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.