It’s no secret that Americans pay more for healthcare than any other country in the world. In the age of crowdfunding and social media, many patients have turned to websites like GoFundMe and Kickstarter to raise money for medical care, often relying on the generosity of their loved ones and complete strangers.
However, a new study shows that these crowdfunding campaigns rarely work, leaving patients saddled with medical debt.
The Math Behind Crowdfunding
Many studies have shown that most crowdfunding campaigns rarely meet their goals, but a new study from the University of Washington, published in American Journal of Public Health, adds context to the situation. Researchers looked at nearly a half-million campaigns started on GoFundMe between 2016 to 2020. These campaigns raised over $2 billion collectively with over 21.7 million donations. However, they found that users in rural or low-income areas tend to raise far less money than those living in wealthy communities.
Less than 12% of campaigns raised enough money to meet their goal during those years, while 16% raised no money at all, and the median campaign raised less than $2,000.
2020 proved to be the worst year of all with a third of campaigns going unfunded.
The researchers cross-referenced their findings with latest census data. They found that many of the same disparities that exist in housing, education, and healthcare are playing out on GoFundMe.
For example, they found that 20% of campaigns were started in zip codes in the lowest income bracket in 2020, but these campaigns only raised 12% of all funding allocated that year, while those living in the wealthiest zip codes collected a disproportionate share of funding.
Mississippi has the lowest median household income in the U.S. It also raised the least amount of money on GoFundMe compared to all other states.
“Despite its popularity and portrayals as an ad-hoc safety net, medical crowdfunding is misaligned with key indicators of health financing needs in the United States,” the authors wrote. “It is best positioned to help in populations that need it the least.”
These disparities appeared to get worse in 2020. It’s possible that the COVID-19 pandemic affected people’s ability to donate money online, while also increasing the number of fundraisers created.
The researchers also noted that the website itself may be contributing to these inequalities. For example, the most successful campaigns tend to appear at the top of the results, while underfunded or unfunded campaigns get removed after a year.
“We tend to think of crowdfunding as something that can help out anyone in hard times, but this data really indicates that where people need the most help paying for health care, crowdfunding provides the least help,” said Nora Kenworthy, an author of the study and associate professor of nursing and health studies at University of Washington Bothell.
Considering the odds of successfully funding a campaign, these websites may give the public a false sense of hope when dealing with high medical debt.
GoFundMe even has a section on its website devoted to medical fundraising. It claims to have launched over 250,000 medical fundraising campaigns, raising over $650 million in donations a year.
“Because the campaigns people see on social networks are almost always the small subset that are shared widely, the public may have the impression that crowdfunding is more likely to be successful than it really is,” said study author Mark Igra, a sociology graduate student at the university.
“Crowdfunding works well for people with large social media followings or friends who have substantial financial resources,” Igra added. “Unfortunately, many of the people who need support most have neither of those things.”
The authors concluded that platforms like GoFundMe need to provide more data, so they can better understand the needs of their users. Igra believes that additional research will shed light on “the financial strains on people who seek crowdfunding, and the social supports that are or are not available to them.”
“This might lead us to better understand what kind of social safety net we need to prevent people from relying so heavily on a tool that doesn’t work very well for many people,” he said.
However, they said these websites do little other than act as a band-aid against the cracks in the healthcare system. The deeper issue stems from the industry’s aggressive billing practices that often put low-income families and individuals at risk. They argue that creating a bigger safety net and increasing patient protections would reduce the public’s dependence on crowdfunding in the first place.