More and more, individuals are turning to crowdfunding, using sites like GoFundMe.com, to raise money to cover the costs of healthcare procedures. For companies in the credit and collection industry, understanding this dynamic is important as those fundraising efforts are being used to pay off unpaid medical debts.
When it was started, GoFundMe was not intended to be a site meant for raising money to cover medical procedures and healthcare bills. But nine years after it was launched, more than one-third of the drives started on the site are for something healthcare related. About 250,000 new healthcare fundraising efforts are started on the site every year, raising about $650 million. The CEO of GoFundMe has been named one of the 50 most influential people in the healthcare industry.
Unfortunately, the campaigns that generate the most attention and the most money are the ones that are the most tragic. In the absence of a comprehensive healthcare solution, GoFundMe has become both a “first stop” and a “last resort” for individuals facing monumental bills that they can never afford to pay on their own. Nearly half the country is underinsured and 40% of Americans do not have enough savings to cover an emergency expense in excess of $400. Put those two unfortunate circumstances together and you have a recipe for disaster.
Even the CEO of GoFundMe knows his site is not a viable, long-term solution.
The system is terrible. It needs to be rethought and retooled. Politicians are failing us. Health care companies are failing us. Those are realities. I don’t want to mince words here. We are facing a huge potential tragedy. We provide relief for a lot of people. But there are people who are not getting relief from us or from the institutions that are supposed to be there. We shouldn’t be the solution to a complex set of systemic problems. They should be solved by the government working properly, and by health care companies working with their constituents. We firmly believe that access to comprehensive health care is a right and things have to be fixed at the local, state and federal levels of government to make this a reality.
What wins the day for individuals seeking to raise money are stories. The more heart-rending and tragic, the more likely they are to attract donations.
In crowdfunding, this kind of storytelling has become crucial to success. “The story is obviously the paramount piece of any campaign, whether you’re raising capital for a big tech idea or raising capital for a problem you have,” Roy Morejon, the president and co-founder of Enventys Partners, a prominent crowdfunding consulting firm, told me. A good story attracts attention, from which more attention often grows. “We’ve now launched more than a thousand crowdfunding campaigns, and what we’ve seen at work is fomo—the fear of missing out—and a sense of urgency,” he said. “Nobody wants to be the first person on the dance floor, but, once there’s a party on the dance floor, people join in.” In most successful campaigns, the first third of funding comes from one’s real-life community. “Once that happens, you usually have about an eighty-per-cent success rate to fully fund the ask,” Morejon said.