For Restaurants, GoFundMe Proves a Not-Quick-Enough Fix

April 23, 2020 Admin 0 Comments

The crowdfunding platform’s unexpected delays in paying out are leaving some restaurant staffs in the lurch

When restaurants and bars across the United States were forced to close their doors in March in the wake of COVID-19’s rapid spread, most service industry workers were stripped of their income and left to wonder how they would pay for groceries, rent, and bills, and in many cases, provide for their families. Some turned to unemployment benefits and government assistance, but it would be weeks before they saw any money, if they would at all. Even as many restaurants introduced pickup and delivery options, it was not enough to keep every staff member employed, let alone sufficiently paid. So, with no other options in sight, the dining and hospitality community turned to GoFundMe, where they were able to create fundraisers for their staffers and promote the pages with their friends, family, and patrons.

GoFundMe, a popular crowdfunding site known for its grassroots nature, offered the promise of desperately needed monetary support for these institutions in the midst of unprecedented economic setbacks. Within days of states ordering nonessential workers to stay home, GoFundMe campaigns for restaurant employees filled every corner of the internet and social media. But as these fundraisers collectively raised millions of dollars for the industry, many campaign holders have experienced unexpected complications with the GoFundMe platform. From difficulty accessing and withdrawing funds and issues contacting the site’s customer support to utter confusion around transaction fees, these seemingly small bumps in the road have proven to be big problems, keeping some staffers from financial relief even as the money they need sits behind GoFundMe’s walls.

“Trying to withdraw our funds has been the point of contention for me,” says Candace Horan, the lead bartender at Mastro’s Ocean Club in Boston and organizer of the restaurant’s GoFundMe. After debuting on March 28 with the goal of raising $50,000 for Mastro’s 80 staff members, the campaign has seen more than $50,000 in donations, but that money has yet to actually reach its beneficiaries. Horan has tried to withdraw the funds on several occasions, but is consistently met with a message saying withdrawals from her campaign are on hold while GoFundMe reviews the fundraiser, but that the page would remain live and open to donations.

When starting a campaign on the platform, users must certify that they meet the requirements for their country, which in the United States includes being 18 years of age or older and having a U.S. Social Security or Individual Taxpayer Identification number, a residential address within the 50 states, a U.S. phone number, and a U.S. bank account in the same name. Although these are the only criteria needed to run a campaign and theoretically withdraw its funds, GoFundMe does note that if its payment processor can’t verify this information manually, it may ask for additional documentation, including a copy of a government-issued photo ID and a bank statement. Nonetheless, many campaigns are facing continued difficulties accessing their funds.

“I have emailed support three times, I have gone through every single article and message board there is, and I went through the site’s guidelines to make sure the story and language on the campaign and my account details all follow them,” Horan says. “All of my settings seem to be appropriate, and I haven’t been asked for any additional information or documentation, even though some of the articles said I might be, so I really don’t know what to do at this point.”

After her GoFundMe for employees of Mistral and Elements in Princeton, New Jersey, met its initial $20,000 goal, organizer Beth Rota spent two weeks trying to verify her identity before she was finally able to withdraw the funds and distribute them to staff members. “I wanted to be able to get funds to them before rent was due on the first of April, but the funding didn’t hit my account until April 2,” she says. Rota was able to send funds to employees in the five days that followed, using Zelle, cash, and personal checks, but despite the trouble it caused, she understood why GoFundMe went to such lengths. “I was glad the verification process was difficult because it reduced the potential for fraud.”

GoFundMe’s protocol, in fact, is to place a hold on any high-volume campaign or fundraiser for which the organizer is not also the beneficiary. The site asks users to be clear and specific in their fundraiser descriptions about who is withdrawing the money, how that person is related to the beneficiary, and how the money will be transferred to that party or used on their behalf. But since most restaurant staff relief funds have multiple beneficiaries, many have been subjected to increased scrutiny and additional verification. “If there are issues regarding a fundraiser, we reach out proactively to gather more details,” a representative of GoFundMe explains. “For example, if it’s not clear where funds are going, if financial information doesn’t match the documentation provided, or if the fundraiser is against our terms of service, our team sends out communication to clarify. Our goal is to always protect our community and get them the help they need as soon as possible.”

Matters are even more complicated for fundraisers that seek to help service workers across entire cities. When Felix Bendersky, the owner of F+B Hospitality Leasing in Miami, noticed how badly many of his clients were being hit by the coronavirus pandemic, he decided to team up with five notable chefs from the area to start a GoFundMe page for restaurant employees citywide. The Miami Restaurant Employee Relief Fund has raised over $97,000, almost a third of its $305,000 goal, but it wasn’t until 16 days after the campaign’s March 18 launch that the money was actually accessible. Knowing how urgently Miami workers needed monetary support, Bendersky decided to put $40,000 of his own money toward the efforts, sending funds directly to restaurant employees who’d applied for the $250 grants while the GoFundMe donations remained on hold. This move saved beneficiaries the trouble of waiting for the funds to be released, but other citywide campaigns haven’t been so lucky.

Since going live on March 16, Gabby Bonfiglio’s Boston-wide GoFundMe has raised $25,000 for over 500 service workers, many of who are undocumented, but the platform froze withdrawals for more than two weeks while it verified identities and distribution methods. “I understand that it’s necessary for them to take every precaution because there is so much money being handled here and there are unfortunately people who will try to scam the system,” she says. “But when you’re just trying to fundraise with good intentions, it’s incredibly frustrating.”

Bonfiglio had to send GoFundMe’s Trust & Safety team a host of information, including the Google form restaurant employees used to apply for funds and the spreadsheet she’d compiled of their data. Then, she had to sign an attestation form — which listed their name, their fund, and beneficiaries — confirming what she intended to do with the money. “There were certainly a few things we could have done earlier, but the thing we were waiting on the most was communication from GoFundMe support,” she says. “It was a few days between each email. It’s totally understandable because they’re handling so many cases right now, but we were kind of at their mercy as far as the timeline went.”

Although GoFundMe notably stopped charging for the use of its platform in 2017, there remain other fees, which have some users bewildered and annoyed. When Rota went to personally donate $100 to her fundraiser for the Mistral and Elements staff, she was prompted with an option to tip, with choices of 10 percent, 15 percent, 20 percent, and “other.” GoFundMe notes that any such tip helps support their service, but that hasn’t stopped some donors from thinking it was benefiting the cause. “I had one donor send me an angry email saying it was ‘bold and rude’ of me to ask a donor for a tip, as if I had set it up that way,” Rota recalls. She personally declined to leave a tip on her donation, but says it was unclear that it was even optional. “I just hope other donors did not get confused and offended and ultimately end up not donating as a result.”

The one fee that GoFundMe does require is for processing transactions, which goes entirely to its payment processor, and it consists of 2.9 percent and a 30-cent fee on each donation. A credit card transaction fee is familiar to anyone in the hospitality business, as it’s industry standard, and while it’s by no means a surprise when that money is pulled from donations upon withdrawal, it can still have a significant impact on the campaign. “It was a little frustrating because it amounted to about $1,000 total, and when we’re distributing funds among so many workers, that makes a big difference,” says Bonfiglio. “We did plan for that, but that $1,000 could have supported five to 10 families who needed it.”

Despite the troubling realities of GoFundMe that so many restaurant funds now face, the tone remains one of great understanding. “I do think the fees are worth it,” says Miami’s Bendersky. “My biggest concern was just getting money to people quickly, but everything kind of worked out in the end, and it’s just been awesome.”

GoFundMe continues to cite the balance of speed and safety as its top priority and has put forth additional guidance during this time to thwart any confusion. “In this unprecedented global crisis, our team is working tirelessly to support the GoFundMe community during these difficult times, and we have dedicated teams working around the clock to help people throughout the fundraising process,” the site’s spokesperson says. Indeed, fundraisers have been created on the platform to benefit a long list of causes in the wake of the coronavirus pandemic, and as of the end of March, more than $120 million was raised for people, organizations, and businesses affected by the COVID-19 outbreak.

Above all, many users seem to recognize that the platform’s lengthy verification process is one that is ultimately necessary, preventing both them and their donors from any malfeasance, and that its transaction fees are to be expected. “I think it’s important to realize how many people there are helping others right now,” says Mastro’s Horan. “So, whether we run into problems or not, it’s great that there are platforms like GoFundMe to help us do that.”

Gabby Shacknai is a New York-based writer, who covers all things food, travel, and lifestyle.