How GoFundMe can affect your FEMA eligibility

Summary

The Indicator from Planet Money: How GoFundMe Can Affect Your FEMA Eligibility

Release Date: January 27, 2025

Introduction

In the January 27, 2025 episode of The Indicator from Planet Money, NPR hosts Waylon Wong and Darian Woods delve into the intricate relationship between crowdfunding platforms like GoFundMe and eligibility for federal assistance from FEMA. Amidst the ongoing devastation caused by Southern California wildfires, the episode sheds light on how individuals seeking assistance must navigate the complex landscape of fundraising and federal aid.

Impact of GoFundMe on FEMA Eligibility

The episode begins with Hosts Waylon Wong and Darian Woods addressing a pressing concern: while platforms like GoFundMe offer a vital lifeline for wildfire victims to raise funds for immediate needs, there are potential repercussions regarding eligibility for federal assistance.

Darian explains, “Victims of the wildfires are understandably going to GoFundMe to raise money... But warnings are going around that getting donations that way could make you ineligible for federal assistance” (00:33).

Waylon further clarifies, “Like from FEMA?” (03:30), emphasizing the critical connection between personal fundraising efforts and federal aid policies.

Federal Restrictions and FEMA’s Role

The hosts explore the Federal Emergency Management Agency (FEMA) guidelines that prohibit duplication of benefits. FEMA cannot provide assistance if the same need is being met through other means, such as donations from GoFundMe. Darian highlights, “Federal law puts in these restrictions for FEMA. FEMA isn’t allowed to duplicate benefits if you get them from somewhere else” (03:31).

Further elaborating, Darian states, “FEMA offers short-term assistance like food and a place to stay. It also gives longer-term help like grants for home repairs” (04:09). This distinction underscores the importance of understanding FEMA’s support structure and how external fundraising interacts with it.

Corporate Fundraising Initiatives

Transitioning from individual fundraising, the episode examines how brands are contributing to wildfire relief by donating proceeds from sales. Waylon shares his observation, “All these stores have been marketing products related to the wildfires... promising to give some percentage of sales to Wildfire Relief” (05:24).

The hosts scrutinize the transparency and effectiveness of these corporate efforts. They discuss Claire V., an LA-based fashion company, which claims to donate 100% of proceeds from select products to the Red Cross for wildfire relief. Claire Vivier, CEO of Claire V., explains, “We’re giving proceeds back to the Red Cross earmarked for the California wildfires” (06:19).

Understanding 'Proceeds' and Donation Breakdown

A critical inquiry revolves around the definition of "proceeds." Darian poses the question, “What does proceeds or profits even mean? Like how much of each sale actually gets donated?” (07:03).

Waylon responds, “For Claire V., it's the retail price minus what it's spent on materials and manufacturing. A Claire V. spokesperson says the company isn’t factoring in design, development, marketing, or e-commerce processing fees” (08:02). This revelation highlights that the actual amount donated may be significantly less than consumers might assume.

The episode further compares other companies’ approaches:

• Foxy Bay donates 10% of “e-commerce profits.”
• Pura Vida donates 100% of “net profits” on a specific bracelet, subtracting expenses like marketing and credit card fees.

Darian concludes, “It sounds like you really need to keep up with the fine print to know how much is going to the relief efforts” (09:13).

Recommendations for Donors and Recipients

Given the complexities outlined, the hosts provide practical advice:

• For individuals seeking aid, it’s crucial to be aware of federal restrictions when fundraising on platforms like GoFundMe to avoid jeopardizing FEMA assistance.
• For donors, understanding the fine print in corporate fundraising initiatives is essential to ensure that contributions genuinely support the intended relief efforts.

Waylon emphasizes, “The most direct way of making sure money actually goes to Wildfire relief victims is to donate directly... but you want to make sure you’re not overlapping with what the person’s getting from FEMA” (09:23).

Conclusion

The episode wraps up by acknowledging the multifaceted challenges in orchestrating effective aid during disasters. While platforms like GoFundMe and corporate fundraising initiatives play significant roles in disaster relief, both donors and recipients must navigate the intricate regulations and financial breakdowns to maximize the impact of their contributions.

Waylon concludes, “We think our questions have been answered hopefully to our listeners' satisfaction too” (09:40), leaving the audience with a nuanced understanding of the interplay between personal fundraising and federal assistance in the wake of natural disasters.

Notable Quotes

• Darian Woods (00:33): “Victims of the wildfires are understandably going to GoFundMe to raise money... But warnings are going around that getting donations that way could make you ineligible for federal assistance.”

• Waylon Wong (03:30): “Like from FEMA?”

• Darian Woods (04:09): “FEMA offers short-term assistance like food and a place to stay. It also gives longer-term help like grants for home repairs.”

• Waylon Wong (05:24): “All these stores have been marketing products related to the wildfires... promising to give some percentage of sales to Wildfire Relief.”

• Darian Woods (07:03): “What does proceeds or profits even mean? Like how much of each sale actually gets donated?”

• Waylon Wong (08:02): “For Claire V., it's the retail price minus what it's spent on materials and manufacturing. A Claire V. spokesperson says the company isn’t factoring in design, development, marketing, or e-commerce processing fees.”

• Waylon Wong (09:23): “The most direct way of making sure money actually goes to Wildfire relief victims is to donate directly... but you want to make sure you’re not overlapping with what the person’s getting from FEMA.”

This episode of The Indicator from Planet Money provides a comprehensive exploration of the delicate balance between leveraging crowdfunding for disaster relief and maintaining eligibility for essential federal assistance, offering valuable insights for both those seeking help and those looking to contribute effectively.

Transcript

[NPR]

Npr.

[Waylon Wong]

This is the Indicator from Planet Money. I'm Waylon Wong here with Darian Woods. Hey, Darian.

[Darian Woods]

Hey, Waylon.

[Waylon Wong]

So often on the show we do listener questions, but today is kind of a twist on that idea because we actually had our own questions. We have questions and our questions are about the LA wildfires because as we were reading around, there were some curious things that popped up that we wanted to look into.

[Darian Woods]

Yeah, so for example, victims of the wildfires are understandably going to go fund me to raise money. But warnings are going around that getting donations that way could make you ineligible for federal assistance. We get to the bottom of that.

[Waylon Wong]

One and we explore what it means when brands say they're donating proceeds of sales to Wildfire Relief.

[Darian Woods]

We will have answers for you and for us after the break.

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[Darian Woods]

Wildfires are still burning across Southern California. The Palisades, Eaton and other fires have destroyed thousands of homes and displaced at least 100,000 people.

[Waylon Wong]

And this means a lot of people are in need of support. And in these modern times, you see folks turning to GoFundMe yeah, GoFundMe, the.

[Darian Woods]

Super popular platform being used for medical care for people trying to avoid getting evicted and for disaster relief like the LA wildfires now.

[Waylon Wong]

Yeah. I saw a fundraiser for a 75 year old woman who couldn't afford fire insurance and then lost her whole house. I saw another one for a photographer who lost 10 years worth of work.

[Darian Woods]

And you see a big range in the success of these campaigns. Some might raise a few hundred dollars, others tens of thousands. But having a GoFundMe fundraiser could make people who post them ineligible for federal assistance.

[Waylon Wong]

Like from fema?

[Darian Woods]

Yes. I found that federal law puts in these restrictions for fema. That's the Federal Emergency Management Agency. FEMA isn't allowed to duplicate benefits if you get them from somewhere else. FEMA has this video online that explains what this FEMA may be able to.

[Charles Schwab]

Help you to replace a vehicle that was damaged during the disaster. However, if your GoFundMe page clearly states that the funds you're raising will be used to replace your card, FEMA won't be able to provide assistance for that specific need.

[Waylon Wong]

Okay, so you can't fundraise for like home repairs or funeral expenses specifically and then go ask FEMA to cover the same thing.

[Darian Woods]

Yeah. And so while GoFundMe can be great, you might be surprised at the kinds of resources that FEMA offers. It's it sends short term assistance like food and a place to stay. It also gives longer term help like grants for home repairs.

[Waylon Wong]

So it can be a big deal if victims of say, a California wildfire suddenly don't have access to FEMA funds. I've actually seen a lot of social media posts and news articles that warn people about this.

[Darian Woods]

And to be clear, it's not just GoFundMe that could make somebody ineligible for federal assistance. It's also non profit help or insurance payouts, bake sales. Really? Any fundraising.

[Waylon Wong]

I mean, does GoFundMe make it clear that this is a potential issue?

[Darian Woods]

Yeah. So I made a draft fundraiser in LA to try to find this out. And there is no obvious warning, although there is some language in an FAQ on the GoFundMe website. We reached out to GoFundMe and they referred us to FEMA.

[Waylon Wong]

Okay. So if you're a victim of the California wildfires or any other natural disaster, please be aware of the restrictions that can come with GoFundMe support.

[Darian Woods]

Exactly. Now, Waylon, onto your question. You were wondering about how brands are providing relief to people affected by the wildfires.

[Waylon Wong]

That's right. If you know one thing about me, Darian, it's that I'm always online shopping. And so, of course I noticed that all these stores have been marketing products related to the wildfires, like earrings with LA Lakers colors or a fleece jacket that features Venice Beach. And these brands are promising to give some percentage of sales to relief. Eff. Or they're advertising certain products and saying, if you buy these, we'll donate the proceeds to Wildfire victims.

[Darian Woods]

Right. I guess that's a hybrid capitalism, social good kind of event.

[Waylon Wong]

Yeah. And I was curious, what does proceeds or profits even mean? Like how much of each sale actually gets donated? So we reached out to Claire V. It's an LA based company that makes handbags and clothes, and it employs over 100 locals. Claire V. Says it's donating 100% of the proceeds it makes from select products to Wildfire Relief. Claire Vivier is the founder and CEO of Clare V. When we started to.

[NPR]

See the extent of the devastation in Los Angeles and the extent of the displaced people, we knew that we had to give back. So we came back to work and we just put into work on that day, Los Angeles JE T shirt and hat. And they've been for sale ever since. And we're giving proceeds back to the Red Cross with the earmarked for the California wildfires.

[Darian Woods]

All right, a T shirt and a hat. Let me just pull this up. I want to see it for myself. Okay. I see a dark blue hat for $60 reading Los Angeles J'Taim. And a white shirt with the same phrase and blue lettering for $100.

[Waylon Wong]

Right. And Claire V. Is donating 100% of the proceeds from the sales of these specific products to the Red Cross for Wildfire Relief. We asked her why she went this route.

[NPR]

We are a fashion company. It is what we do. So we, we. We create things that people wear to make them, to express themselves and to make them feel good. So we make. It's part of our collection that we make T shirts and, and baseball hats already with different French sayings on them. And so it made a lot of sense that we would make a product with a French saying, something affectionate for Los Angeles and we would give back to. To our city.

[Waylon Wong]

Okay, so in this campaign, 100% of proceeds going to the Red Cross for Wildfire relief. As of January 21st, the campaign has raised $145,000 in proceeds.

[Darian Woods]

Okay, $145,000. That's not bad. But, Waylon, we keep saying the word proceeds, but what does it mean? Is it revenues Is it profits?

[Waylon Wong]

I know this is like the heart of my question. Right. So for Claire V. It's the retail price minus what it's spent on materials and manufacturing. A Clairv spokesperson says the company isn't factoring in design, development, marketing or E commerce processing fees.

[Darian Woods]

Okay, so for $100 shirt, how much gets donated to the red cross?

[Waylon Wong]

Between 70 and $75, according to a spokesperson. Claire says the company also raised money through a staff closet sale over the weekend. That's where staffers put their own clothes up for sale. And that effort raised another $20,000.

[NPR]

We're just doing our part. It's. It feels like. Feels like not enough when you're faced with the devastation that this city has been. Has faced.

[Darian Woods]

Okay, and so is this like a typical sort of arrangement? Have you looked at the breakdown of other companies donations?

[Waylon Wong]

You know, it's really kind of all over the place. I found a haircare brand called Foxy bay that's donating 10% of quote e commerce profits. And then there's this jewelry company, Pura vida. It's giving 100% of what it calls net profits on a specific bracelet. So for this company, it does subtract expenses like marketing and credit card fees.

[Darian Woods]

Sounds like you really need to keep up with the fine print to know how much is going to the relief efforts.

[Waylon Wong]

Right? And not all companies provide that kind of fine print on their website, so it's really hard to tell.

[Darian Woods]

So I guess the most direct way of making sure money actually goes to Wildfire relief victims is to donate directly.

[Waylon Wong]

Yes, except you want to make sure you're not like overlapping with what the person's getting from fema. As we learned earlier from your segment.

[Darian Woods]

It'S more complicated than we thought to do good.

[Waylon Wong]

Well, we did it. I think our questions have been answered hopefully to our listeners satisfaction too. Thanks for playing Darian, and if you.

[Darian Woods]

Have any further questions, Please email us indicatorpr.org this episode was produced by Cooper.

[Waylon Wong]

Katz McKim with engineering by Neil Tyvald. It was fact checked by Sierra Juarez and edited by Paddy Hirsch. Cagan Cannon is our show's editor and the indicator is a production of n.

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