing, or are they just a bunch of cyber-panhandlers? I call an amiable former coworker of mine, Andrew J. Nilsen, 30, who recently “ate shit and took a loan” to pursue a graduate degree while hustling as a freelance graphic designer in San Francisco. “Why didn’t you crowdfund your tuition?” I ask. Simple—it didn’t occur to him. “This next generation of kids and technology, they want everything instantly. It’s like, ‘Can I make this happen easily with no effort? Awesome, I will!’ I don’t want to be 70 and saying, ‘Please fund my diaper bill! I didn’t make any money when I was in my 30s, so now I can’t retire unless you pay for me to.’” Nilsen sounds more like my conservative dad than like a web-savvy millennial who’s thrown money to Kickstarter campaigns himself. But then he reconsiders. While he’s buried under debt, the crowdfund kids will be free. He’ll stand by his principles; they’ll get what they want. “Maybe,” he says, “they’re the smartest people in the room.”