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Crowdfunding: Donors and Fundraisers, Proceed with Caution

posted Jun 26, 2014, 11:23 PM by Siamak Ebarhimi

When her mare was in need of costly surgery, three-day eventer Sarah Braun didn't have the cash. So to help save her mare and finance the operation she turned to crowdfunding, a practice that's gaining popularity both in and outside the horse industry. And while funds can successfully be raised via Internet financing, some legal and fundraising experts say that caution is key for both donors and fundraisers.crowdfunding marketing

Crowdfunding uses the Internet to raise revenue through small donations from a large number of people. Frequently, donors are those who know fundraisers personally or via Facebook, Twitter, and other social networks. Other times donors are strangers who learn about the fundraising campaign by visiting the same networking sites.crowdfunding advertising

In March, Braun's mare Perfect Intentions needed emergency colic surgery. In the wake of the procedure, Braun established a fundraising page through the Internet crowdfunding firm GoFundMe. For a 5% per donation fee and a 3% per donation handling fee, GoFundMe provided Braun with a Web page where she could describe her needs and promote through Facebook and Twitter, and with an email address so she could field questions from potential donors. In all, Braun said she raised $6,500 of the $10,000 needed for the horse's recovery.indiegogo marketing

“I still have a lot to pay off, but they money we raised is really helpful,” Braun said.

Overall, Internet fundraising sites log millions of dollars in contributions annually. But Jennifer Williams, PhD, president of the Bluebonnet Equine Humane Society in College Station, Texas, said it's critical for both fundraisers and potential donors to do their homework.

“You need to thoroughly read over their terms of service, price structure, and so forth so there will be no surprises,” Williams said.kickstarter marketing

She also recommends using only well-known sites when considering crowdfunding.

Meanwhile, attorney Rachel Kosmal McCart of Equine Legal Solutions, PC, near Portland, Oregon, advises donors to contribute only to fundraisers they know, or finding other ways to donate if they're not comfortable with providing funds via the Internet.kickstarter project

“I would also suggest asking for contact information for the treating veterinarian and contribute by paying funds directly to the vet clinic,” McCart said.

Likewise, before donors contribute to equine rescues or other organizations seeking funds, McCart recommends they query fundraisers about management, physical, geographic location, and tax status.CrowdFunding advertizing

“Before donating money, see if you can get to a real live person and ask a question,” McCart said.

Finally, Williams cautioned, donations made to individuals could carry certain implications at tax time.CrowdFunding marketing

“If you are giving funds to an individual, it isn’t a tax deductible donation—it is a gift,” Williams said. “That’s okay, but people need to be clear that they cannot write gifts off on their taxes.”Kickstarter Marketing

In any case, Braun credits crowdfunding with saving her horse's life.

“I might have (had to make) some bad decisions if it were not for this fundraising option,” Braun said. “Instead, I still have her.”Indiegogo Marketing

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By David Khorram