(image from gofundme.com)
The attorneys general of 23 states, led by California Attorney General Rob Bonta, have sent a demand letter to GoFundMe more than four months after the fundraising platform reversed course on web pages for 1.4 million for charities that were not previously approved by the nonprofits.
The Nonprofit Pages sparked outrage in the charitable sector and GoFundMe this past October took down the unauthorized pages, according to the firm. The letter from the attorneys general relies on public reports and not investigations by Bonta or the states. It makes reference to “potential violations under state law.”
A spokesperson for Bonta did not return messages for comment. A spokesperson from GoFundMe provided a statement from the firm. “GoFundMe is committed to helping nonprofits reach new donors by making it easier for the millions of people on our platform to discover and support the causes they care about. Nonprofit Pages were created using publicly available information to help people support nonprofit organizations, with donations going to the intended nonprofit.”
It continued: “After hearing feedback from nonprofit leaders in October, we acted quickly to make Nonprofit Pages fully opt-in, removed and de-indexed unclaimed pages, and turned off search engine optimization by default. The immediate changes we made in October directly addressed the concerns outlined in the letter received today from the state Attorneys General, and reflect our continued commitment to transparency, accountability, and partnership with the nonprofit sector. We welcome the opportunity to share with the Attorneys General the concrete steps we have already implemented in response to the issues raised.”
The letter To GoFundMe was dated March 3 and gave GoFundMe 14 days to respond. The letter outlines four areas of concern:
* Inaccurate Charity Information: “Public reports indicate inaccurate names, logos, social media sites, and charitable purposes of many charities were displayed on the pages created by GoFundMe, which demonstrates how imperative it is to obtain prior consent for fundraising using a charity’s information.”
* Disclosure about Donor-Advised Fund (DAF) Structure: “In some instances, the pages did not clearly disclose that contributions were made to a DAF (donor-advised fund) sponsor rather than the featured charity, explain the nature of a DAF vehicle or its implications for donor intent and fund distribution, and thereby risked deceiving and confusing the public.”
* Impression of Charity Affiliation: “According to public reports, the overall page presentations likely gave donors the impression that the pages were operated by, or directly affiliated with, the named charities –when instead, they were actually operated by GoFundMe.”
* Default Tip and Search Engine Optimization: “In addition, public reports indicate GoFundMe’s donation pages may have applied a default “tip” of approximately 16.5% intended to pay GoFundMe directly. Those same public reports allege GoFundMe used search engine optimization (SEO) that caused its donation pages to appear above official fundraising campaigns maintained by the charities themselves. If true, the SEO may have diverted prospective donors from giving directly to the charities, or worse, the public in need of charitable services, looking for the charities’ official websites.”
The demand for corrective action includes:
* Provide proof that GoFundMe has removed all unauthorized donation web pages and is requiring prior consent for charity donation web pages.
* Demonstrate the takedown procedures implemented to remove unauthorized donation pages without action by the charity.
* Explain how GoFundMe has modified its SEO practices to ensure charities’ own fundraising campaigns or websites are not disadvantaged.
The states also demand that GoFundMe undertake a comprehensive review of relevant policies and procedures and implement additional remedial measures.
