7 GoFundMe Campaign Tips to Avoid This Couple’s $400K Mistake

Here are some do's and don'ts for crowdsourcing funds.
  • Kate McClure and Mark D’Amico are accused of stealing a portion of the $400,000 that they raised for a homeless man who gave McClure his last $20 when she was in need.
  • The defense claims the homeless man, John Bobbitt, received $200,000 of the money raised, but the rest is allegedly still missing.
  • Crowdfunding can be a good way to raise money for a cause, but it can lead to tax and legal issues.

There’s a massive financial dispute going on over a GoFundMe campaign.

Kate McClure and Mark D’Amico are accused of making off with a portion of $400,000 after it was raised on crowdfunding site GoFundMe. The accuser is John Bobbitt, a homeless Philadelphia veteran whose initial act of kindness has now led to this national news story.

When McClure was stranded with an empty gas tank on a highway, Bobbitt came to her aid and gave up his last $20. McClure and D’Amico were so touched by his kindness that they organized a GoFundMe page and raised approximately $400,000, which would be used to buy Bobbitt a home and set up two trusts for him.

Click to read more about crowdfunding scams and failures.

Bobbitt claims he only received $75,000 in cash, goods and services, and is accusing the couple of spending the donations on lavish trips and shopping, according to WPVI-TV in Philadelphia. The defense maintains that Bobbitt received $200,000 of the funds raised, and sources report that the rest of the cash earmarked for Bobbitt is allegedly gone.

Read: The Do’s and Don’ts of Crowdfunding the Down Payment on Your Home

Organizing a crowdfunded campaign can begin with the best of intentions but can lead to tax and legal implications. Here are some ways to protect yourself and maximize donations for your cause.

How to Organize a Successful Crowdfunding Campaign:

  1. Understand the tax liabilities and seek guidance from an accountant: Funds raised that exceed $20,000 and include more than 200 transactions via crowdfunding sites are considered taxable income, not a gift, in the eyes of the IRS and must be reported.
  2. Begin with a realistic fundraising goal: It’s great to shoot for the stars, but when you start small, you can always increase your goal. 
  3. Hook in potential donors with the title: Keep your title short and sweet, and include the beneficiary’s name in the title to make it easily searchable. 
  4. Share your story: Use pictures, videos and heartfelt words to compellingly communicate your story. Also, provide a detailed cost breakdown to communicate to donors how the funds will be appropriated.
  5. Leverage social media to spread the message: Create an online community for people to rally around your cause.
  6. Share inspiring updates: Once the campaign builds momentum, use the webpage to reflect milestones and achievements earned along the way. 
  7. Thank your donors: Achieving the fundraising goal isn’t the end of the story. Donors are invested in the story and likely want to hear an epilogue. In addition to thanking them, include photos, videos or written updates. 

Related: 10 Businesses That Got Their Start From Crowdfunding on Kickstarter

Crowdfunding has transformed traditional fundraising methods and allows causes and ideas to be digitally spread to potential donors around the world. Here are some of the most successful crowdfunded campaigns:    

Most Successful Business Crowdfunded Campaigns

  • Pebble Time Smartwatch smartwatch pioneer  
    Goal: $500,000
    Raised: $20,338,986 in 32 days on Kickstarter
  • Flow Hive — bee-friendly beehive
    Goal: $70,000
    Raised: $14,927,624 (in two campaigns) in 56 days on Indiegogo, Indiegogo InDemand
  • Coolest Cooler — multipurpose outdoor cooler
    Goal: $50,000
    Raised: $13,285,226 in 53 days on Kickstarter
  • Kingdom Death: Monster 1.5 — intricate board game
    Goal: $100,000
    Raised: $12,393,139 in 45 days on Kickstarter
  • BauBax Travel Jacket — versatile and functional travel jacket
    Goal: $20,000
    Raised: $11,609,614 (in two campaigns) in 59 days on Kickstarter, Indiegogo InDemand
  • Exploding Kittens — card game
    Goal: $10,000
    Raised: $8,782,571 in 31 days on Kickstarter
  • Ouya — video game console
    Goal: $950,000
    Raised: $8,596,474 in 30 days on Kickstarter
  • Supplement for The 7th Continent — board game expansion pack
    Goal: $40,000
    Raised: $7,072,757 in 24 days on Kickstarter

Check Out: 21 Celebrities Who Run Foundations or Charities

Most Successful Personal Crowdfunded Campaigns 

  • Time’s Up Legal Defense Fund
    Goal: $22.5 million
    Raised: $22,032,300 in eight months on GoFundMe
  • Las Vegas Victims’ Fund
    Goal: $15 million
    Raised: $11,874,100 in 11 months on GoFundMe
  • Support Victims of Pulse Shooting
    Goal: $10 million
    Raised: $7,854,290 in 27 months on GoFundMe
  • Funds for Humboldt Broncos  fund for victims of a bus crash in Canada
    Raised: $15,172,200 on GoFundMe
  • Stoneman Douglas Victims’ Fund
    Goal: $10 million
    Raised: $10,093,600 in six months on GoFundMe

Click through to read more about celebrities who donate millions to charity.

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Note: The most successful crowdfunded campaigns as of April 2018 only include ones from GoFundMe, Kickstarter, Indiegogo and Indiegogo InDemand.