A CBC Special with Daryl Hatton: Is Crowdfunding Begging?

Daryl Hatton About Crowdfunding

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A CBC Special with Daryl Hatton: Is Crowdfunding Begging?

Daryl Hatton, Founder & CEO

CEO @FundRazr + @ConnectionPoint, entrepreneur, cardiac survivor, foodie, whisky nut, philosopher, mentor, father, friend, #KingOfGastown

Last week, CBC and Ontario Today did a radio special on crowdfunding. Throughout the hour, Rita Celli discusses with Daryl and listeners, whether or not crowdfunding is the modern form of begging. Sentiment varied among callers, and a many different arguments for and against it were brought up.

The session begins with Daryl bringing up a variety of solid points, firstly that for many different types of campaigns, crowdfunding is the modern form of ‘pass the hat’. What used to happen in churches, businesses, community centers, and malls, can now happen in our communities online to help people when they are in their time of need. It can be a great way for a supportive community to rally around and support people they care about.

Youth need to work to raise money

Some of the callers lacked experience with crowdfunding, but still didn’t like the idea. One caller mentioned that she would not want her daughters to turn to crowdfunding to raise money for a volunteer trip they are planning. She wants her daughters to have to work for their money and earn every penny they get. Later callers agreed with this outlook, but perhaps other types of campaigns such as medical fundraising campaigns, would have generated a different response.

Another caller disagreed with these views, as her daughter had recently funded her own overseas volunteer trip. Her experience was that her daughter learned important lessons in humility, appreciation, and gratitude by seeing the outpouring of support from her community. She was able to have a life changing experience due to people’s support of her and her dreams.

How do I know for sure what they money will be spent on?

In response to uncertainty about where crowdfunded money is actually being spent, and the validity of certain campaigns, the theme emerged and confirmed that in fact ‘the crowd’ gets to decide which campaigns are fraudulent. This has proven to be a very effective way to validate campaigns. If people in your community know you and care about you, and see you raising money for something important, they will help you. Strangers will not contribute to a campaign that could not rally any support from friends and family first. Similarly, if the campaign concept is frivolous or invalid, then friends and family will not find the campaign worthy and will not fund the pursuit.

Why does FundRazr take a cut?

Another caller also brought up the morality of taking a portion of the crowdfunded money as part of FundRazr’s business model. Daryl responded explaining that it takes a lot of talent and effort to run a crowdfunding platform, including employing 17 employees currently. Recent FundRazr testimonials have also claimed that near 25% of their goal was raised from absolute strangers. Daryl’s point was quite clear when you compare the cost of 5% of money raised to an additional 25% raised from being on the platform.

Some people are working to make the world a better place

Refreshingly, a caller near the end reminded listeners that crowdfunding is hard work. If you put up a crowdfunding campaign, money does not just appear out of nowhere. The story needs to be articulated well, with planned outreach, and often with great photos and a video. He also points out that crowdfunding has created a lot of campaigns that have helped to make the world a better place. People are doing a lot of great things across the globe and this can be a way to fund these individuals and make things better.

Although the majority of the negative criticism of crowdfunding throughout the hour was from people with little experience actually using it, they brought up important points about public sentiment about all of these campaigns.  Daryl ended the session by informing listeners that he got a humbling letter in the early days of FundRazr. A family wrote in to thank Daryl for helping to save their daughter’s life after some quick fundraising and money collection was the only way to help her travel to medical treatment in time. Whether or not people love or hate crowdfunding, it certainly has its place and will continue to fund billions of dollars of pursuits in the coming years.

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