New study shows wealthy wildfire survivors raise more on GoFundMe than their neighbors
New research shows when wildfire survivors start GoFundMe campaigns, wealthy people get more donations than their less affluent neighbors.
The study, which is awaiting peer review, examines the role crowdfunding has to play in recovery from a wildfire.
Tony Cookson, professor of finance at the University of Colorado Boulder, is one of the study’s authors. He said personal experience helped inspire the research. In 2021, the Marshall Fire destroyed more than a thousand homes in a suburban area outside Boulder, coming within two miles of his house. At least a dozen people he knew lost their homes.
“One of the things that we noticed was that virtually every person who lost a home started a GoFundMe,” Cookson said. “Even while the fire was still burning.”
A GoFundMe spokesperson said more than $58 million has been raised on GoFundMe for wildfire relief in the U.S. since 2020.
According to the study by Cookson and his colleagues, around 90% of households whose homes burned down in the Marshall Fire used the platform. Crowdfunding turned out to be far more supportive than the usual disaster aid systems. Survivors received on average 10 times more from GoFundMe campaigns than from the Federal Emergency Management Agency (FEMA).
But Cookson and his colleagues noticed not all campaigns were equally successful.
“One of the things that was very striking to me was just how different the amounts raised were,” Cookson said. “Some people within a week had raised $50,000. Other people raised about $5,000.”
The study found households with a higher socioeconomic status tended to raise significantly more money. The wealthiest survivors in the study raised around 30% more than those in the lowest socioeconomic tier. Similarly, survivors with the best credit scores raised 40% more than their counterparts.
Cookson said there are a number of reasons for the disparity.
Wealthy people tend to have affluent friends who can give more, as well as fundraise on their behalf. And they tend to have more out-of-town connections who didn’t lose homes in the wildfire.
Jen Goodlin is the executive director of the Rebuild Paradise Foundation. She said she doesn’t know if GoFundMe played as large a role in 2018 Camp Fire recovery as it did in the Marshall Fire, but the study’s findings about donors outside of the wildfire’s footprint resonate with her.
When she lost her house in the fire, she was actually living in Colorado.
“I was one of those out of the geographical area of the Camp Fire and I helped my friends here,” Goodlin said.
Around 90% of the housing stock in the town of Paradise was destroyed. In Paradise and outside the area, 18,000 homes were completely lost. Goodlin said the sheer magnitude of the Camp Fire meant fewer survivors had social networks that could afford to significantly donate to their recovery.
“If my parents went through a disaster, I would give them dollars. But if my parents and my brother and my cousin [went through a disaster], now I have to spread out what was my $500 amongst those three families versus just the one.”
Goodlin says there were at least a hundred families impacted by the Camp Fire in her social circle.
According to the study, having a social network that isn’t local and can donate is a kind of insurance against disaster.
“What we're finding is that people who are higher income … tend to have more insurance in this informal insurance account,” Cookson said.
He said as home insurance becomes more unaffordable in the North State and other high wildfire risk areas, people will look more to their social networks after a disaster. He said the study’s findings were replicated in last year’s wildfires on Maui, leading him to believe these class disparities in GoFundMe amounts can be generalized to wildfires in other places, too.
The study confirms those who were already wealthy will have more resources to recover.