GoFundMe scandal with homeless vet hurts wide range of people, organizations

We’ve all seen the story of the couple who raised more than $400,000 for the homeless veteran and then (allegedly) kept most of the money for themselves.

The story went viral and likely was seen all over the world.

It appears now that the veteran, Johnny Bobbitt Jr., will get all of the money that was donated in his name (thanks to GoFundMe). But don’t be confused. This story does not have a happening ending.

Here’s the bigger tragedy: How many well-meaning causes will not get funded because of it?

Linda Czipo, the CEO and president of the New Jersey Center for Non-Profits, says everyone involved in the charitable giving space is impacted when stories such as these arise — even if GoFundMe-type pages are not actually registered charities.

“I think sometimes it’s hard for a person who’s not really familiar with charities, for an average donor, to distinguish between a GoFundMe campaign versus a specific charitable endeavor,” she said. “And, certainly, when something goes wrong, whether it’s through a charity or through an individual case like this one, it is going to taint everybody — it is going to give people pause regardless of what they’re going to try to give to.”

It’s not the first time this has happened. Everyone recalls hearing stories about charitable fraud following Superstorm Sandy. And we can only imagine how many cases of charitable fraud go undetected.

But, while Czipo said registered charities have more checks to ensure this type of thing doesn’t happen, don’t be confused: She is not against GoFundMe-type channels. She just feels events such as this show there needs to be more education for everyone involved.

“The beauty of some of these crowd-funding charity sites is they are a way to channel generosity,” she said. “But there are only limited protections to the people who give.

“I think there is a lot of conversation that needs to happen about the pitfalls or helping people have an informed mindset when they’re considering giving to a crowdfunding campaign that is not through a charitable organization. I do think that is a critical conversation to have.”

Czipo said she expects regulators will start taking a closer look at these sites. But she admits they may have a tough time finding a solution.

“I’m not sure exactly where the answer is,” she said. “But there’s that tension because it’s hard to make a climate that’s going to be absolutely foolproof without making it so hard to donate or so hard to actually do a good deed.”

Czipo said nonprofits of all shapes and sizes can learn from the GoFundMe model.

“We’re in an era of being able to give much more easily and readily online or through your cell phone,” she said. “It’s much more instantaneous and much more spontaneous. In that respect, the landscape is changing.

“It’s incumbent upon organizations to find ways to communicate the value and the importance of what they do in a way that can be understood and responded to much more quickly than sometimes they’ve been able to do in the past.”

Czipo said it’s all about making sure the intent of a gift is realized. And for all the talk of this latest tragedy, she said it’s not the reason giving is down right now.

That, she blames on tax reform.

“What we’re hearing is that a lot of people are holding off on giving until they understand the full ramifications of how it will impact their income,” she said.

The shortfall, she said, is not extraordinary — a few percentage points. But, Czipo is quick to say she hasn’t heard of anyone who is up in donations.

That may be the biggest tragedy of all.