In Crowdfunding, New Source of Aid After Catastrophe

A television mounted high on a living room wall escaped the rushing waters from the St. Vrain Creek. But most of their furniture and appliances were buried in piles of mud. The presses, which Mr. Collins used to run his thriving T-shirt screening business from the back of the rented house, were smashed to pieces.

“There is no going back for us,” said Mr. Collins, 44, now living with friends in nearby Longmont. “But we are restarting the business even though we are starting everything from zero.”

With no flood insurance, and limited access to credit and small business loans, Mr. Collins turned to online charitable giving — a crowdfunding platform called GoFundMe — to help raise money to regain his footing.

Just two months since the floods, GoFundMe has helped him generate more than $8,000 in donations from 70 people. Combined with money from the Federal Emergency Management Agency for flood damage, Mr. Collins said he had enough to rent space in Longmont with a partner and order a new press and supplies.

“A lot of them are family and friends,” Mr. Collins said of the donors. “Most of the donations, probably half of them, are from clients who want me to go, go, go. About a quarter of them are from complete strangers.”

Kickstarter, the world’s largest crowdfunding platform, began in 2009 as a way for people to contribute, mostly for arts and other creative projects. Indiegogo was begun in 2008, initially to find funding for independent films but later joining other online platforms that offer a wide array of projects as varied as school field trips and global clean water initiatives. Nonprofit organizations like the American Red Cross have used Crowdrise and other online charitable giving platforms to raise funds.

Now, people are increasingly turning to crowdfunding and their personal online social networks to raise money not only after disasters but also to help cover medical bills and expenses arising from job loss or other challenging events. GoFundMe collects donations with credit and debit cards and passes them on to the beneficiaries after taking a 7.9 percent fee.

Brad Damphousse, chief executive and co-founder of GoFundMe, said Hurricane Sandy last fall was the first national disaster for which he saw a spike in people using the platform to help one another out.

“It is changing the way we give,” he said. “When people have the option to give to someone in a very targeted way and give to someone they know, love and care about, they are going to choose that path over a traditional charity or nonprofit.”

About $1.3 million was raised that way after Hurricane Sandy, he said. Victims of the Boston Marathon bombings, mostly seeking help for medical expenses, raised $3.4 million using crowdfunding.

Allison Fine, a co-author of “The Networked Nonprofit: Connecting With Social Media to Drive Change,” said crowdfunding helped people support one another directly in a time of need. “Instead of everyone gathering to raise a barn,” Ms. Fine said, “they can now give money directly after something happens.”

No one is suggesting, however, that crowdfunding platforms will replace the fund-raising might or relief efforts of the American Red Cross, United Way and other large, traditional charitable organizations. The Red Cross estimated that as of Oct. 30 it had received $5.6 million in donations and pledges for Colorado flood aid.

Jennifer Elwood, vice president for consumer marketing and fund-raising for the American Red Cross, said she did not view the online efforts as competition. “We have a completely new audience of people who care about the mission but are looking to help in a way that is relevant to them,” Ms. Elwood said.

In Boulder, Matt and Leah Kaplan have raised more than $24,000 from 129 donors with GoFundMe since the floodwaters roared down the mountain, blew out their back door and destroyed almost everything on the first floor of their home.

Mr. Kaplan said he and his wife were initially reluctant when a family member offered to set up a page on their behalf.

“I thought it was a little weird asking people for money,” said Mr. Kaplan, 44, a sales director for an outdoor-shoe company. “But so many old friends across the country were asking how they could help.”

Without flood insurance, funds from FEMA were not enough to cover the cost of the cleanup, remodeling and lost appliances and furnishings.

“We decided to give it a try, and we were just absolutely shocked at the support, the caring and the way that people just rallied to help us,” Mr. Kaplan said.

Mr. Collins also said he was stunned by the outpouring of support he received to help him restart his T-shirt business, which he is now calling Phoenix Ink, to “show everyone we will always rise above the ashes.”

When a sales representative and the chief executive of Ryonet Corporation, a printing press manufacturer, learned that Mr. Collins, a longtime customer, was struggling after the floods, the company offered him discounted pricing and free shipping.

Both men also personally contributed to Mr. Collins on GoFundMe. “Not a huge one,” said Ryan Moor, the chief executive, “but something to help him out.”

This article has been revised to reflect the following correction:

Correction: November 9, 2013

An article on Friday about using social media to raise money for disaster victims and for other causes referred imprecisely to the beginnings of Indiegogo, an online crowdfunding platform. While it did not expand its mission until 2009, the year Kickstarter was founded, Indiegogo did indeed exist before Kickstarter. (It started raising money in 2008 for independent films before expanding to other causes.)