When the governor of Connecticut ordered all restaurants in the state to close on March 16, Colt Taylor quickly applied for a disaster loan from the Small Business Administration and called an emergency meeting to tell the 31 employees at his two restaurants that he could no longer pay them.
Before all that, Mr. Taylor had gone online and set up a GoFundMe campaign to raise money for his unemployed staff.
GoFundMe, which allows anyone 13 or older to raise money for almost any cause, has become a go-to for emergency fund-raising, especially in the wake of disaster. As the new coronavirus has created unforeseen expenses for most Americans and shut down the U.S. economy, the platform is facing the greatest demand it has seen since its founding in 2010.
Between March 20 and March 24, the number of coronavirus-related campaigns on GoFundMe shot up by 60 percent, from 22,000 to 35,000. The stories told on those fund-raising pages convey the breadth of destruction that the new coronavirus has wreaked — grieving families facing costs for funerals that few will be able to attend, food pantries stretched thin, and unemployed artists, bartenders, substitute teachers and manicurists simply trying to survive.
GoFundMe can only do so much for its fund-raisers; campaigns require promotion on the organizers’ part. In the case of Mr. Taylor, eight days after he started his campaign, he had raised just $295 of the $20,000 goal he set to support his workers at Los Charros Cantina and the Essex in Essex, Conn.
“It is a hard road with GoFundMe,” said Mr. Taylor, 36. “It is up to the organizer to market it and get it out there. The struggle I have is that I’m so understaffed and going through all of my own difficulties, I don’t really have time to do that.”
Millions of Americans are now under similar strain, and applications for unemployment benefits have surged across the country. While those in need await government aid, including the stimulus checks that will begin to cover their expenses, they are turning to the internet for help. The question is: Can it help them?
America’s Safety Net
The new coronavirus presents an extreme case of the country turning to GoFundMe as a financial safety net. The platform lets users set up a campaign through just a few clicks — a sharp contrast with the bureaucracy involved in applying for most grants and loans.
GoFundMe, a for-profit company that makes money by charging a processing fee for each donation, and through “tips” to the company, is scrambling to help channel both the demand for money and the people looking for help. As of Tuesday, the company said, donors had contributed $60 million to coronavirus-related campaigns.
On Tuesday, the company announced a partnership with Yelp that would allow struggling restaurants to post their GoFundMe campaigns on their Yelp sites. The two companies are also offering to match the first $500 that small businesses raise. Additionally, GoFundMe is running its own megafund for small businesses and another for individuals and nonprofits.
In the wake of disasters like hurricanes and wildfires, most of the appeals on GoFundMe have come from families or individuals looking for help.
This time around, the vast majority of people who have come forward are business owners who had to shut down their establishments because of the density-control measures in place across the country.
“What we’re seeing is an interesting broadening of what GoFundMe is normally used for,” said Nora Kenworthy, an associate professor at the University of Washington Bothell School of Nursing and Health Studies.
As of Tuesday, there were over 14,000 verified campaigns from small businesses. Among those that had been posted for at least five days, about a third had raised half of the amount they set as their goal, according to an analysis by The New York Times.
In times of relative calm, 27 percent of all GoFundMe campaigns end up hitting their goal, according to research released earlier this year from a team at the University of Rochester.
But the current crisis is likely to pose even more difficulties than usual because of the sheer amount of need, and the fact that most people who may be donors are also living through an economic crisis.
“Previous natural disasters happened somewhere, and people somewhere else gave to them,” said Tim Cadogan, who took over as the chief executive of GoFundMe earlier in March. “This is a natural disaster that is affecting everyone.”
Running a Successful Campaign
The sheer number of campaigns that have already popped up means it is very easy to get lost in the logjam of other people seeking help.
Organizers looking for visibility have begun to aggregate GoFundMes into Google documents and Twitter lists based on subcategory and geography. One Google Doc contains a list of more than 540 GoFundMe pages for Chicago businesses. Other documents focus on artists, and contractors in the technology sector.
As GoFundMe pages proliferate, however, some campaigns have an advantage.
One GoFundMe page created on Tuesday by Flexport, a logistics start-up, has already raised more than $3.3 million to distribute supplies to medical professionals. Its success can be trace at least in part to public support from celebrities including Edward Norton, Pharrell Williams and Kim Kardashian West, who have shared the GoFundMe link with their tens of millions of followers.
Yashar Ali, a journalist, has previously started several large GoFundMe campaigns, raising more than $2.1 million last year to rebuild a group of historically black churches. On March 19 he started a campaign to help hourly workers affected by the pandemic. He teamed up with two nonprofits, Robin Hood in New York City and Tipping Point in San Francisco, to help allocate the funds.
Public figures including Elizabeth Banks, Busy Phillips, Whitney Cummings, Ellen DeGeneres and Jenna Fischer promoted the GoFundMe link. The superstar investor Chris Sacca and his wife agreed to do a $100,000 match in donations. So far, the campaign has raised $430,613 of its $1 million goal.
But Mr. Ali said that even that success was less than he had expected. “If this were any other time, I would have had maybe $4 million right now,” he said.
He said that now, the need is dispersed so broadly that it’s hard for any single campaign to take off. “This isn’t like, we need to rebuild houses in Houston after the hurricane, or some people lost their livelihood in a devastating fire,” Mr. Ali said. “This is, ‘Joe down the street needs 100 bucks to buy groceries today.’”
A lot of the differentiation is in the marketing: emotional appeals, headlines and external promotion.
“Virality is important,” said Matt Klein, the director of strategy at Sparks & Honey, a trends and insights consultancy. “Fund-raisers are simultaneously tasked with becoming emotional storytellers, self-promoters and social media marketing gurus to ensure their campaign gains traction.”
Monia Trezza, 45, who owns three Italian restaurants and wine bars in Brooklyn with her husband, both of whom are from Italy, has been hit doubly hard by the virus. “All of our suppliers, businesses, family, friends, they are affected by this,” she said. “First in Italy and now in New York.”
After being forced to close their restaurants last week, she started a GoFundMe campaign on March 22 to help support her businesses and the staff they employ, all of whom, she said, are Italian citizens and do not qualify for unemployment benefits.
Gaining traction has been hard. Ms. Trezza said she can hardly sleep at night, and when she wakes up her mind is racing. She and her husband have emailed their GoFundMe link to all of their contacts and posted it to the restaurants’ social media accounts.
But “we are not influencers,” she said. “If an influencer starts a GoFundMe, they have a lot of followers so they automatically get sharing. If you’re a little business like us, it’s not like that.”
Four days in, Ms. Trezza had raised $2,700 of her $25,000 goal.
‘We Can’t Validate Everything’
The inequality of outcomes in GoFundMe has long been a feature of the site, with the most web-savvy, socially connected organizers taking home the biggest hauls.
Two researchers at the Oxford Internet Institute wrote a paper, currently under review, that suggests that campaigns in wealthier areas of the United States, with better pre-existing social nets, tend to be more successful than those in poorer areas, where the need is greater to begin with.
“Campaigns are least likely to reach their goals when they most need it,” said Sumin Lee, the lead author of the paper. “It could be a good opportunity, but we have to be mindful that the success in crowdfunding at a time like this is likely to be unevenly distributed.”
For GoFundMe, though, the most immediate challenge, along with helping people sort through campaigns, is ensuring that donations are going to people in need, rather than to those trying to take advantage of a bad situation.
The company estimates that less than 0.1 percent of all campaigns are fraudulent, but the company says it does not have the resources to check up on whether the restaurant owners raising money actually pass it along to their employees.
“In terms of what they do with the funds, there are some limits to our ability to validate that,” Mr. Cadogan said. “There is an element of trust in this — we can’t validate everything.”
Kelly Angard, 55, an artist in Denver who started a GoFundMe to ship surgical masks to hospitals in need, said she takes careful steps to make sure she is transparent with donors about where their money is going. She sends FedEx tracking numbers for the mask shipments to the hospitals, and publicly posts her mask purchase orders in the update section of her GoFundMe page.
“Every dime will be accounted for, and that is key,” Ms. Angard said.
What the site could be more prepared to help with is the promotion of faltering campaigns. In Connecticut, even if Mr. Taylor eventually meets his goal, he will only have managed to cover his employees’ wages for a week. Keeping his two restaurants alive, so they can hire back the bartenders and cooks in the future, will require a lot more money.
“The amount of money I need is not something a GoFundMe can handle,” he said. His real anger is reserved for government officials.
“The government has not been helping us, so we are left with the devices we have at hand,” he said.
Aaron Krolik contributed reporting.
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