When Matthew Foutz helped co-found the Human Tribe Project, a crowdfunding website that helps people raise money for medical or other crises, he never thought he'd end up using it for his own family.
But two years ago, when his daughter Mia was 5, she was diagnosed with a brain tumor. She had surgery, then months of chemotherapy and radiation treatment, which left Mia, now 7, with permanent memory, mobility and endocrine problems.
"They cured the cancer, but at a heavy cost," says Foutz, 40, of Phoenix. "She's going to need tons of rehab, and insurance only goes so far. In this day and age, there's no recourse for families that are going through this, because insurance companies raise your rates, and there's nothing you can do about it."
Nothing, that is, except try fundraising. More and more people are turning to crowdfunding sites, including the Human Tribe Project (humantribeproject.com), FundRazr (fundrazr.com), GoFundMe (gofundme.com), GiveForward (giveforward.com) and others, to ask friends and friends of friends to consider making a donation or, in the case of Human Tribe Project, buying a necklace or key chain, and the item's cost includes a donation.
These can be used to raise money for a loved one's cancer treatment, care after an accident, fertility treatments or even replacing a pair of eyeglasses held together with duct tape.
Through crowdfunding, Foutz has raised $11,520 for Mia over two years.
GiveForward, which notes that medical costs are the No. 1 reason for bankruptcy in the USA, estimates that more than $2.8 billion was raised by all types of crowdfunding websites in 2012.
GoFundMe reports that last year alone, its users received more than $30 million in online donations, and the "medical, illness and healing" category accounted for 17% of all campaigns, the largest category.
FundRazr says it is on track to raise $20 million since its inception in July 2010, and illness, medical and health-related causes represented 58% of money raised. Memorials/tributes represent an additional 12%.
Human Tribe Project says it has gifted more than $175,000 since it began in July 2009; its goal is to raise money for medical causes only.
Crowdfunding is "doing what has always been done, but taking the technology we have to make it viral," says Catherine Chapman, a philanthropic consultant with Fullanthropy, a Louisville consulting firm that advises non-profits. "People give on these sites often because they have been asked to do so by a friend or a friend of a friend."
Typically, people can use a crowdfunding site to tell why they need money, using blogs and updates to keep potential donors informed.
Scams appear to be rare. "GoFundMe relies on its community of users and visitors to report any suspicious or inappropriate fundraising campaigns," says Brad Damphousse, the site's CEO.
"Scammers tend to lack social-media followings, as they don't want to identify themselves," says Daryl Hatton, the founder and CEO of FundRazr. "Those with integrity have networks. To give you scale, approximately one in 5,000 medical FundRazrs get shut down."
Most sites collect donations and forward them directly to the person in need. Sites can take out a small portion of the donation for administrative and other costs, which can range from 5% to 20%.
What recipients do with the money is their choice, says Jaclyn Foutz, one of Human Tribe Project's co-founders.
Recipients typically have many bills when dealing with medical emergencies.
"Beyond medical bills, money is often raised to assist with family travel, rent, mortgage, utilities and other daily living expenses during the recovery period," Damphousse says.
The sites are not typically non-profits themselves, and donations are not considered tax-deductible unless a non-profit organization itself has set up a crowdfunding request.
"People know whom they are donating to," Hatton says. "But one of the big surprises is that people saw how many complete strangers were donating to them.
"The message has to really resonate with your friends, or else it won't go anywhere," he says. "If you don't get that social proof, then people don't get donations. Our natural skepticism kicks in, and they hold back on hitting that button."
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