Goldstein Investigation: Some Charities That Use GoFundMe Skirting The Law
LOS ANGELES (CBSLA) — David Goldstein investigates people collecting donations online through websites like GoFundMe. Where is all that money going?
One man has collected tens of thousands of dollars in donations through GoFundMe and says online that he runs a registered charity. But is it?
In 2015, Elvis Summers made the news when he was building tiny houses for some of Los Angeles's homeless population. According to reports, he built around 40 -- only to have the city remove them from the streets because of health and safety risks.
Summers used the crowdfunding site GoFundMe to raise money. His first GoFundMe campaign back then showed he took in more than $98,000.
And Summers had four other fundraising campaigns on GoFundMe. The total raised so far -- more than $146,000.
His current GoFundMe campaign is raising money in conjunction with a school in Castaic to build a tiny house for a veteran.
On the GoFundMe page it says the school has partnered up with Summers' non-profit called Starting Human. And there's a link to the website. Starting Human's website says it's a registered charity. But we found it's not.
According to the IRS, Starting Human's non-profit status was revoked in October of last year for not filing a form 990 -- which is a tax return. He didn't file for three consecutive years.
And in 2015 the California attorney general's office notified Starting Human that it had to register as a charity in order to solicit money in California. It never did. And according to the state that's against the law.
Regina Birdsell, who's the president of a non-profit consulting firm in LA, says paperwork should be a priority.
"It's really essential for non-profit organizations to take the time to file the paperwork every year so that donors know that the money that they are giving is going to the cause they talked about, they care about, they want to help address," said Birdsell.
"I've got receipts for everything," said Summers.
Summers said that all the money he took in was spent on helping the homeless. And we have no evidence to dispute that.
Hours after we spoke with him, the claim that Starting Human is a registered charity disappeared from the organization's website.
And Starting Human isn't the only organization we found that claims it's a charity and is raising money on GoFundMe but is not properly registered in California.
We discovered twenty other Southern California charities on GoFundMe that are out of compliance with state regulations. That means according to state law they can't legally collect donations.
Some of those are even listed as certified charities by GoFundMe.
Statement from GoFundMe:
"GoFundMe offers many different ways for people to fundraise online whether its an individual raising money for a specific need or a charity raising money for their cause. For those looking to donate to, or start a campaign for a charity, we recommend GoFundMe certified charity campaigns which we partner with PayPal giving fund to deliver donations.
We always encourage people to fully research whatever it is they are raising money for and to be absolutely transparent on their GoFundMe page, so donors can make an informed decision on what they're donating to. That said, GoFundMe is an open platform and ultimately it is up to the GoFundMe community to decide which campaigns to donate to.
GoFundMe terms of service requires that all campaign organizers certify they are in compliance with all applicable laws. That said, if we become aware that they aren't in compliance, we investigate and take appropriate action.
Our trust & safety team is working around the clock to ensure the safety and protection of our community. We have policies and processes in place to make sure we are the most trusted social fundraising platform. In addition to technical tools and a dedicated team of experts, we have a community of over 50 million users – when they see something they think might not be right, they tell us, and we look into it.
The industry's first and only refund policy, GoFundMe guarantee, ensures the funds raised by GoFundMe campaigns go the intended recipient. In the rare case misuse is detected, we'll refund donors."