Will the Culture Wars Kill Crowdfunding?

When an Oregon bakery was fined $135,000 for refusing to bake a cake for a lesbian wedding – violating state laws prohibiting discrimination against gays – its supporters followed what has now become standard operating procedure: They launched a crowdfunding campaign to raise the money.

Melissa and Aaron Klein of Sweet Cakes by Melissa (Samaritan’s Purse).

With a healthy boost from conservative media, the Support Sweet Cakes by Melissa campaign raised a reported $110,000 in 10 hours, before GoFundMe removed it for allegedly violating the site’s terms of service.

Over the last year social crowdfunding platforms like GoFundMe and Indiegogo have become the latest battleground for the culture wars, where partisans can vote with their wallets and tell their opponents exactly where to stick it. Sweet Cakes is just the latest in a series of politically charged campaigns, ranging from defense funds for police officers charged with shooting civilians to those raising money for homeless LGBT youth.

Initially, most people donated to social crowdfunding campaigns out of a desire to help others, says Andrew Dix, co-founder and CEO of CrowdFund Insider.

“Now a lot of attention has shifted to the social advocacy space,” he says. “They’re showing support with their checkbooks for what they believe in.”

(GoFundMe)

Controversial campaigns that garner media attention can provide rich paydays for the platforms, which collect a small percentage of the monies raised. A recent GoFundMe campaign for Memories Pizza, an Indiana restaurant at the center of a controversy over gay rights and religious freedom laws, raised more than $842,000; 5 percent went directly to the site.

Read: The $800,000 Windfall for Memories Pizza: It Started as a Joke

But they’re also forcing some sites to take a more active role in overseeing the content of the campaigns they host. And no matter what position they choose, these platforms risk alienating large swaths of their contributors and opening themselves up to potential lawsuits.

Hell to pay

The Support Sweet Cakes By Melissa campaign was alive for less than 24 hours before GoFundMe pulled it. On the bakery’s Facebook page, its owners pinned the blame on Satan.

(Facebook)

The real reason was more earthbound. In a statement provided to GoLocalPDX, a Portland, Ore, based news site, a GoFundMe spokesperson claimed the site pulled the campaign because “the subjects of the ‘Support Sweet Cakes By Melissa’ campaign have been formally charged by local authorities and found to be in violation of Oregon state law concerning discriminatory acts.“

However, the statement noted that Sweet Cakes will still be permitted to withdraw all the monies raised. GoFundMe did not offer an explanation as to why the campaign would receive funds after violating the site’s terms, nor did it respond to multiple requests for comment by Yahoo Tech. GoLocalPDX also declined to provide Yahoo Tech with a copy of the statement it obtained from GoFundMe.

(Samaritan’s Purse)

The Sweet Cakes fundraiser has since been adopted by a Christian charity, Samaritan’s Purse. A spokesperson for the charity said it has not yet announced how much money has been raised so far.

No Crowds Allowed

This is not the first time GoFundMe has halted a controversial campaign. Last September, the site cancelled a campaign launched by an Illinois woman to publicly fund an abortion. A few days later it amended its terms of service to prohibit “directly funding an abortion (human or animal).”

The site’s term and conditions also prohibit “campaigns in defense of formal charges of heinous crimes, including violent, hateful, or sexual acts” as well as those based on “sorcery, unexplained sciences, or absurd claims.”

Earlier this month, GoFundMe briefly hosted a campaign for South Carolina police officer Michael Slager, who was videotaped shooting an unarmed black man 8 times, before also terminating it for violating the terms.

The Slager defense fund campaign then moved to Indiegogo, which closed it a few days later because the campaign “did not meet the standards….of our Trust and Safety Team,” according to an Indiegogo spokesperson.

Girls just want to have funds

But it’s not just conservative causes that are turning to crowdfunding to make their voices heard. In response to the GoFundMe campaign for Memories Pizza, activist and media consultant Scott Wooledge launched a campaign called Pizza4Equality. The aim was to raise money for Cyndi Lauper’s True Colors Fund, which helps homeless LGBT kids. After a month, it had collected just shy of $160,000.

(GoFundMe)

The campaign started “as kind of a lark,” says Wooledge. “Then it exploded. I tweeted it out, and then Anna Marie Cox retweeted it to her 1.3 million followers. When I started it I didn’t think for a million years we’d end up raising $160,000.”

In a phone conversation with Yahoo Tech, True Colors Fund director Gregory Lewis confirmed the receipt of the money.

There have been dozens of campaigns supporting victims of police violence on Indiegogo, which like GoFundMe allows personal fundraising on a wide range of topics, as well as campaigns supporting the officers involved in the incidents.

(Indiegogo)

Indiegogo’s Terms of Use prohibit campaigns used “to raise funds for illegal activities, to cause harm to people or property, or to scam others.” Otherwise, however, the site does not filter campaigns based on their content, according to an Indiegogo spokesperson.

At least, not yet.

A no-win scenario

“Generally speaking, I think crowdfunding sites are becoming more sensitive to hot-button social issues and paying closer attention what they will and won’t allow,” says Crowfund Insider’s Dix. “My personal opinion is that crowdfunding platforms do need to make a value judgement about campaigns. They shouldn’t just be agnostic and say anyone can make a campaign and we’ll let the crowd decide.”

No matter what path they choose, these sites are becoming increasingly vulnerable to litigation, says Joan Heminway, a University of Tennessee law professor who is currently researching how the top crowdfunding platforms curate content. Thanks to social advocacy, crowdfunding sites could be facing a no-win scenario.

“A lot of these sites don’t know whether they’ll be sued,” she says. “By screening out certain campaigns, platforms could be illegally discriminating against people seeking funding; by allowing others to raise money through their sites, platforms could be found liable if a campaign turns out to be fraudulent.”

Later this year, we’re likely to see the first platforms that allow people to invest in securities, making it possible to own stock in a company via a crowdfunding platform. That’s likely to prompt closer scrutiny of the crowdfunding model by regulators. Controversial social advocacy campaigns will bring even more attention, not all of it welcome. The same forces that are bringing social crowdfunding into the mainstream of American political discourse could ultimately be their undoing.

Email Dan Tynan here: ModFamily1@yahoo.com.