The ethics of crowdfunding: should sites just say no to some campaigns?


The crowdfunding landscape has grown enormously. In 2014 alone, projects on Kickstarter raised US$529-million. According to Massolution’s 2015CF-Crowdfunding Industry Report, in 2014 the global crowdfunding scene expanded by 167% to reach US$16.2-billion raised, up from US$6.1-billion in 2013.

But with this growth comes a number of challenges — one of which is how to monitor and exclude crowdfunding campaigns that may be offensive or even illegal. The sites generally list terms and conditions that apply to the campaigns they host. In most cases these are sufficient – but occasionally the rules are not enforced strictly or clearly enough, resulting in controversy.

This issue recently reared its head when GoFundMe banned a funding campaign for Michael T Slager, the white police office who shot and killed Walter Scott, an unarmed black man in South Carolina. The money was aimed at covering Slager’s legal costs, but GoFundMe took the campaign down on grounds of racism. Slager has since been dismissed from his job and charged with murder.

The campaign to raise funds for the officer first surfaced on Twitter and was picked up by the media. At first the general reaction was shock about why anyone would want to raise money for Slager, but then the discussion moved on to the ethics of crowdfunding platforms. Do they have any? Should they have any? Wouldn’t this kill their fundamental ethos — the democratisation of funding?

In a piece published by MIT Center for Civic Media, Rodrigo Davies, a civic technologist and researcher, argued that crowdfunding platforms need to have an ethical backbone:

“Active stewardship is worthwhile for two reasons. Firstly, it’s not in the interest of platforms to sit back and allow campaigns that promote hatred or are misleading to operate using their resources and their brand name. Secondly, what is allowed to happen on a platform reflects (or will soon reflect) the community who feel excited about using it. Happy, productive communities don’t typically rally behind activities that aim to bring unhappiness to others.”

After GoFundMe banned the campaign, it seemed surprising that Indiegogo allowed a subsequent pro-Slager campaign to appear on its platform. The campaign raised US$1 380 in pledges, before being cancelled on Friday — and then only after a Twitter-led backlash. Speaking to Chicago Tribune, the company stated in an email that “Our Trust & Safety team regularly conducts verifications and checks and these campaigns did not meet their standards.”

When the campaign was first criticised however, it released a statement saying that it “allows anyone, anywhere to fund ideas that matter to them and just like other open platforms — such as Facebook, YouTube and Twitter — we don’t judge the content of campaigns as long as they are in compliance with our Terms of Use.”

It seems that it has since had a change in its terms and conditions.

GoFundMe and Indiegogo terms and conditions

Could it be then that the terms and conditions of both GoFundMe and Indiegogo have their shortcomings, both in writing and execution?

A look at Indiegogo’s terms and conditions, as they currently stand, shows that there’s still a fair amount of ambiguity:

“Campaign Owners are not permitted to create a Campaign to raise funds for illegal activities, to cause harm to people or property, or to scam others. If the Campaign is claiming to do the impossible or it’s just plain phony, don’t post it. Users must comply with all applicable laws and regulations in connection with their Campaigns, including offering Perks and using Contributions. Campaign Owners shall not make any false or misleading statements in connection with their Campaigns.”

From this it is not clear what prevents a campaign like that of Slager. The campaign is insensitive, as many on Twitter have pointed out, to the memory of Walter Scott, and to a larger community of black people, but it is neither illegal nor does it cause physical harm to anyone and it is not scamming anyone. People willingly donated to it.

GoFundMe terms and conditions are more specific. GoFundMe states that it does not allow “Campaigns in defense of formal charges of heinous crimes, including violent, hateful, or sexual acts.” It is clear that GoFundMe had an easier time enforcing its terms and conditions where the Slager campaign was concerned.

GoFundMe campaign

Biased terms and conditions enforcement

But despite this, GoFundMe has not always been above-board when it comes to effectively enforcing its terms and conditions.

In the Barronelle Stutzman case — a Christian florist who refused to provide full wedding support for a same-sex wedding — GoFundMe carried a campaign to help her, even though it was clear that Stutzman was a homophobe. The campaign was started after Stutzman was sued by the same-sex couple and the Washington State Attorney General found her liable for violating the Washington Law against Discrimination and ruled that both the state and the couple could collect damages and attorneys’ fees from Barronelle’s business and personal assets.

The campaign was started to help her, claiming that Stutzman was about to lose everything she owned. It campaign is still up on GoFundMe, even though it contravenes two of its terms and conditions that clearly state that “Campaigns in defence of formal charges of heinous crimes, including violent, hateful, or sexual acts” and “Materials including bigotry, racism, sexism, or profanity.” will not be allowed on the site.

In the Michael Slager case, GoFundMe acted promptly by banning it. But the question remains:  what guidelines does GoFundMe follow to ban campaigns? Why does in enforce its terms and conditions when it comes to some campaigns, and then not on others?

GoFundMe campaign2

Way forward

It is clear from those campaigns that have been banned, and those that haven’t, that the rules guiding crowdfunding are a minefield. There seems to be no consistency in enforcing the terms and conditions that exist, with crowdfunding sites free to choose when and when not to enforce them.

Considering that crowdfunding is an increasingly popular method of raising capital, it is critical that crowdfunding sites have clear rules, and enforce them fairly and consistently.

Image: Dan Mason



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