The rise (and scepticism) of Facebook fundraisers

Facebook fundraisers are becoming more and more popular. But how do they actually work? We take a look. 

If you’ve been on Facebook in the past few months, chances are you’ve come across a Facebook fundraiser. 

This year’s bushfire season has seen a massive surge in everyone from average Australians to NFPs and high profile celebrities using Facebook’s new donation functionality to raise money for various charities and community organisations. 

Georgia Mathews, grants manager at the Australian Communities Foundation, told Pro Bono News one of the reasons this new way of giving has been a hit is because it allows donors to give money without ever straying from their newsfeed. 

But with some campaigns going viral and millions of dollars being raised in just weeks, people are starting to question how their money is being handled by Facebook, and when their donation will actually reach the cause they thought they were donating to. 

Here we address some of those questions.

So you’ve donated money to a fundraiser. Now what?

The money doesn’t go directly to the charity. 

Any money donated to a Facebook campaign goes to the Paypal Giving Fund, a public ancillary fund that is set up to distribute money to charities, Krystian Seibert, industry fellow for the Centre for Social Impact at Swinburne University, explains.

“When you give money via a Facebook fundraiser, you’re making a recommendation to them [Paypal Giving Fund] that you would like your money passed on to the nominated charity,” Seibert tells Pro Bono News.  

On average, it takes PayPal Giving between 15 and 90 days to distribute money to the nominated charity.  

Paypal has the power

The directors of the PayPal Giving Fund have ultimate legal responsibility over what timeframe the money is delivered in and to whom. 

This issue has come to the fore recently with the Celeste Barber fundraiser, which has so far attracted over $50 million for the New South Wales Rural Fire Service (NSW RFS). 

Because such a large amount of money has been raised – far exceeding any initial expectations – there have been calls for the money to be split between different causes and all the state based fire-fighting services who are battling the bushfires. 

But Seibert says just sending the money elsewhere after the money was initially promised to the NSW RFS service is a bit tricky. 

“The directors of the PayPal Giving Fund have the ultimate legal responsibility but what they need to be mindful of is making it look like they’ve misled donors by deciding to send it to another fund when someone donated on the basis that their money was going to NSW,” he says.   

A PayPal spokesperson told the ABC on Wednesday that the company had begun granting funds to The Trustee for NSW Rural Service and Brigades Donation Fund.

It’s also important to keep in mind that while Barber’s fundraiser has attracted the most donations by a long shot in response to the bushfire crisis, a Facebook fundraiser for animal rescue charity WIRES has also attracted $14 million in donations, and a campaign for the Victorian Country Fire Authority has raised nearly $3 million.  

Read the fine print 

Another reason for discussion around where else the money could be spent, is because of the narrowness of how the NSW RFS can actually spend the money. 

Seibert says the donation can be spent on things such as equipment, any administration costs and other resources to assist the brigade to do their job. 

But it can’t be spent on supporting the families of a firefighter who has died in the line of duty, providing relief to people living in communities who have been impacted by bushfires, or other welfare functions. 

“People probably wouldn’t have realised that this donation fund had such narrow purposes and can’t even be used for supporting the families of firefighters who have died in the line of duty,” he says. 

Seibert’s advice on how to avoid this? Read the fine print. 

“Like with all these things, people set fundraisers up and they don’t usually read the fine print but it’s important to take the two or three minutes to read the terms and conditions,” he says. 

But he added that the onus wasn’t entirely on the fundraiser.   

“PayPal could explain in a bit more detail how it actually works, because they basically say you’re making a donation to the PayPal Giving Fund Australia, and that will then be distributed to the charity within 90 days subject to PayPal Giving Fund Australia’s policies,” he says. 

“I think they should probably explain a bit more [about] how it actually works because most people won’t click on the policies.” 

Pro Bono News reached out to PayPal Australia for comment but did not receive a response.