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    4 Risks of Relying on Crowdfunding to Cover Final Expenses

    Friends and loved ones have always come together to offer support to grieving families. When my dad passed away in 2017, people came by for weeks with dinners or to help my mom look after my sister.

    We held his Life Celebration at my parent’s house and people showed up to decorate, set up projectors, and string lights. Somehow, a few dozen chairs were ordered and arranged. In my grief, all the planning and arrangements were a blur, but others stepped in to set up a lovely ceremony.  

    My dad’s friends also pitched in for a special cremation urn. My mom’s co-workers pooled money to buy her a laptop while she worked from home for a while. In short, people came together with love and support.

    Luckily, my dad’s life insurance policy covered most of his final expenses (which, even with a basic cremation, were not insignificant). However, if these expenses had not been taken care of, my family probably would have turned to crowdfunding.

    Many Americans are increasingly relying on this option to help raise money for funeral and memorial costs. According to the New York Times, “GoFundMe, one of the largest fund-raising sites, says 13% of its campaigns created in 2017 were described as memorials, which include funerals and are one of the company’s fastest-growing categories.

    That follows a 2015 study by the Funeral and Memorial Information Council, which reported that 17% of adults aged 20 to 39 had used the internet to solicit or donate money for funeral-related arrangements.”

    How Much Do Final Expenses Typically Cost?

    According to the 2021 National Funeral Directors Association (NFDA), the median cost of a funeral with burial and viewing is $8,805. For a funeral with cremation services and viewing, the median cost is $6,515. These amounts do not factor in items like grave markers, flowers, a casket, or cemetery costs.

    The Rise of Crowdfunding for Final Expenses

    In recent years, several crowdfunding sites explicitly dedicated to funeral and memorial costs have gone live, including FuneralFund and Ever Loved. In 2018, GoFundMe acquired YouCaring, another popular charitable fund-raising site that serves the bereaved. These crowdfunding campaigns rely heavily on social media to extend their reach.

    4 Risks of Relying on Crowdfunding to Cover Final Expenses

    1.  Not Reaching Your Fundraising Goal

    While many of us can expect friends and loved ones to come together with financial support during times of crisis, we can’t always anticipate how much support will come in. Relying on crowdfunding is risky because the overwhelming majority of crowdfunding campaigns do not reach their fundraising goal.

    Forbes recently reported on a study published in the American Journal of Public Health that found that less than 12% of medical crowdfunding campaigns launched between 2016-2020 reached their goals. That is clearly not a good statistic.  

    2.  Paying Fees and Adhering to Stipulations

    Some crowdfunding companies also charge fees for their services ranging from 4-8%. Others have “all or nothing” stipulations in which you won’t receive any funds unless and until you meet 100% of your fundraising goal.

    3.  Running into Timing Conflicts

    Most American funerals take place one week or less from a person’s death. Some religious traditions have proscribed timelines for burials. For example, Jewish religious law maintains that the deceased must be buried within 48 hours of death.

    When a loved one dies unexpectedly, funeral funds often need to be collected on a short timeline. Crowdfunding campaigns often take place over the course of weeks or a month, which means families have to come up with other ways to pay for a funeral upfront.

    4.  Not Having the Emotional Bandwidth to Run a Fundraising Campaign

    Unless you’re already savvy at social media or organizing fundraisers, setting up, monitoring, and optimizing a crowdfunding campaign can be a complex process, especially for a person dealing with the mental fog that comes with grief.

    Having Life Insurance in Place to Cover Final Expenses Brings Peace of Mind

    While crowdfunding funeral expenses has mixed results, one way to guarantee your loved ones won’t need to find creative ways to cover your final expenses—or the burden of outstanding loans and mortgages—is to invest in life insurance.

    It’s advisable to make sure you have enough coverage not only to cover funeral and burial costs but also to cover the balance of any outstanding debt and to provide funds needed to help secure a sustainable lifestyle for those you love.

    You don't have to worry about whether last-minute fundraising efforts will succeed when you plan ahead with life insurance.

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    Amanda Harr

    A graduate of the Plan II Honors program at UT Austin, Amanda Harr is the Content Manager for SWBC. A clever wordsmith who appreciates artful persuasion and authenticity in writing, Amanda uses a structured creative process to craft marketing strategies, develop communications solutions, and deliver top-notch content.

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