GoFundMe Is Remaking Disaster Aid. It Largely Helps the Wealthy.

GoFundMe Is Remaking Disaster Aid. It Largely Helps the Wealthy. - The New York Times

Supported by
SKIP ADVERTISEMENT

GoFundMe Is Remaking Disaster Aid. It Largely Helps the Wealthy.

The crowdfunding site raised more money for wildfire survivors with high incomes than for those who need help most, researchers found.

Christopher Flavelle writes about efforts to adapt to climate change.

As climate-fueled disasters destroy more American homes, the crowdfunding platform GoFundMe has exploded in popularity. Its appeal is simple: People can provide cash directly to survivors, which is quicker than insurance and often more generous than government aid.

But new research suggests that cash sent through GoFundMe disproportionately benefits the wealthy rather than those who most need help.

Researchers examined donations to hundreds of people who lost their homes in the 2021 Marshall Fire in Colorado, which destroyed more than 1,000 dwellings near Boulder. They found that those with household incomes above $150,000 received 28 percent more money, on average, than those with incomes below $75,000.

The authors concluded that the explanation largely revolves around social networks: Wealthier disaster survivors tend to be connected to more people, and those people often have more money to give.

“Crowdfunding gives higher-income survivors a bigger leg up,” said Emily Gallagher, an assistant professor of finance and real estate at the University of Colorado Boulder and one of the study’s authors. “We cannot count on this form of private charity to fill funding gaps.”

Dr. Gallagher and her colleagues said they plan to submit the paper to a peer-reviewed journal in March.

The data comes as traditional sources of funding for disaster recovery buckle under the strain of climate shocks. Weather-related disasters pushed more than 3.3 million American adults out of their homes in 2022, census data show. Of those, at least 1.2 million people were out of their homes for a month or longer; more than half a million of them never returned, fueling a growing diaspora of domestic climate refugees.

Federal disaster aid already disproportionately helps the wealthy, data shows. The Federal Emergency Management Agency recently conceded that its disaster programs often fail survivors, and pledged to overhaul them“to reach more people, provide more benefits and help them recover faster,” said Jaclyn Rothenberg, a FEMA spokeswoman.

And insurers, facing growing disaster costs, have restricted coverage and raised prices, leaving more Americans underinsured.

Crowdfunding is filling more of that gap. Ten years ago, in 2013, U.S. disaster recovery campaigns on GoFundMe raised a little more than $3 million, according to the company. By last year, that figure had jumped to more than $106 million. That’s about one-seventh of the amount that FEMA spent on grants for individual disaster aid — $765 million.

The growing role of crowdfunding can be seen in the aftermath of the Marshall Fire. Homeowners who got FEMA aid for property damage received an average of $2,564, the researchers estimated. By contrast, the average GoFundMe campaign for Marshall Fire survivors raised $23,744, they found. Among homeowners whose homes were destroyed in the fire, the average was $31,422.

Those donations were unevenly distributed.

Josh R. Engel, a 46-year-old engineering manager who lost his home in Louisville, Colo., was lucky compared with other survivors. His insurance paid about $775,000 to rebuild his ruined house. (Mr. Engel instead decided to rebuild and expand his house for about $1.4 million). He and his wife, a director at a home health care company, received about $60,000 through two GoFundMe campaigns that were set up by friends.

“Stuff just came in from around the world,” said Mr. Engel, who recently moved into his newly rebuilt home. “We’re on the fortunate side of this.”

David Leedy, a vice president at a financial services company who lost his house in the same fire, raised more than $30,000 on GoFundMe. He said the money helped pay for immediate needs — buying clothing and meals right after the fire, and then getting supplies for the rental house that he and his wife moved into as their home was being rebuilt.

“When you’ve got nothing, you need everything,” Mr. Leedy said.

Others who lost their homes were less successful.

A man who identified himself on GoFundMe as Don Wieser wrote that he had escaped the fire with only his clothing and wallet. “I am currently on disability,” he wrote on his campaign page. “I would seriously appreciate any help I can get from the community to help me rebuild my life.”

Mr. Wieser set his campaign goal at $15,000. He raised $8,183, according to his GoFundMe page.

Another disaster survivor, Adam Kucera, said on his GoFundMe page that the fire destroyed the converted school bus he had been living in. He wrote that he had been unable to navigate the requirements for getting help from FEMA or the American Red Cross.

“I am facing homelessness for the first time in my life,” Mr. Kucera wrote. “Please help me get my life back.” He raised $4,575.

Neither Mr. Wieser nor Mr. Kucera responded to messages seeking comment.

In an interview, Margaret Richardson, chief corporate affairs officer for GoFundMe, said this was the first time she had seen data examining the link between wealth and donations through the site. She said it was not surprising that wealthy survivors have access to others with money.

“We’re really a reflection of what’s happening in society,” Ms. Richardson said.

Christopher Flavelle is a Times reporter who writes about how the United States is trying to adapt to the effects of climate change. More about Christopher Flavelle

Learn More About Climate Change
Have questions about climate change?
Our F.A.Q. will tackle your climate questions, big and small.
Carbon-free electricity has never been more plentiful, but it hasn’t yet been enough to reduce reliance on fossil fuels. We looked at how electricity generation has changed over time
to help you understand today’s global picture.
Singapore is rethinking its sweltering urban areas to dampen the effects of climate change.
Can it be a model for other cities?
New data reveals stark disparities in how different U.S. households contribute to climate change.
See your neighborhood’s climate impact.
Did you know the ♻ symbol
doesn’t mean something is actually recyclable? Read on about how we got here, and what can be done.
Overuse of America’s groundwater in a changing climate is draining and damaging aquifers nationwide, a New York Times data investigation revealed.
Half the world could soon face dangerous heat. We measured the daily toll
it is already taking.