Crowdfunding is on the rise, but what does that mean for charities?

“I think there’s definitely a place for traditional aid organisations… that understand the humanitarian response needs that are not just there for tomorrow”

Over the past month, all eyes have been on the unfolding Russian invasion of Ukraine and the floods sweeping across Queensland and northern-New South Wales. 

Humanitarian groups, charities and community organisations have sprung into action, encouraging the public to donate to various disaster aid campaigns, designed to support immediate needs and longer term recovery efforts. 

But alongside these more mainstream campaigns, there has been a rise in the number of alternative fundraisers. 

These include a whole swathe of individual GoFundMe campaigns, which range from smaller fundraisers for individuals, to bigger campaigns like the one launched by Hollywood actors Mila Kunis and Ashton Kutcher that has raised over US$20 million (AU$27 million) to support aid efforts in Ukraine. 

People across the globe have also been booking out properties listed for rent on Airbnb to help provide funds to residents who have remained in Ukraine during the invasion by Russian forces.

This isn’t the first time a natural disaster has attracted big donation dollars via a crowdfunding platform. During the black summer bushfires, Celeste Barber’s Facebook fundraiser attracted over $50 million for the NSW Rural Fire Service.  

An immediate and tangible impact 

Cath Hoban, the chief fundraising and marketing officer at CARE Australia, told Pro Bono News that one of the reasons there has been such an uptake of crowdfunding as a way to help people affected by disasters was the immediate and tangible value for donors. 

“There’s an incredible desire for humans to connect to other humans, and I think that’s where the real appeal of crowdfunding comes into the market because it’s person-to-person giving in some instances,” Hoban said.  

“And that’s incredibly powerful and appealing to a lot of donors, particularly where it’s small scale and local, like our floods in Australia.”

But she warned that crowdfunding did require some caution. 

“It’s important for donors to make sure the crowdfunder is vetted properly and that they know where their money is going,” she said. 

While Vanessa Byrne, the head of fundraising for the Australian Red Cross, believes that crowdfunders and charity appeals can and should run simultaneously, she pointed out that when a charity like the Red Cross launches an appeal, a lot of regulation comes with it. 

“We are required to follow guidelines and best practice. We are also transparent and accountable for the funds we receive and how they are distributed,” Byrne told Pro Bono News. 

“With appeals, we provide regular reports and updates so the public can see where the funds have gone.”

Disasters are complicated 

A hurdle that humanitarian charities are often faced with during disasters is scepticism around whether or not donations are reaching affected communities fast enough. 

Read more: Charities regulator finds bushfire charities acted responsibly during disaster

Hoban said that disaster relief was complex, and the best approach wasn’t necessarily giving out every dollar at the one time. 

“I think it’s really amazing to see individuals rise up and respond to a specific and urgent community need like you can with crowdfunding,” she said. 

“But I think there’s definitely a place for traditional aid organisations like CARE that have partners on the ground that understand the humanitarian response needs that are not just there for tomorrow, but have the structures and the infrastructure in place to provide really long-term assistance to rebuild.” 

Byrne added that the Australian Red Cross ran long-term programs that helped build resilience in communities.

“Part of the work undertaken by the Australian Red Cross is about building resilience and helping communities prepare, so that they are ready and know what to do when natural disasters hit,” Byrne said. 

“Recovery takes time and so the Red Cross will respond to the immediate and longer-term needs of the community.”

The project of communicating impact

Hoban said that as crowdfunding becomes more popular, there is a need for the humanitarian sector to innovate and effectively communicate impact with a broader audience. 

“The advantage of some of the crowdfunding platforms is the technology behind it,” she said. 

“It’s great to have a little thermometer that tracks how much money has come in against the goal the owner of the crowdfunder has set, and for a donor, it’s really satisfying to see the number go up when they donate… it’s very immediate.” 

But for charities to do the same would require an incredible amount of work. 

“It’s almost impossible to look at how much organisations in Australia have raised. And that’s not even taking into consideration our international counterparts,” Hoban said.

“Those really big projects take a long time to figure out and calculate. So yes, absolutely, innovation is needed, but it’s very complex.”