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The Pros and Cons of Crowdfunding

With promising technology comes legal and tax considerations.

The Pros and Cons of Crowdfunding

It was an ordinary Sunday afternoon in the fall of 2017. Worship was just letting out at Burnette Chapel Church of Christ near Nashville when a gunman opened fire, first in the parking lot and then in the sanctuary. By the time the shooting ended, one church member was dead and seven others were wounded, including the minister and his wife.

Over the next few days, friends of the church sprang into action. They set up crowdfunding appeals to pay for funeral expenses, hospital bills, and other needs. All told, more than $37,000 was raised for victims on GoFundMe.com.

Appeals like this have become commonplace. When tragedy strikes—a fatal car wreck, a cancer diagnosis, a job loss, a natural disaster—Americans turn to crowdfunding as a way to help. About one in four Americans (22 percent) have donated to a crowdfunding site, according to a 2016 Pew Research report.

Crowdfunding has ...

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