Crowdfunding Conundrum
I really hated having to write about this subject… I really didn’t have to, but I did and I didn’t like it.
I am writing this preface after the fact, after many edits and touch ups because I feel it necessary to add some context, up front, to this post. I understand that occasionally the content of this subject is something that is necessary, because not everyone is provided the services we offer in this industry, and some people literally can’t buy them, or would not be accepted into, so perhaps they have no other choices because they lack advice, knowledge or ability.
The industry has done a terrible job ensuring this isn’t the case, but that is an opinion to share in another post.
This post is about crowdfunding, not to raise money for some new tech idea, game, art project, or widget of some form or another. This is about crowdfunding, or begging the community for financial assistance when accident, illness or death preys upon the unprepared.
You have no doubt seen numerous posts from around various social media outlets asking to donate to crowdfunding pages set up for people who have died or become ill and have left the family in a state of financial ruin. I have seen pages where people are sourcing capital for illness they can’t afford to pay the costs of (mostly travel and accommodation issues). And regularly, probably weekly I would say, see posts from grieving family members earnestly searching for capital to help out widows, widowers and orphans.
At its core this is honorable, but it causes me to pause…
What are we doing?
Behind me sits a drawer full of solutions to the problems these crowdfunding accounts are trying to solve.
The drawer of course is metaphorical, nearly everything is digital, but the solutions are very real. The solutions come in the various forms of life and accident & sickness insurance available to people all over the world.
Over and over and over, day by day, week, month & year we see more and more people turning to the community for financial support after—AFTER death and illness strike at inopportune times.
Crowdfunding is not the answer. Not for the vast majority of people, certainly not in Canada.
It is inefficient, it is impersonal, and it may be taxable. (CRA is playing it vague at the moment; think the libs will turn a blind eye? I don’t. I don’t think cons will either.)
Do you know what is the opposite of these issues? Life insurance, Critical Illness Insurance, Disability Insurance, Long Term Care Insurance.
They will all pay you a predetermined tax free, efficient and personalized amount that can take care of your financial concerns at death, during illness or injury that takes you away from work or your family, and potential for a life time of care provided in home or in a facility.
Why do we turn away from these ideas?
Why do we continue to live on the edge and burden our families and communities in their time of distress?
Why is it that I am sitting here—you are too, consistently reading about another husband, wife, brother, sister, mother, father, cousin, aunt, uncle, and or child that has died or become ill and this is plastered all over social media for everyone to look at? This is not the sort of tragedy anyone wants advertised, is it?
Unfortunately many people choose to ignore life and health insurance for numerous reasons, but every time I see one of these campaigns I can’t help but ask myself:
“Why didn’t this person have insurance, and if they did, why didn’t they have more?”
Probably because it isn’t free. It is another premium “robbing” you of your vacation high, and/ or vices, hobbies, activities, thoughts of frivolous spending, etc.
It is money headed towards something you would prefer not to think about.
Also likely: lack of good advice from their advisor, if they have one. I can’t count the amount of times insurance advisors in Canada have proudly stood and proclaimed any number of excuses why they don’t market these accident & sickness products.
I can go on and on about how to best use your insurance payment(s) to provide income and stability for the long term, and perhaps in a future post I will, but in this case I think it is more than enough to point out that if you are insurable you ought to be insured the maximum amount you can reasonably afford.
This is harsh, I will take some flack for saying this but; if you are able and you don’t provide insurance for yourself and your family, Do you care about your loved ones?
It is true that some people are un-insurable, for many reasons. Many of these people desperately wish they could have insurance, and I applaud that. For you, we have other concepts that can potentially help ensure financial stability in the event of death and disease.
It is also true that many of you have not been advised on these concepts, and that is not your fault. I have always said: “how can you have a solution to a question you don’t know exists, much less how to ask?”
To be fair and balanced, I should point out that many people turn to crowdfunding for things that would not pay out an insurance benefit, and for those cases I would not have an opinion one way or another if they choose to go to the community at large to raise money to help pay for bills, treatments or trips.
That is literally not my business.
For the rest of us however, there is no excuse to burden your family or your friends with setting up a crowdfunding page to help support them. Most people will not raise enough to provide a proper and respectful funeral, many won’t raise enough to keep the heat on for a few months.
The average GoFundMe campaign raises $1,500, guess who takes a percentage as a fee? -- a premium if you will? (Note: I have read this amount from many sources but have never seen the actual numbers cited, and I have yet to find GoFundMe’s annual financials to back it)
Just because someone is asking for far more, does not mean they will receive it.
Note: not to be cheeky, but people have donated over $25,000,000 to help build a wall, do you think they have money for you? (I refuse to link to this) That said, people all over the world also donated over $15,000,000 to the GoFundMe for the Humboldt Broncos tragedy, and over $22,000,000 to the legal defense fund for the Times Up movement and hundreds, probably thousands of other people and organizations. The fact though: the bigger the tragedy, the more capital is raised. Is it a risk worth taking leaving your family with this as the only action they can take?
I am making an emotional plea; I understand this is not professional.
However, Insurance is my business, and I refuse to sit idly by and say or do nothing.
Furthermore, as a person who has paid death claims to widows, widowers and orphans, I understand the massive difference it makes when you are the only person showing up with financial assistance instead of a bill.
It means a lot. It makes a massive difference.
You can’t, unless you have done it, understand the feeling of delivering a six or seven figure cheque to a widow/ widower/ orphan where she or he doesn’t have to concern themselves with tax implications or anything else financially; of handing off a lump sum Critical Illness payment, free and clear of any tax to someone who has just suffered a catastrophic illness they may or may not live through, giving them financial stability or the ability to pay for treatments even if it means extending their lives just a little longer.
Even just a small amount, say $10-20,000 can mean more than words or emotions can express.
I have done these things, I have seen the slightest lifting of grief and overwhelming relief. Ironically, words can’t actually describe what it means.
I have seen to fruition, long term plans that frankly no person alive wishes to see executed, but that one day, no matter who you are will come to pass.
Insurance isn’t just a bill. Insurance saves lives and builds futures.
Don’t believe me?
Next time you see a new crowdfunding page pop up for this purpose, ask yourself if they wish they had insurance.
I bet they do.
This is cold, I know.
Dad and I will not apologize for being crass. We will continue to do our job and insure people to ensure that some crowdfunding site doesn’t take their cut, so that a widow doesn’t have to pay tax, so that orphans don’t go hungry.
So that heat stays on.
So that the roof stays intact.
So that school is paid for.
So that families can stay together.
So that lives could be extended.
So that the energy from stress and sorrow can be properly expended on the process of emotional and mental healing and not financial misery.
I am a dually licensed Financial Advisor with license to market Life & Health Insurance products, Annuity based investment products, and certain exemption based securities. I will help you plan for your future, even long after you are gone.
This is my business.
I hope to see you soon.
Darris Cameron,
President & COO, Financial Value Inc.
