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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.
There are few people in the Bay Area more dialed-in, networked up, Oprah power-listed, and philanthropically connected than Lateefah Simon. Simon, the teen mom and budding activist who, at just 19, became the executive director of a San Francisco nonprofit to help troubled girls like herself. Simon, the 26-year-old MacArthur “genius” who created a pioneering program for the district attorney’s office to keep young drug offenders out of prison. Simon, the civic dynamo who raised $7 million for her first organization, the Center for Young Women’s Development, and $2 million more as head of the Lawyers’ Committee for Civil Rights. When she and her husband, Kevin Weston, recently renewed their vows at City Hall (her ex-boss, state attorney general Kamala Harris, presided), it seemed like half the city’s politicos were in the audience cheering them on.
So it says something about this cultural moment that you can find Simon asking—or begging (we’ll get to semantics in a minute)—for help on GoFundMe. But sure enough, plug her name into the site, and you find a photo of Simon, Weston, and their adorable toddler, Lelah, looking blissful. Their story is anything but.
Until last summer, the 44-year-old Weston was an editor at New America Media, a nonprofit news site where he, too, spent a good chunk of his time raising money for worthy causes. Just as he was about to report to Stanford for a journalism fellowship, he went to the doctor with a sore throat and came out diagnosed with a flesh-eating bacterial infection—and a rare type of leukemia. Doctors gave him days to live, but he held on through intensive chemotherapy. Simon, meanwhile, launched a nationwide drive to register African-American bone marrow donors, hoping to find a transplant match for Weston and others in his situation.
No less catastrophic was the family’s sudden plunge into financial chaos. The MacArthur grant had arrived a decade ago, and Simon had long since funneled most of that $500,000 into various youth groups. Over the years, she and Weston had made a point of helping relatives and friends financially, as well as giving to charity, to the detriment of their own savings—“We’ve never thought of our salaries as our own,” she says. Despite her earnings and health insurance as a program director at the Rosenberg Foundation, a social justice nonprofit, she and Weston were soon swamped by hospital copays and the day-to-day costs of tending to a family in crisis. She had climbed out of poverty to become one of the philanthropic world’s rising stars, but suddenly she needed to do what she had never done before in her life—pass the hat for herself.
“There’s something very personal about struggling with money,” Simon admits. “We both learned from our single moms how to white-knuckle our way through the month. I’ve never asked anyone for money. It’s crazy humbling.”
In the end, the couple agreed to swallow their pride and let a fellow activist create the “Help Kevin Weston” campaign on GoFundMe, one of 500 or so crowdfunding sites that have transformed hitting up your email contacts and Facebook friends—and their friends, and theirs, ad infinitum—from a decidedly alt concept (fans fronting money for fledgling bands) into an estimated $2.8 billion industry. A Kickstarter-backed short documentary—Inocente, about a 15-year-old homeless artist—won an Oscar this year, and now even savvy entrepreneurs with access to “real” investors and decent lines of credit are crowdfunding as much to generate buzz as to raise cash. Meanwhile, the SEC is debating rules to let amateur investors take equity stakes in crowdfunded ventures. Soon, an industry born of creativity and altruism could be awash in Wall Street–style speculation.
What’s really turned us into Crowdfunding Nation, though, and what makes the Simon-Westons’ story so emblematic, is the once unheard of, now nearly commonplace practice of e-begging—not for our ideas, but for our dreams, and for ourselves. Serious causes, frivolous causes: They all compete like so many Darwinian finches in a fast-evolving ecosystem. Tunnel through an online warren of campaigns on sites like FundRazr and Indiegogo, and you’ll find a plea for victims of the Sandy Hook Elementary shootings alongside one to reimburse a guy named Koven who got stuck with a $600 karaoke bill. People trying to finance a search party for a missing teen vie with the owner of an arthritic spaniel named Rosy who needs hip surgery. For every Lateefah fighting to keep her husband alive, there’s a Matthew, yearning to excise the rolls of flesh around his gut after losing 300 pounds. Barack Obama, with a reported $690 million raised online in 2012, crowdfunded his way to the presidency; now he’s crowdfunding for background checks on gun owners.
This is what grassroots entrepreneurship looks like in the age of social media—more often than not, our venture is Me & Company, and our customers are you and everyone you know. Then there’s the silent majority: those of us deciding whether to dig into our pockets for a few spare dollars or to click on by. We have a new power: to collectively float or sink our friends’ plans, from their food-cart fantasy to their ability to pay their rent while undergoing chemo. We have big hearts and like big ideas, and we want to help, but—admit it—we are also constantly negotiating our place in the social pecking order. Knowing that our donations can be announced for all our networks to see (and that we’ll probably run into the asker at work, at the gym, on LinkedIn) gives rise to new calculations: When we give, are we exercising selflessness or self-promotion? Are we enabling or supporting? Is this generosity or an expunging of guilt? As more and more people take up the crowdfund megaphone, those being solicited (which is to say, all of us) are being pushed up against the wall to do the right thing again and again and again. And this is becoming the most pressing moral quandary of them all—because no matter how many other palms are outstretched, do you really want to be the miser who didn’t help Lateefah and Kevin in their hour of most desperate need?
The onslaught of crowdfunding is all the more socially loaded in light of this country’s fractured relationship with giving. The Constitution says that we the people shall “promote the general welfare.” More than 200 years later, we the people are constantly bickering over what “the general welfare” means and who should pay for it. We are among the nations with the most money to give. We’re also broke, unemployed, and underwater, and, with the recession, we’re less ashamed to admit it. We esteem philanthropy and support charities with dollars and tax breaks. Yet we frown on handouts and shame the freeloaders who take them.
It was into this churning pool of contradictions that Michele Turner launched her plea for help. Separated from her husband and raising two young daughters in Bernal Heights, the 47-year-old freelance copywriter was finishing up a children’s book when she was diagnosed with breast cancer last September. The chemo soon made it impossible for her to earn a regular living. Insurance covered most of the medical costs, and disability checks helped with the groceries, but not her rent or the gas to get her to treatments at Stanford. To all outward appearances, she was a fashionable career woman who ran with a hip, solidly middle-class crowd. Who would believe that she was broke?
Members of the Mrs. Robinson Society—a women’s club that Turner cofounded—discussed hosting a benefit in a bar, as they had done for other causes. But that seemed too much like a party. Eventually, Turner’s friend and frequent collaborator Laura Stepping convinced her to give GoFundMe a try. Turner went to work crafting a version of the marketing copy she excels at, as if she were one of her clients and her neediness was something that she had to sell. “I wrote something 30 times and just couldn’t do it—how do you say this?” she laments. “It was hard to let the world know you’re in that position—in dire straits. I had to put ‘desperate’ up there. I couldn’t make it pretty or hide anything.”
It’s a really tricky thing, walking the fine line between sympathetic and just plain pathetic. Faced with legions of first-timers, crowdfunding websites offer loads of advice on how to make an effective ask. Offer a story, they urge, not just a plea for money. “It’s not a donation, it’s funding,” says Danae Ringelmann, a San Francisco native and cofounder of Indiegogo, which claims to be the world’s largest crowdfunding platform. “When you ask for money, the only emotion you’re tapping into is guilt. That’s far less powerful than the motivation of acting on your passions.” In Turner’s case, this has meant selling benefactors on the experience of being part of her recovery, not just on alleviating her poverty.
Most sites require you to post a photo, but they advise that campaigns with videos raise more money more quickly. Another key pointer: Ask for a realistic amount—broken down into specific costs to give donors the feeling that they can make a tangible difference. In Turner’s case, $25 might buy a few bags of cancer-fighting kale, $90 a therapy session for her kids. You’re urged to relentlessly promote your campaign on social media—not just blasting out the same pitch, but posting updates and thank-yous to donors, keeping them abreast of every morsel of good news. All this can be exhausting for someone fighting a serious illness, not to mention demoralizing, so many people deputize a family member or friend to do the work instead.
Turner ended up going for a soft (albeit still heartbreaking) sell, excerpting an entry from her seven-year-old’s journal: “My Mom has brest canser. I want to go and burn this letter.” Turner then penned her own elegantly restrained plea—“enter: breast cancer. a course of treatment. a loss of income and ability to make ends meet. a need for help”—posted under a nom de plume, Penny Walk, and let Stepping put it on Facebook.
Jon Gasparini, the owner of the TenderNob bar Rye, where the Mrs. Robinson Society had hosted fundraisers in the past, was relieved to see the Facebook post. He had heard about Turner’s diagnosis but hadn’t known what to do. “It’s mildly anxiety-inducing to talk about money and health,” he says, “so having this kind of site to roll it into a social network is a helpful platform.” Gasparini chipped in $1,000 on his iPhone—he thought that he was doing so anonymously, but the website notifies the campaign organizer even if a donor chooses to keep his name and/or contribution invisible on the site. “Not everyone can give that much,” Gasparini says, a tad embarrassed to have been outed. “I didn’t want to be a big shot about donating that amount, and I didn’t want her to feel bad about it.”
Donors came from even more unexpected places. Michelle Ruggels is a city health administrator who graduated with Turner from Palo Alto High School in 1983. They hadn’t seen each other in a decade, but Ruggels donated $300—also without inscribing her name all over the site: “I have enough ego that I wanted Michele to see that I’d donated,” she says, “but not enough ego that I needed everyone to see it.”
Turner’s initial goal was $10,000. Five months later, she’s at $11,747 and has raised her ask to $14,000. With so many people invested in her recovery, she can’t shake the feeling that she’s on the hook to heal—added motivation at a time when she needs every ounce she can muster. The response, too, has eased her squeamishness about having to ask for help in the first place. “I think that because it’s an online forum, and there’s levity to it and a happy brand—it once removes the fact that it’s money,” she says. “It makes an uncomfortable thing comfortable. It’s socially couth on both ends.”
Stepping, on the other hand, has been more surprised by the number of people in their social circle who haven’t ponied up even small amounts: “It’s like, ‘C’mon, let’s see your names.’” While an online campaign makes donating less awkward, it also makes requests for help less awkward to ignore, as if they were a form of spam.
Finding people who have passively neglected or outright rejected a crowdfunding plea from a friend isn’t difficult. These days, it’s a nearly universal experience—we’ve all done it. Take Polina Smith, a 27-year-old personal trainer and parttime clown who runs in the city’s artistic, circusy circles, where creative ambition is in abundance and cash is not. She often forks over $25 or $50 to friends’ projects, yet she is still haunted by the one to which she didn’t donate—The Grimaldis, a ghost story with circus arts and cabaret. A friend personally emailed her a link to the Kickstarter campaign to fund a short run of the show in San Francisco, but Smith missed the deadline to donate. The next time that she saw her friend practicing at the Circus Center, she felt like she was being judged. “She seemed more distant, but I don’t know if it was my own projections,” Smith says. The guilt has lingered: “It’s been a year, and every time I see her, it’s like I have to give her something.”
Indiegogo’s Ringelmann is the first to say that donors are not saints—they often get something out of giving. “People fund for four reasons: They’re passionate about the idea; they want to participate in something bigger than themselves; they want the perks; or they want recognition for being someone who discovered something early. These are selfish things, but they’re also empowering things. We wake up in the morning, and we want to be good people.”
Still, mixing friends with money is invariably a loaded proposition. You can’t help judging their priorities, their values, their budgeting skills. What if you’re short on cash yourself? Do you owe someone a note explaining why you didn’t give, or should you opt for the plausible excuse that you never saw the campaign? What if you’ve given someone plenty of money already—say, your kid’s piano teacher, who now wants you to fund a solo concert along with the pricey lessons? If someone donates to you, are you obligated to return the favor, no matter what? An acquaintance recently emailed Michele Turner with a Kickstarter plea for a business idea. “It’s someone who’s really successful and just wanted to add on something else to their success,” she says. “It was this really aggressive campaign. In light of where I am, it seemed really excessive to me.”
It’s easy to resent that kind of peer pressure when the person asking is better off than your are. More complicated is the entreaty that carries a social reward (and you know it). Crowdfunding has wrested the term “benefactor” away from society ladies waving leather checkbooks on the charity circuit. Now all of us can get a little recognition for helping out. I was recently Facebook chatting with a friend I’ll call Niki, a wine importer who is one of the least calculating people I know. She said that she once donated a small amount to the Kickstarter campaign to open Doughnut Dolly in Oakland—but not because she loves fried carbs. She wanted to support the owner, but she also wanted to signal to her Facebook friends, many of whom are business colleagues who also donated, that she is as generous as they are: “That, of course, influenced my decision.” Scanning the amounts given by others in your social circle and income bracket—and measuring yourself accordingly—has become as normal as checking out your competition at a singles bar.
Then there’s the type of crowdsourcing site that doesn’t ask for money—which, if you have it to give, is gratifyingly hassle-free—but for more labor-intensive favors. Friends of both Michele Turner and Lateefah Simon started a registry on Lotsa Helping Hands, where people can volunteer to drive Turner to the hospital or be part of Simon’s casserole train. “We’re asking folks to be a village to support us,” Simon says. Factoring in the leftovers, “bringing a meal literally saves me four hours, so I can sit down and rest.”
But what if no one responds? One new father in the East Bay, who asked for anonymity, reluctantly went along with his wife’s friend’s idea to put up a registry on MealBaby, which organizes meal deliveries to sleep-deprived parents. Yet after the site emailed six local couples whom he considered friends, not one of them signed up. He veered between feeling ridiculous for having asked in the first place and checking the site obsessively. “It’s funny and baffling at the same time,” he says. “The food is a bonus, but don’t you want to meet my daughter? Apparently not.” A few weeks later, he tells me that all the couples eventually did come through—it seems that they simply didn’t like using the site. Phew.
When I tell my friends this story, some of them side with the procrastinators, as if the new dad’s hope for something more than money crossed some invisible line. It makes me wonder whether, for a lot of donors, crowdfunding’s appeal isn’t its community-mindedness so much as its impersonality. You can help a long-lost friend or passing acquaintance without having to hold her in your arms and feel her pain wash over you. She can accept your money without having to answer prying questions or worry about how her situation makes you feel. No one has to make small talk. Which is a relief, because often the timing is terrible—and if you’re both honest with yourselves, you may not particularly want to reconnect anyway.
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.”
THE CONUNDRUM, REVISITED
Lateefah Simon falls somewhere between the two extremes of crowdfundees—comfortable promoting a noble cause that will benefit other families, but ambivalent and tight-lipped about the one to aid her own. Simon has plugged the bone-marrow registry on KQED and KALW and her Facebook page. At her vow-renewal ceremony at City Hall, there were signs with the slogan “Will you marrow me?” as well as several folding tables where attendees could swab inside their cheek for DNA (that’s how easy it is these days to get on the registry for a future match). With 28 donor drives in the past months, the campaign has registered more than 1,100 donors (the target was 1,000). Yet Simon didn’t mention her GoFundMe campaign in any of those forums. “I’m a little shy about it,” she admits. “When you start saying ‘and help us individually,’ it might dilute the more important message of potentially saving hundreds of lives.”
Instead, friends have been pushing Simon’s fundraising efforts, which, as of press time, have brought in $4,000 in checks, $12,000 via PayPal, and just over $7,000 on GoFundMe. (Simon says that many people have been turned off by the 5 percent charged by the site, a standard cut in the crowdfunding universe.) By late March, Simon and Weston’s savings had hit zero, and it was time to start using the crowdfunded cash. Despite all their efforts, Weston hadn’t found a perfect marrow match, but his half-brother is a half-match—much better than nothing. The couple was bracing for $90,000 in medical and living costs by the end of the year, including a move to Seattle for a transplant at the pioneering Fred Hutchinson Cancer Research Center and an estimated $40,000 copay.
So Simon’s friends decided to intensify fundraising efforts the old-fashioned way: a brainstorming dinner of highly networked acquaintances, including San Francisco supervisor Jane Kim, at the Oakland home of California Bar Foundation executive director Sonia Gonzales. “We’re professionals, and a lot of us grew up poor, and we’re middle-class now,” Simon says. “But being pretty young, we don’t think that we need a big fat nest egg.” She updated the guests on her husband’s progress and asked for their help paying the bills.
“To really look your friends in the face and say, ‘I need your networks, and love, and compassion, and we need your money’—it’s harder face-to-face than online,” Simon says. It’s also harder to say no. By the end of the dinner, the group had pledged to raise $25,000—or $2,000 more than all their previous efforts combined. Some discussed holding a cocktail benefit, and others planned to hit the phones. If there’s one thing Simon has learned, it’s this: A funding site may be a useful tool to collect money, but nothing beats the efforts and support of an actual crowd.
Originally published in the May 2013 issue of San Francisco.