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Crowdfunding raises $2 million for Boston victims; critics urge caution

From GoFundMe

Patrick and Jessica Downes of Boston each lost a leg in the marathon bombings. Now, friends are trying to raise funds to help pay for medical care through two top crowdsourcing websites.

Nearly a week after the Boston bombings, crowdfunding websites that raise money for medical tragedies from car crashes to cancer say they’ve received more than 23,000 pledges promising more than $2 million for the victims and families of the marathon attack.

That includes nearly $500,000 for Celeste and Sydney Corcoran of Lowell, Mass., a mother-daughter duo who were both severely injured as they stood at the finish line. And it includes more than $560,000 directed to Boston newlyweds Jessica Kensky Downes and Patrick Downes, who each lost a leg in the blasts.

“All of us were like, ‘How can we help?’” said Leslie Kelly, 56, of Pebble Beach, Calif., whose two daughters grew up with Jessica Downes, 32. “We felt so helpless. I thought, we can’t all send flowers. I couldn’t sleep all night. I got up the next morning and started a Wells Fargo account and then got the word: You need to do something online.”

Kelly started an account at GoFundMe, while other friends of the pair turned to GiveForward, two of the top three sites that say they provide a quick, easy way to get money directly to specific victims at a time of need.

“Crowdfunding is actually very empowering to the donors and supporters,” said Brad Damphousse, chief executive of GoFundMe, which has raised nearly $1.3 million through its “Believe in Boston” campaigns. “It’s a way of being part of the solution instead of smoldering about the problem.”

But experts in charitable fraud warn that the fundraising efforts based on the Kickstarter.com model may be a risky way to offer help. That site helps painters, filmmakers and musicians raise funds for creative projects, and was the first online crowdfunding website to make the practice widespread. 

“You want to make sure that the money you donate goes to the intended party,” said Allan Bachman, education manager for the Association of Certified Fraud Examiners.

The top crowdfunding sites -- GoFundMe, GiveForward and YouCaring -- all say they vet the people who set up fundraising accounts for medical victims, and they all say they’re quick to pull the plug at the first sign of anything suspicious.

“We’ll suspend and investigate the fundraiser after one flag,” said Ethan Austin, co-founder and president of GiveForward, which has raised more than $41 million since it started in 2008.

The nature of the Internet and the personal ties to the accounts mean that the environment is self-policing, said Damphousse, whose site has raised about $54 million for medical, educational and other causes since 2010.

“The thing about crowdfunding is, it’s all based on social proof,” Damphousse said. “There’s so many more eyeballs on these campaigns ... If you’re a bad steward on the Internet, word travels fast.”

The way the sites work is this: Friends, family or sometimes the victims themselves set up an account. The organizers review the requests before allowing them to go live. If approved, the funds go directly to the recipients, usually within three to five days, Damphousse said. 

GoFundMe takes a 5 percent fee from all money raised and another 2.9 percent plus 30 cents per transaction goes to billing fees charged through WePay or PayPal, a total of about 8 percent. GiveForward charges a 7 percent fee, including billing charges, but offers donors the option of covering those so that all money goes to the recipients. About 63 percent do, Austin said.

YouCaring doesn’t charge fees at all and instead gives donors the option of giving extra money to run the site, said Michael Blasco, a spokesman for the company that has raised about $20 million in two years.

“You look at some of these fundraisers and they’re raising $300,000. That’s $20,000 to $30,000,” he said. “We’re completely free.”

But fees aren’t the only worry, said Ken Berger, president and chief executive of Charity Navigator, an independent, nonprofit group that evaluates charities.

A system that approves accounts within hours and promises to move money within days is ripe for problems. “It’s better than nothing at all, but self-policing has its limits,” he said.

Leslie Kelly said she felt good about the vetting that GoFundMe performed before she was allowed to open an account for Kensky, a Massachusetts General Hospital nurse, and Downes, 29, who just received a graduate degree from Boston College. They were married last August.

"There's so many more good people out there than evil," Kelly said, adding that the funds will go to pay for medical care not covered by the couple's insurance. 

More than 70 percent of those who seek funds on GiveFoward have coverage, but it doesn’t cover lost work, transportation and some procedures,  Austin said.

“Cancer is really our No. 1 fundraiser,” he said. “The costs are so enormous. There’s a huge gap between what insurance pays and the out-of-pocket costs.”

While critics understand the impulse to donate to one particular victim, they’re wary of any effort that promises to do that. Bachman suggests that people donate to established charities. If they must give to individuals, they should ask for an address to send a check instead of divulging financial information online, he advises.

Berger urges people who want to help marathon victims to send money to The One Fund Boston Inc., the charity just formed by Boston Gov. Deval Patrick and Mayor Tom Menino. Even though it’s new, it will be administered by Kenneth Feinberg, who oversaw the Sept. 11th Victim Compensation Fund and the BP oil spill fund.

It’s a sound way to direct the flood of compassion -- and money -- that inevitably follows a U.S. tragedy.

“That’s part of the reason that scoundrels and thieves are prosperous in a disaster, "Berger said, "because the generosity of the American people is phenomenal.”

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