How To Fund Funeral Through Crowdsourcing

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Saying goodbye to a loved one often comes with a high price tag. Between a funeral home, cemetery, cremations and church expenses, one can easily spend $7,000 or more.

For those who need help covering the funeral expenses, more and more people are turning to crowdsourcing sites to raise money. Crowdfunding sites allow people to seek donations online for different causes and are usually promoted through social media. By seeking support from your friends and extended family during this difficult time through crowdfunding, it could allow you to raise more funds at a faster rate.  

While it is not required for one to specify how the funds will be used, it is generally a good rule of thumb to give donors some sense of value for their contributions. This could mean listing generally how the funds will be allocated. Some common crowdsourcing donations can be used for:

  • Funeral or memorial service expenses
  • Unpaid balances from medical or other death expenses
  • Immediate funds to support the family
  • College funds for surviving children
  • Your loved one’s favorite charity
  • Scholarship fund in memory of your loved one
  • Memorial or tribute like a tree planting, plaque or bench

How Crowdsourcing Works

While the concept of pre-planning a funeral is becoming more popular, especially among baby boomers, there are still many families who struggle to cover funeral costs when a loved one dies. This is even more prominent when the death occurs suddenly and unexpectedly.

Creating a campaign through a crowdsourcing site for funeral or memorial service expenses works the same way as any other project you would set up. First you sign up, establish your campaign and set a goal. You then share it via social media and email with family, friends, coworkers and everyone else in your networks.

Depending on the site you use, you may have the option of cashing out the money while the fundraising campaign is still active. With this option, you can pay for your funeral expenses right away instead of waiting until you hit your goal or when the campaign has ended. Funds are typically transferred via direct deposit, check or in some cases, a pre-paid debit card.

There are two types of crowdsourcing campaigns you can set up to raise money for a funeral or memorial service, depending which service you are using:

  •   All or nothing: This campaign format requires you to reach your goal in order to receive the funds raised. If you do not meet the goal, the money raised will be returned to the donors.
  •   Flexible funding: With this plan, you still set a goal, but if it is not met, you can still receive whatever funds were donated. However, there may be a higher fee associated with this type of campaign depending which crowdsourcing site you use.

Crowdsourcing Costs

There are typically no upfront costs to create or monitor a crowdsourcing campaign for funeral expenses. There are, however, fees paid by either the donating party when they pay or a by the administrator of the account at the end of the campaign.

The fees are broken down into two categories:

  • Payment processing fee: This is anywhere from 2.9 percent and 3.5 percent, and it goes right to the payment processing company, such as PayPal, to process the payment. This is similar to the credit card fee that businesses pay.
  • Platform fee: This is usually between 2 percent and 7 percent, and goes to the crowdsourcing company for their operating costs.

List of Crowdsourcing Sites

The following is a list of crowdsourcing websites and their fees that can be used for raising funds for funerals and memorial services:

  •  GoFundMe: As one of the most popular personal fundraising site, it offers more personalization and several different models to choose from. This crowdsourcing platform charges a 5 percent platform fee, a 3 percent processing fee and 30 cents from each donation made in the United States. Internationally, the fees are from 6.9 percent to 7.9 percent, and charities pay a platform fee of 5 percent.
  •  IndieGoGo: This is a good site if you need to do some personal fundraising such as a funeral or memorial service. The platform charges 5 percent platform fee, and third-party processors also charge a fee.
  • Kickstarter: This is the largest crowdsourcing website with more than 13 million visitors a month. The site collects a 5 percent fee for campaigns that are fully funded. The payment processor company charges between 3 percent and 5 percent for transactions.
  • YouCaring: This website focuses on compassionate causes, such as funerals and memorials. While this site does not charge for the campaign, there is 3 percent third-party fee plus 30 cents per donation.

Start Your Funeral Planning Now

Crowdsourcing is a great way to help pay for funeral expenses if you need the extra funds to do so. However, if you need help planning a service, experts at Grace can help you plan any type of burial or cremation you want.

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