As inflation hits, people turn to crowdfunding to meet basic needs

By:  Vinod Rajasekaran

Prime Minister Justin Trudeau recently announced a $4.6-billion package of income-tested measures to help Canadians cope with steeply rising prices. His government will double for a period of six months a sales tax rebate received by low-income earners, top up a housing benefit for some renters, and fund a dental-care plan for families earning less than $90,000 per year.

On the provincial front, Ontario Premier Doug Ford’s government’s recent throne speech increased the provincial minimum wage to $15.50 an hour and increased payments through the Ontario Disability Support Program by five per cent. The speech highlighted that “as inflation drives the cost of living higher, these actions are helping to blunt the impact on household budgets by putting more money back into Ontarians’ pockets.”

However, none of these measures actually gets to tackling the systemic affordability issues to which all levels of government need to turn their attention.

Canada’s elected officials might be suffering from a lack of perspective on what the affordability crisis looks like up close. Where can they gain that perspective? Reading the stories on crowdfunding platforms. They’d learn a ton.

People around the world who are struggling to make ends meet are turning to crowdfunding platforms for support. On GoFundMe, the world’s largest crowdfunding platform for personal causes, Canada ranks fourth worldwide in terms of the overall number of donations per-capita. . While Canada might be proud of its social safety net, it’s also a country in which personal and family emergencies remain the top and fastest-growing fundraising category on GoFundMe.

Experts say that personal campaigns on GoGetFunding and GoFundMe have significantly increased since the pandemic began. Take a quick browse through these platforms and you’ll see there are people seeking support for rent, food and monthly bills – like a single mother in St. John’s, NL, who has a seven-month old daughter. According to her campaign, she has “two full time jobs but still struggles keeping up with the cost of her diapers and formula on top of rent and bills.”

You’ll see campaigns for seniors who need to move – such as a senior who is a unable to afford rent in Chilliwack, B.C. She expressed her frustration about Canada’s housing crisis: “the crisis has been going on for years with affordable rents vanishing daily. The homeless keep on growing.” In her campaign, she also notes that she is “about to be homeless and destitute.” Reading the breakdown of this woman’s income, I doubt that Finance Minister Freeland’s recently announced plan to increase old age security (OAS) payments by 10 per cent would make a difference.

You’ll see campaigns for international students doing internships in Canada – like a woman from Mexico who moved to Napanee, Ont., but discovered how unaffordable it is to live. She is interested in staying and finishing her veterinary internship but cannot make ends meet.

There are campaigns for people who can no longer pay tuition – like a student in Ottawa who cannot cope with the rise in college tuition, bills and housing costs to finish her third year. She fears that more debt would set her back even more. In her campaign, she shares, “I myself have been able to work only part-time due to my heavy course load this year, and that is barely enough to cover some of our living expenses.”

You’ll see campaigns to buy tools for employment – like a woman in Surrey, B.C., on disability who cannot afford to purchase a laptop, printer and paper to apply for jobs – technologies that have become essential for education and employment these days.

There are loads more. These stories are heartbreaking. Many of them were too difficult for me to read.

But this is the consequence of a so-called progressive country hanging on to an outdated, fragmented and broken social support system that doesn’t listen to lived experiences. These systems were never designed to help people at the margins live flourishing lives.

The failure of our social services and benefits systems – at municipal, provincial and federal levels – to keep up with lived experience is becoming less sustainable by the day. The recent federal and Ontario announcements will do little for the people in the stories I have highlighted, and there are thousands of such stories across Canada.

The fact that people who cannot afford many necessities are turning to GoFundMe and GoGetFunding is a failure at all levels of government. It’s a visible demonstration of how disconnected our municipal, provincial and federal elected officials, and policy-makers, are from lived experience, and how inequitable our social policies and social safety nets are. Anyone in the funding world should pay attention to the stories on crowdfunding platforms right now with the rise in inflation and they’ll have ample evidence on where to direct support.

University of Washington doctoral student Mark Igra’s research on inequality in crowdfunding highlights that nine out of 10 campaigns do not reach their financial goals. The median campaign raises only a few thousand dollars. Indeed, none of the 50 or so stories I read is on track to make their goals, including the ones I have highlighted.

This research underscores the importance of social networks. Crowdfunding campaigns seem to work best for people who have very large social media followings. In an op-ed in Scientific American, Igra notes that “before a worthy crowdfunding campaign can receive a donation, it must first get a donor’s attention, typically via a post on Facebook, Instagram or Twitter.”

However, according to Igra, most of the people seeking funding simply don’t have the time or capability to harness the power of their stories on social media. They’re busy working overtime to make ends meet, caring for sick loved ones, or dealing with any of the other myriad life circumstances that necessitated the crowdfunding campaign in the first place.

Crowdfunding is unlikely to be helpful for people where there are stark income inequalities, social disparities and where social media popularity matters. Igra points out the strong correlation between successful campaigns and strong social networks makes it difficult for many at the margins to meet their fundraising goals.

Meanwhile, it seems like mainstream media celebrate and glorify crowdfunding as a win-win without highlighting the systemic issues and policy failures that drove families to use it in the first place. For example, North Shore News highlighted North Vancouver as the most generous Canadian city in 2021 as named by GoFundMe. But context matters here. Vancouver has the most expensive housing market in North America.

Generosity is good but it cannot be the answer to a broken social benefits system. University of Toronto researcher Caroline Shenaz Hossein states: “We can often glorify forms of mutual aid, but that lets big philanthropy and government off the hook.”

If Canada’s social policies and benefits system are once again failing to help people live flourishing lives, what can be done? Here’s where I’d start: Every personal crowdfunding campaign reveals a story, a systemic issue and an insight into which social support services, policies, benefits and funding are letting people fall through the cracks. These stories are evidence that multiple levels of government policy-making aren’t working.

Non-profits are feeling the pinch of inflation as well. The Winnipeg Free Press reported recently that families struggling to buy now-unaffordable necessities are straining non-profits’ dwindling resources. Mareike Brunelli, at the West Central Women’s Resource Centre of Winnipeg, said families on fixed incomes are increasingly forced to make tough decisions about how to spend. At the centre, “we are really short on tampons and pads, which has never been the case.”

In 2021, GoFundMe’s CEO Tim Cadogan told the U.S. Congress: “We can’t do your job for you.” Yet, in the U.S. and in Canada, COVID-related support programs have recently ended. This is an opportunity for municipal, provincial and federal governments as well as civil society organizations to reimagine care and benefits, policies and systems. It’s time to stop the dehumanizing and disempowering practice of crowdfunding basic needs.

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