The Indicator from Planet Money

Episode•January 27, 2025•9 min

How GoFundMe can affect your FEMA eligibility

With the LA wildfires still burning, we were left with a lot of questions. Today, we answer two of them: whether GoFundMe campaigns could interfere with receiving federal assistance and how much of those "proceeds" from special product sales actually go to wildfire victims. Related episodes: After the fires (Apple (https://podcasts.apple.com/us/podcast/planet-money/id290783428?i=1000685102673) / Spotify (https://open.spotify.com/episode/4cx4oHRFYZByFxxwms8YpJ?si=1ba6eae7c9d94ddc)) Why is insurance so expensive right now? And more listener questions (Apple (https://podcasts.apple.com/us/podcast/the-indicator-from-planet-money/id1320118593?i=1000652527715) / Spotify (https://open.spotify.com/episode/3Nm65Vg7RbSFxMT7XkBeuC?si=61d7baf146d24e0a)) For sponsor-free episodes of The Indicator from Planet Money, subscribe to Planet Money+ via Apple Podcasts or at plus.npr.org (http://plus.npr.org/). Fact-checking by Sierra Juarez (https://www.npr.org/people/g-s1-26724/sierra-juarez#:~:text=for%20Planet%20Money-,Sierra%20Juarez%20is%20a%20researcher%20and%20fact%20checker%20at%20the,and%20fact%20checking%20in%20Mexico.). Music by Drop Electric (https://dropelectric.bandcamp.com/). Find us: TikTok (https://www.tiktok.com/@planetmoney), Instagram (https://www.instagram.com/planetmoney/), Facebook (https://www.facebook.com/planetmoney), Newsletter (https://www.npr.org/newsletter/money). To manage podcast ad preferences, review the links below: See pcm.adswizz.com (https://pcm.adswizz.com) for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences. Learn more about sponsor message choices: podcastchoices.com/adchoices (https://podcastchoices.com/adchoices) NPR Privacy Policy (https://www.npr.org/about-npr/179878450/privacy-policy)

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Transcript

0:00

Npr.

0:12

This is the Indicator from Planet Money. I'm Waylon Wong here with Darian Woods. Hey, Darian.

0:16

Hey, Waylon.

0:17

So often on the show we do listener questions, but today is kind of a twist on that idea because we actually had our own questions. We have questions and our questions are about the LA wildfires because as we were reading around, there were some curious things that popped up that we wanted to look into.

0:33

Yeah. So for example, victims of the wildfires are understandably going to go fund me to raise money. But warnings are going around that getting donations that way could make you ineligible for federal assistance. We get to the bottom of that

0:47

one and we explore what it means when brands say they're donating proceeds of sales to wildfire relief.

0:53

We will have answers for you and for us after the break. Wildfires are still burning across Southern California. The Palisades, Eaton and other fires have destroyed thousands of homes and displaced at least 100,000 people.

1:12

And this means a lot of people are in need of support. And in these modern times, you see folks turning to GoFundMe.

1:19

Yeah, GoFundMe, the super popular platform being used for medical care for people trying to avoid getting evicted and for disaster relief like the LA wildfires now.

1:31

Yeah, I saw a fundraiser for a 75 year old woman who couldn't afford fire insurance and then lost her whole house. I saw another one for a photographer who lost 10 years worth of work.

1:42

And you see a big range in the success of these campaigns. Some might raise a few hundred dollars, others tens of thousand. But having a GoFundMe fundraiser could make people who post them ineligible for federal assistance.

1:57

Like from fema?

1:58

Yes. I found that federal law puts in these restrictions for fema. That's the Federal Emergency Management Agency. FEMA isn't allowed to duplicate benefits if you get them from somewhere else. FEMA has this video online that explains what this means.

2:14

FEMA may be able to help you to replace a vehicle that was damaged during the disaster. However, if your GoFundMe page clearly states that the funds you're raising will be used to replace your car, FEMA won't be able to provide assistance for that specific need.

2:29

Okay, so you can't fundraise for like home repairs or funeral expenses specifically and then go ask FEMA to cover the same thing.

2:36

Yeah, and so while GoFundMe can be great, you might be surprised at the kinds of resources that FEMA offers. It sends short term assistance like food and a place to stay. It also gives longer term help like grants for home repairs.

2:51

So it can be a big deal if victims of, say, a California wildfire suddenly don't have access to FEMA funds. I've actually seen a lot of social media posts and news articles that warn people about this.

3:03

And to be clear, it's not just GoFundMe that could make somebody ineligible for federal assistance. It's also nonprofit help or insurance payouts, bake sales. Really? Any fundraising?

3:14

I mean, does GoFundMe make it clear that this is a potential issue?

3:18

Yeah. So I made a draft fundraiser in LA to try to find this out. And there is no obvious warning, although there is some language in an FAQ on the GoFundMe website. We reached out to GoFundMe and they referred us to FEMA.

3:34

Okay. So if you're a victim of the California wildfires or any other natural disaster, please be aware of the restrictions that can come with GoFundMe support.

3:44

Exactly. Now, Waylon, onto your question. You were wondering about how brands are providing relief to people affected by the wildfires.

3:51

That's right. If you know one thing about me, Darian, it's that I'm always online shopping. And so, of course I noticed that all these stores have been marketing products related to the wildfires, like earrings with LA Lakers colors or a fleece jacket that features Venice Beach. And these brands are promising to give some percentage of sales to relief efforts, or they're advertising certain products and saying, if you buy these, we'll donate the proceeds to wildfire victims.

4:17

Right. I guess it's a hybrid capitalism, social good kind of event.

4:21

Yeah. And I was curious, what does proceeds or profits even mean? Like how much of each sale actually gets donated? So we reached out to Claire V. It's an LA based company that makes handbags and clothes and it employs over 100 locals. Claire V says it's donating 100% of the proceeds it makes from select products to wildfire relief. Clairvivier is the founder and CEO of Clairvy.

4:46

When we started to see the extent of the devastation in Los Angeles and the extent of the displaced people, we knew that we had to give back. So we came back to work and we just put into work on that day. Los Angeles. Je t' aime. T shirt and hat. And they've been for sale ever since. And we're giving proceeds back to the Red Cross with the earmarked for the California wildfires.

5:15

All right, a T shirt and a hat. Let me just pull this up. I want to see it for myself. Okay. I see a dark blue hat for $60 reading Los Angeles de Tem. And a white shirt with the same phrase and blue lettering for $100.

5:30

Right. And Claire V. Is donating 100% of the proceeds from the sales of these specific products to the Red Cross for Wildfire Relief. We asked her why she went this route.

5:40

We are a fashion company. It is what we do. So we, we. We create things that people wear to make them to express themselves and to make them feel good. So we make. It's part of our collection that we make T shirts and. And baseball hats already with different French sayings on them. And so it made a lot of sense that we would make a product with a French saying, something affectionate for Los Angeles, and we would give back to. To our city.

6:11

Okay, so in this campaign, 100% of proceeds going to the Red Cross for Wildfire relief. As of January 21st, the campaign has raised $145,000 in proceeds.

6:21

Okay, $145,000. That's not bad. But, Waylon, we keep saying the word proceeds, but what does it mean? Is it revenues? Is it profit?

6:30

I know this is like the heart of my question, right? So for Claire V. It's the retail price minus what it's spent on materials and manufacturing. A Clairv spokesperson says the company isn't factoring in design development, marketing, or E commerce processing fees.

6:45

Okay, so for $100 shirt, how much gets donated to the red cross?

6:48

Between 70 and $75, according to a spokesperson. Claire says the company also raised money through a staff closet sale over the weekend. That's where staffers put their own clothes up for sale. And that effort raised another $20,000.

7:03

We're just doing our part. It's. It feels like. Feels like not enough when you're faced with the devastation that this city has been. Has faced.

7:13

Okay, and so is this like a typical sort of arrangement? Have you looked at the breakdown of other companies donations?

7:19

You know, it's really kind of all over the place. I found a haircare brand called Foxy bay that's donating 10% of quote, e commerce profits. And then there's this jewelry company, Pura vida. It's giving 100% of what it calls net profits on a specific bracelet. So for this company, it does subtract expenses like marketing and credit card fees.

7:41

Sounds like you really need to keep up with the fine print to know how much is going to the relief efforts.

7:45

Right. And not all companies provide that kind of fine print on their website. So it's really hard to tell.

7:50

So I guess the most direct way of making sure money actually goes to Wildfire Relief victims is to donate directly.

7:56

Yes, except you want to make sure you're not like overlapping with what the person's getting from fema. As we learned earlier from your segment,

8:03

it's more complicated than we thought to do. Good.

8:07

Well, we did it. I think our questions have been answered, hopefully to our listeners satisfaction too. Thanks for playing Darian, and if you

8:16

have any further questions, Please email us indicatorpr.org this episode was produced by Cooper

8:22

Katz McKim with engineering by Neil Tyvalt. It was fact checked by Sierra Juarez and edited by Paddy Hirsch. Cagan Cannon is our show's editor and the Indicator is a production of N.

How GoFundMe can affect your FEMA eligibility

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