With the average U.S. funeral costing more than $7,000 dollars, more people are turning to crowdfunding to help cover funeral expenses. We found an interesting story that explains how it works.
Crowdfunding is an online fundraising method where organizers seek individual contributions to meet their campaign goals.
“Most people do not plan their funerals. That leaves their loved ones figuring out how to cover the costs,” said Michael Blasco from YouCaring, a crowdfunding site for medical and memorial fundraising.
Fundraising campaigns can be set up through traditional crowdfunding sites like YouCaring, Indiegogo and GoFundMe or niche sites like Funeral Fund and Graceful Goodbye. GoFundMe for example, currently hosts more than 8,000 funeral campaigns while Indiegogo has helped fund more than 50 funeral campaigns, including some that raised more than $10,000 apiece.
Crowdfunding serves another useful purpose, which is it creates an online memorial for the person who has passed away. Many crowdfunding organizers post photographs and favorite anecdotes about their loved one on their campaign page to increase the odds of crowdfunding success. “People respond to stories,” Blasco said.
To boost response rates, some organizers even offer small tokens of appreciation to those who contribute. One Indiegogo campaign organizer offered a handmade remembrance bracelet for every $25 contribution while another promised backers who pledged $50 they would receive a hug.
“Crowdfunding brings people together around a cause,” said Rose Spinelli, founder of The Crowd Fundamentals site. “It can be a wonderful feeling to know people care and are sharing in the grief.”
If you want to participate in a funeral crowdfunding effort, you should educate yourself on the tax rules. Quin Christian, an accountant with CrowdfundCPA, believes crowdfunding contributions are likely to be considered gifts and shouldn’t be taxable to organizers.
Be aware however that a person cannot write off what they donate to a crowdfunding campaign as a charitable contribution unless the beneficiary is a nonprofit. We suggest you speak to your tax advisor to find out more about the tax implications of organizing or participating in a crowdfunding funeral effort.
Read the story here.