Crowdfunding: Panhandling For Generation Z

As an author I am no stranger to controversy. I don’t go out looking for trouble but I also try not to filter my inspiration either. In just the past two months I have written about Steve Harvey and the way he upset the tiny house community, the ways in which tiny house communities will not cure homelessness, and even how Donald Trump may be our nation’s best leader at this time. That said, it should come as no surprise that I am penning this article on the ill-effects of crowdfunding. Let me start by saying I am rarely a fan of it. I consider it on a number of levels and in a lot of instances to be personal fundraising for the tech-savvy at best and socialist panhandling at least.

Crowdfunding is one of the most overused terms in recent memory. It comes around like a bad penny. It isn’t just a term used for personal projects or unfunded ideas. It has even made its way into startup investing, not-for-profit operational expenses, and research models. Because there are a several kinds of crowdfunding in today’s market, the distinction between them isn’t always so clear. Historically it has been around for generations in the form of telethons and boosters. Take NPR for example.

Twice a year – without fail – your local NPR station will hold a campaign drive in which they will play snippets of “example programming” that is cleverly sandwiched between please for financial assistance as “operators are standing by.” The host typically talks about the kind of programming available because of donations like yours and then transitions into the budgetary needs of the station. The caveat is that the station only requests from those who openly support the programming of the station and can’t imagine life without it. They target their current subscribers and market segment. No harm. No foul.

On April 5, 2012, President Obama signed into law The Jumpstart Our Business Startups Act or JOBS Act, as a law intended to encourage funding of United States small businesses by easing various securities regulations. It was aimed at creating new ways for investors to fund startup businesses. Some may argue though that it opened Pandora’s box for platforms like GoFundMe and Kickstarter which now act as the Silicon Valley of the early millenium (as well as a soapbox for those who feel they have a “cause.”)

Let’s take a look at what can most clearly be defined as three categories of crowdfunding:

Reward/Donation – In return for a donation (usually set in tidy increments) from fans of a project or product, a business or non-profit offers an incentive. These incentives can range from a “digital shout out” to having your name appear in credits of a movie to an actual finished product of what you are supporting. This $10+ billion worldwide segment is led by Kickstarter and Indiegogo and allows pretty much anyone on board who may be looking for funding from anyone else.

Lending – This segment includes platforms like LendingClub, which helps connect borrowers with lenders over the Internet for personal or business loans. It avoids traditional banking methods and can often come with high risks or high interest rates.

Equity crowfunding – This is a complex segment and really breaks down into two pieces.

  • Accredited – This group includes AngelList, FundersClub, etc. These are membership organization and are only open to accredited investors and oftentimes have sophisticated terms and policies.
  • Equity – The JOBS Act calls for this kind of crowdfunding because it allows anyone to invest in a startup while gaining the potential of equity in the company.

It’s safe to say that the crowfunding I am most talking about and the segment we are most familiar with is the reward/donation kind. It allows you to finance innovation directly or at the product level. Contributors pre-purchase items (as is the case with something like the Smart Parka) products or simply donate to bringing it to market. As you would imagine equity crowdfunding investors (like the style of the popular show Shark Tank) take ownership in the company in exchange for investment dollars. But what happens when the reward part of the equation is removed? What happens when a request is made by an individual and not a fledgling business? Is it then still reputable or is it little more than modern day panhandling? Crowdfunding in its latest iteration has sadly become the new way to seemingly finance your personal life.

Let it be known. I am not judging in these allegations. I am not saying that someones student loan debt is any more important or any less important than someones desire for IVF treatment so they can start a family. I am also not saying that a film project is a more worthy cause than building a tiny house for yourself. What I am saying though is that those sort of personal requests have the ability to desensitize the generous public in a very new way. I remember reading an article once that interviewed a young couple that turned to crowdfunding to pay for some medical needs. Their “campaign” was funded and they received an unusual amount of money. The husband was quoted as saying something like if it wasn’t for crowdfunding, we’d probably have to take out a loan or beg family members. Where is the accountability in that though? Where is the accountability in asking each person that sees your “campaign” to donate just one dollar towards something that is deeply personal. Why not involved your family and close friends? Why not take out a loan? Are those deplorable options? Are they not the tenants of which our society was founded? I think the industry on the whole is one that is guided by raw emotion.

Giving a buck makes you feel good. Giving $5 makes you feel even better. And giving anything under the premise of helping out another? Priceless! But let’s be honest. It is a slick marketing technique. It is the same concept as NPR started years ago. Ask complete strangers to give money at the risk of a penalty; severe or not. If a couple is trying to adopt a child but they don’t reach their campaign goal, the child does not get adopted and runs the risk of (fill in the blank). Pander to emotion of the public who is looking for any way to feel better about themselves or the world around them. Why in today’s global marketplace should anyone have to work hard, save their money, and postpone a project until said funds are raised? That is archaic. Why not just extend the arm, raise the palm to the sky, and ask “brother won’t you spare a dime?”

What do you think about crowdfunding? Should it be reserved for businesses and commerce or does it have a place in the Average Joe lifestyle?

By Andrew M. Odom for the [Tiny House Blog]

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B - April 27, 2016 Reply

I think it depends on the project. For a film or some piece of art? I’m all for that. For a fundraiser for someone’s illness? Everyone needs help, and it’s no different from going into a store or restaurant and seeing a donation jar at the cash register.
However, I’ve seen crowdfunding for stupid stuff, too. Unfortunately, I do have a cousin who is guilty of asking for money because he doesn’t want to get a job. He never gets the money, thankfully, but there are always going to be people who abuse something’s original mission.

    Andrew M. Odom - April 27, 2016 Reply

    Agreed. There are some areas where it is entirely appropriate. However, even that can be a crapshoot these days. I point to the overwhelming response the ‘Coolest Cooler’ received which surpassed $13 million. We all have to be wise stewards of what we support and how. It is far too easy for folks to just panhandle digitally.

    Thank you so much for your comments B.

Erin - April 27, 2016 Reply

I’m not comfortable with panhandling of any kind, whether in person or via technology. I’m alarmed at some of the requests for money I’ve seen on gofundme in particular. I think they’re often set up by a well-meaning friend or family member, but I personally would be horrified if someone did that on my behalf.

Ericka Cooper - April 27, 2016 Reply

I have a cousin who uses crowd funding to help pay for the most expensive treatments for his daughter. She has a medical condition where her brain is fine, but locked in a non-responsive body. They pay for what they can, family helps in every way possible, the church and community step in all the time, then they resort to crowd funding in the end. I’ve seen this child able to take gigantic strides in improvement and this kind of crowd funding without tangible reward I support. We need to remember that in the past a child like this would not only not had these opportunities, she would not have lived. Our world becoming smaller through technology has improved lives immensely by giving people like her a chance and people like us to support her.

As for the others? What’s cooler than getting in on the ground floor of art and/or invention? But those using it for literally panhandling? Get a job. Pay taxes. Get a life.

    Andrew M. Odom - April 27, 2016 Reply

    And there is where the line needs to be drawn as you point out Ericka. While crowdfunding has allowed for some sensational opportunities in various situations your cousin has done all I ask. He pays for what he can. The family pitches in. The church and community help. That in itself is crowdfunding. It just isn’t a digital version. What I am against is that I do not like the anonymity that often comes with digital fundraisers. How is one expected to decide what child deserves medical treatment and which one doesn’t? It is emotionally complex. I find myself much more invested in someone I know or someone I can help in a multitude of ways besides just a PayPal donation.

Michelle - April 27, 2016 Reply

I have taught my children that their standard of living will be in direct proportion to their work ethic. Yes, they need help. But sending out an email from the comfort of one’s couch and asking strangers to donate to your project is a bit lazy if you ask me. On the other hand, if several thousand people only donate $1 to my “cause” then I wouldn’t have had to use my own money at all! No harm to them, right? I’m on both sides of this fence but tend to lean towards the “hard work is its own reward” way of thinking.

alice h - April 27, 2016 Reply

I’m fine with people begging for money as long as it’s not in my face. I can easily avoid crowdfunding sites but I do think they should be clearly designated as to what type of appeal it is so people can narrow down what they have to look at. Interesting innovations or worthy causes requiring funding would interest me more than just some random character wanting money to do their own thing with no benefit to anyone else. People can ask but you’re under no obligation to give.

Aria - April 28, 2016 Reply

What about those who are struggling to make ends meet? People who are working 40, 50, 60 hours a week at a full time job as a supervisor or manager and yet are STILL not paid well enough at even age 36 with over 15 years of experience and not able to afford a place to live or afford medical issues that arise because our economy is so messed up that they do not want to pay people living wages when its cheaper for them to put most people either part time or full time no benefits?.

This is the struggle I have been fighting for years. I even went back to school and got a degree in medical assisting, working 3 jobs at one time, putting myself into larger debt, and yet even with the help of my school that I graduated from, I still cannot land a job in that field because of stipulations like, “have to have previous experience”, or “have to know another language”, or even “you have to know this skill” which isn’t taught in the programs you went to school for, and dish out MORE money to either learn another language, go back to school AGAIN, find some place willing to put me back on ground zero at absolute bottom pay and part time hours again to work back up over a course of years and not be able to pay my bills with, or continue to look for another job in the category I’m already in, that can pay a tiny bit better without a verbally abusive manager destroying your self esteem and draining you of all life, in hopes of not getting fired so you can still pay all your bills with still nothing left to save up for later in life.

There are a lot of people like me and worse off as well and most turn a blind eye and don’t care or even know. People like me who DO work HARD as hell and still can’t seem to get anywhere. People like me who just have a dream of wanting a little plot of land and be able to live off it in a small, well kept dwelling. Hell, then you realize people who sell most land have ridiculous stipulations and regulations like, you can’t build a dwelling smaller than 1200 square feet when I know all I need is 500 to 800 square feet like a small apartment. Its ridiculous that we are conditioned to live in small apartments and get so comfortable that when we want a home that’s actually that small because we are either used to it or find we can live well in it, we are prevented from making that a reality when you want to build your own home.

Some people need the financial help and go to these sites for it. Some people believe in their dreams and consider it fair to donate and help such people since we haven’t fixed those financial and economical problems. There are some crowdfunders who are con artists, some are people who have really cool item ideas, or even program ideas to help others. Yet they all do get funded. There are people out there who are kind and believe everyone needs a chance. That has never changed. It is just more noticeable NOW due to internet. That’s just fact. To loathe the idea that people are asking for help through these sites when they have exhausted every other option to make their dream, idea, item, or program a reality, is kinda rude and cynical when all of this is, all of this giving to help see a dream come to fruition, is now just easier to find in the world.

    Aria - April 28, 2016 Reply

    Also forgot to add about the family thing that bugged me. You think, why not ask family? What about those who don’t have family anymore? What if their parents are passed, they are all on their own, or even have siblings who are so angry with one another that they never speak or would ever help? Some people are actually ON their own. You have to realize some people don’t have “backups” or help.

      Andrew M. Odom - April 28, 2016 Reply

      Aria, honestly, it seems that you just want to verbally vomit because you were personally offended by my thoughts. I am sorry the idea of family bugs you. Actually, no, I am not sorry. It is unfortunate that some don’t have family to turn to for support. I can’t imagine how difficult that must be. But not once in history has being on ones own meant they were without hope and ability.

    Andrew M. Odom - April 28, 2016 Reply

    And I quote, “What about those who are struggling to make ends meet? People who are working 40, 50, 60 hours a week at a full time job as a supervisor or manager and yet are STILL not paid well enough at even age 36 with over 15 years of experience and not able to afford a place to live or afford medical issues that arise because our economy is so messed up that they do not want to pay people living wages when its cheaper for them to put most people either part time or full time no benefits?”

    Aria, I do not write from a place of privilege. I work extremely hard to make ends meet. Most weeks find me putting in 60+ hours at one of three positions I hold. I have to throw a penalty flag though on the idea that with a 60 hour work week there are not options for living. That sounds more to me like a financial priority issue rather than a housing crisis. I can’t be sure because I have no idea what all the facts of the situation are. Our economy is messed up, yes. But there are always options. The key is how willing you are to pursue those options.

    It sounds like you are in an unfortunate situation with school payments, lack of job opportunities, etc. Again, I can’t speak to that because I don’t know all the facts. However, I have always said that we are the most over-educated country in the world and our inability to succeed is a result of that. Sometimes when a job digging ditches pays what you need to earn, you have to put down the sheepskin and pick up the shovel. I certainly have. I have 3 diplomas and none of them have helped me in my current occupation. It is a hard fact but a true one.

    I agree with you. Zoning and regulations can be frustrating. Our social conditioning is unfortunate. But we all have to spend less time dwelling on that and more time on finding an alternative or advocating for a solution. I have noticed that in your reply you almost took no credit for your current struggles. You didn’t speak of any bad spending habits, ill-objectives, or pratfalls. You chalked up your life as being a result of everyone else trying to hold you back. I would encourage you to start right now re-claiming your life. Don’t be anyone else’s pawn. Find your passion for THRIVING (and not just surviving) and move towards it.

    I quote again: “To loathe the idea that people are asking for help through these sites when they have exhausted every other option to make their dream, idea, item, or program a reality, is kinda rude and cynical when all of this is, all of this giving to help see a dream come to fruition, is now just easier to find in the world.”

    Actually, no, it is not rude and cynical to “loathe” the idea (which is your choice of words, not mine.) It is actually quite pragmatic. We all have bills and responsibilities. We all have dreams and desires. But we haven’t all lost our scruples and sense of dignity to work for what we have and connect with local supporters (friends and family) rather than tapping the anonymity of the Interwebs and hoping their sensibilities will be stimulated by our plea.

    Aria - April 28, 2016 Reply

    I forgot to mention about the family thing that kinda bugged me. You think, why not ask family? What about those who don’t have family anymore? What if their parents are passed, they are all on their own, or even have siblings in really far away states or who are so angry with one another that they never speak or would ever help? Some people are actually ON their own. These are people who don’t have “backups” or help. They still need help.

Aria - April 28, 2016 Reply

What about those who are struggling to make ends meet? People who are working 40, 50, 60 hours a week at a full time job as a supervisor or manager and yet are STILL not paid well enough at even age 36 with over 15 years of experience and not able to afford a place to live or afford medical issues that arise because our economy is so messed up that they do not want to pay people living wages when its cheaper for them to put most people either part time or full time no benefits?.

This is the struggle I have been fighting for years. I even went back to school and got a degree in medical assisting, working 3 jobs at one time, putting myself into larger debt, and yet even with the help of my school that I graduated from, I still cannot land a job in that field because of stipulations like, “have to have previous experience”, or “have to know another language”, or even “you have to know this skill” which isn’t taught in the programs you went to school for, and dish out MORE money to either learn another language, go back to school AGAIN, find some place willing to put me back on ground zero at absolute bottom pay and part time hours again to work back up over a course of years and not be able to pay my bills with, or continue to look for another job in the category I’m already in, that can pay a tiny bit better without a verbally abusive manager destroying your self esteem and draining you of all life, in hopes of not getting fired so you can still pay all your bills with still nothing left to save up for later in life.

There are a lot of people like me and worse off as well and most turn a blind eye and don’t care or even know. People like me who DO work HARD as hell and still can’t seem to get anywhere. You think, why not ask family? What about those who don’t have family anymore? What if their parents are passed, they are all on their own, or even have siblings who are so angry with one another that they never speak or would ever help? Some people are actually ON their own.

Then there are people like me who work hard and just have a dream of wanting a little plot of land and be able to live off it in a small, well kept dwelling. Hell, then you realize people who sell most land have ridiculous stipulations and regulations like, you can’t build a dwelling smaller than 1200 square feet when I know all I need is 500 to 800 square feet like a small apartment. Its ridiculous that we are conditioned to live in small apartments and get so comfortable that when we want a home that’s actually that small because we are either used to it or find we can live well in it, we are prevented from making that a reality when you want to build your own home.

Some people need the financial help and go to these sites for it. Some people believe in their dreams and consider it fair to donate and help such people since we haven’t fixed those financial and economical problems. There are some crowdfunders who are con artists, some are people who have really cool item ideas, or even program ideas to help others. Yet they all do get funded. There are people out there who are kind and believe everyone needs a chance. That has never changed. It is just more noticeable NOW due to internet. That’s just fact. To loathe the idea that people are asking for help through these sites when they have exhausted every other option to make their dream, idea, item, or program a reality, is kinda rude and cynical when all of this is, all of this giving to help see a dream come to fruition, is now just easier to find in the world.

Claire - April 28, 2016 Reply

Not everyone is capable of going it on their own. The economic system is not working for the greater good of all only a few. Crowd sourcing is ligit for those having to work and think outside the box. And we all have option to not fund.

    Andrew M. Odom - April 28, 2016 Reply

    The economic system is not one built to benefit or harm anyone. The economic system we live under is a capitalist one. By definition that means our country’s trade and industry are controlled by private owners for profit, rather than by the state. If you believe we are anything other than that than I think a reconsideration is in order. The idea of digital panhandling is not about thinking outside of the box most of the time. It is about a person peddling their personal dreams and desires (which we all have, mind you) in the hopes that the law of numbers will work in their favor. “If every person just gives one buck and I reach 1,000 people then I will have raised $1,000.” I ask you Claire. Where is the accountability in that? Where is the pride? Where is the satisfaction of personal achievement?

    You are right though. We all have the option to not fund. That doesn’t save us from being inundated with requests though. What if EVERY street corner had a physical panhandler on it? After a mile wouldn’t you grow tired of the requests?

      Karen - May 24, 2016 Reply

      Where I live, there IS a panhandler on every corner– at least by the highway. Sometimes up to 4 at busy intersections, and they take shifts at the best corners. My gregarious husband stops the car and gets out to talk to them. A few people are truly desperate, with an awful story and my husband is a tenderhearted guy so he often goes out and gets them what they need and givse them money. But you’d be shocked at how many of them are just regular people looking for some extra pocket money (“My kids want to go shopping at the mall” “C’mon man, everything helps”) or would rather beg than use societal programs because they like the feeling of being a sort of entepreneur. Or are just padding a savings account –no kidding! My husband has offered some people jobs working at our house, doing yard work for $15 an hour (!) One man accepted and did a good job raking leaves for half a day. Another guy showed up drunk but worked really hard once he got there. Every other person has turned my husband down because they make more money begging. My husband ask them, “Don’t you want to actually PRODUCE something, DO something– not just get money for nothing because people pity you?” Begging is dehumanizing, which is why people in the past saved it for a last resort.

      About crowdfunding, our local kombucha company had a campaign to pay for an expensive new bottling machine. They said that they were so successful that their employees were working really hard to keep up with demand and deserved shorter days and more vacation. I was like, don’t you buy the bottling machine with the profits from your increased sales??

        Andrew M. Odom - May 25, 2016 Reply

        Excellent points Karen. American enterprise is being tainted by this sort of digital panhandling as well. There used to be a time when businesses would turn revenue into expansion and then repeat the process so as to always be offering enhanced service/products based on the popularity and success of their business.

Chris - May 2, 2016 Reply

My issue (and I think you raised it too) is that there is no accountability behind any of these crowd funding schemes. I think an overwhelmingly large amount of them are designed to satiate the ego, one way or another.

The only time I engaged in a crowd funding donation was for a friend who after a kidney transplant wanted to get back on his feet and set up a gofundme or something for some kind of school. The guy truly and well deserved a second shot at life, but one day the money was gone and there was never any update on the schooling or what happened, just *poof*.

My son on the other hand has bought into several tech startups, 3D printers and other gadgets and I feel pretty confident that 99% of them are this century’s version of those XRay specs ads from comic book back in the day. He hasn’t owned one gadget that’s worked properly and that hasn’t been a nightmare trying to get his money back from. I won’t allow him to buy anything that isn’t sold through a reputable marketplace like Amazon now. At least there we have multiple layers of consumer protection, reviews etc.

I agree though with a comment further up. I don’t see the issue with asking for help with medical expenses. Many of them are setup with and shared amongst friends and family as a central catch all for donations.

I would be interested in reading your comments on the tiny house movement. I have an interest in it myself, but as it’s matured, I’ve become disgusted with it. I’m kind of an old fashioned Yankee and it’s makes me sad to see it move so far away from it’s roots as a “recycle – reuse” mindset to one of near elitism. The concept of thriftyness has essentially all been forgotten. I feel much, much more at home with the tnttt crowd than I do the tiny house crowd.

I really do wish that many of these blogs would extend a hand to that crowd as well as the many people that have been forced into such a lifestyle who tend to inhabit Walmart parking lots and county park camp sites. It’s really a shame to me that the Tiny House movement is becoming one of a summer house that belongs to the hip, young bourgeois.

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