Have you ever donated to a GoFundMe, Kickstarter or another online fundraising campaign? The crowdfunding sites allow people to donate funds to help a cause or help an inventor get a project off the ground.
The problem with crowdfunding, the thing that’s convinced me and thousands of others to stay away, is once you’ve contributed because of yet another hard luck story, or a new idea that could change the world, you’ll never know how your money is spent.
Focusing on Kickstarter, often the people who donate are the first ones who get to use or view the project. However, from a router that claimed to keep your online activity private to a tin-foil hat that claimed to protect your head from radiation, some projects turn out to be scams.
One famous tech entrepreneur has had enough
Steve "Woz" Wozniak, the co-founder of Apple, agrees with me. He doesn't trust crowdfunding because you cannot check on your investment.
In a recent interview, he said, "You never get to see their accounting. You never get to see how they used your money. It’s not like a real open company."
Woz can't remember all the projects he has supported on Kickstarter, but he was disappointed in a lot of the finished products. Some inventions he has funded have not worked as well as something he already owns or hasn't worked at all.
He has a great point. Once you've funded a great project that is supposed to change the world, you have no idea how your money will be spent.
Like you, I work hard for my money
I like to help others. I like to get involved. Often, I will. But no longer will I contribute using Kickstarter, GoFundMe, or the others. No matter how much you give, you’ll never know how they actually spent your money.
There are no laws to require audits. No rules to keep them from simply blowing your contribution on themselves.
Crowdfunding is generally for suckers.
Now, I carefully select only legitimate, well-run, charitable organizations and scholarships. So should you.