CrowdfundingOct 18, 2019
Don't expect crowdfunding to support you in times of financial crisis.
Israel Folau made worldwide headlines with his recent GoFundMe campaign to help support his legal fight against Rugby Australia. While his initial appeal was dropped by GoFundMe, who cited a violation of its terms of service, it was when the Australian Christian Lobby opened a support campaign for Folau that the fun really started. Receiving donations ‘at a rate of almost $1,000 per minute’ it passed the $1 million mark in its first 24 hours, sparking political and social debate and outrage.
Crowdfunding has been around for some time, with thousands of fundraising campaigns launched daily. Initially seen as a stream to raise money for inventions and ideas, it has provided the original finance for all sorts of things from multi-billion dollar business ideas to medical devices to bee hives!
2018 even saw cult-favourite movie Super Troopers resuscitated by fans who responded to a crowdfunding campaign started by director and actor, Jay Chandrasekhar. This highly successful crusade provided much needed cash - $4.6 million (USD) donated by 54,000 people - to produce the sequel, Super Troopers 2, which hit the box office 17 years after the original was released.
With equity crowdfunding legalised in April 2012, it has developed to encompass many social and political issues during the past few years.
But, interestingly, the furore that surrounds Folau’s and the ACL’s funding bid has triggered questions regarding a review of crowdfunding monitoring and legislation. Having become an increasingly commonplace and lucrative way to quickly raise money for a wide variety of reasons, social media and legal experts are suggesting that it’s time for better ethical guidance and rules to come into play.
The necessity for this can also be seen in the current arguments surrounding Australian neurosurgeon Charlie Teo and the upsurge of crowdfunding campaigns to pay for life-saving surgery.
It’s hard to scroll through social media with coming across people looking for financial support to deal with the financial and emotional results of tragic life events.
In times of financial crisis, should we rely on other sources to bail us out?
Recently, private health insurance companies have seen an ‘exodus’ of policy holders, particularly younger Australians. Concerned about lack of coverage, the recent changes for inactive Super funds to remove Life and TPD Insurance, haven’t helped build confidence amongst consumers.
New research from Integrity Life Insurance indicates that ‘the failure of people to take out adequate life, income protection and TPD insurance is driving a boom in online crowdfunding websites’. And us Aussies aren’t heartless people. In a recent nationwide survey of 1000 people.