The Rob Ford “Crackstarter Fund” Reached Its Goal: What Now?

Posted on May 28, 2013 and updated May 28, 2013 in Life Insurance Canada News 7 min read
rob ford 1 jpg size xxlarge promo
Now that Gawker’s campaign
has reached its goal,
what happens now?

Last night Gawker’s “Crackstarter Fund” reached its $200,000 goal (with a little extra to cover Indiegogo’s 4% fee for hosting the campaign and to pay for the taxes), so now the question becomes, will the owner of the tape come forward and will Gawker be able to complete the sale?

Plus, if they can’t obtain the video, what charity will end up receiving a $200,0000 cash injection and why?

If you go back to the beginning of the campaign, Gawker announced on day one that they would be donating the proceeds to a Canadian non-profit charity if they couldn’t procure the tape. The decision was rather arbitrary, with no discussion about perhaps refunding people’s money. After all, the original goal was to buy the tape. If that couldn’t be done, isn’t the original contract null and void?

Not so fast, says Edward Keenan, senior editor at The Grind. Not only does he emphasize that the charity plan was in place from day one, both on Gawker’s website and on the Indiegogo campaign page, so anyone who donated should’ve been well aware of where their money was going if the sale couldn’t be finalized, but he also guesses that it is very difficult to return money to the donors once the funding goal has been reached.

“Especially since most donors are anonymous, and the contact and banking information will never be made available to Gawker,” he  speculates. “And because I guess a pledge to return money would decrease flexibility of looking for the guys, waiting a while to see if they surface, etc.”

But there is certainly a feeling out there from some that the money should be given back. “But  but that would be wrong, no? All these people “paid” for the video,” pointed out one man, while someone else complained, “Everyone will get their money back! gift my ass. Gawker is worse than Ford is.”

But, given the difficulty Keenan thinks there is in actually finding the donors to give the money back, how it might force the tape owners deeper underground if Gawker forces the issue and the fact that the donors all basically agreed to Gawker’s terms by donating, it looks like charity is definitely going to be the second option. Though, not everyone agrees on which charity should get the money. Some are for  the Centre for Addiction and Mental Health, Toronto’s largest substance abuse non-profit, while others would rather see it go to a smaller charity that doesn’t get as much money or attention:

“Hopefully it doesn’t go to CAMH. They get a lot of funding already and wait times are very long. There are a lot of smaller, less known agencies doing the same thing but with less subsidies. It would be great for them to get a 200,000.00 injection,” said one woman.

For his part, Gawker editor John Cook has not responded to e-mails from us regarding who gets the possible charitable donation tax deduction, nor has he responded to inquiries from the media asking which charity Gawker may have picked. The charitable organizations around Toronto, and the possible candidates for the money, have said they may not want the money at all.

“We appreciate donations, but it has to come from a good source, not something like this,” Shirley Carmody, executive director of the Toronto-based Oasis Addiction Recovery Society told The Globe and Mail yesterday. “I feel that we really don’t want any part of it.”

 Carmody also told the outlet, “it’s unlikely the society would accept the donation, in part because the funds are indirectly associated with a video that ‘may or may not show the mayor doing something’ but also because the money would be “better off” with a group that helps active addicts, not those in recovery.”

The Globe contacted other charitable organizations, and many said they would not answer hypothetical questions and their boards would have to deliberate about accepting crowd funded money related to Ford’s alleged crack cocaine use.

“A situation like this has never come up before, in terms of the source of the money,” Michael Torres, a CAMH spokesman, told the Globe. “There are certain standards that the foundation has and they would have to discuss those.”

“I can’t speak for the board as to whether … they would be comfortable taking some of that money,” Julie Bowles, Bellwood Health services’ manager of business development also told them. “If it were to be a difficult decision, it’d be around how the money came about.”

The Salvation Army meanwhile, said they would accept the money as long as it was legally obtained, which it was. Toronto-based charity Lawyer Mark Blumberg told the Globe that because the donors were explicitly told by Gawker where the money may go from the beginning, there should be no legal issues.

“It would be Gawker essentially acting as a third-party fundraiser,” Mr. Blumberg said. “It’s not really a donation from Gawker, it’s a donation from all those people who gave the donation. As long as they were told that the money could go to something else, I don’t see it being a problem.”

Unlike Kickstarter, which only allows money to be given to creative projects, Indiegogo (where the campaign is based) allows for donations to be raised for charitable organizations. Ironically, had the campaign designated itself with Indiegogo’s “Verified Nonprofit Campaign” badge Indiegogo would’ve been able to issue charitable receipts for tax purposes to each of the donors on Gawker’s behalf.

“Most contributions are not tax-deductible,” says the Indiegogo FAQ. “Campaigns may offer tax deductions on contributions only if they are marked with a “Verified Nonprofit Campaign” badge. For more information on how to set up your campaign to offer tax deductions, see our article: How to Raise Funds for a 501(c)(3) Nonprofit.”

Due to the fact that the Crackstarter Campaign is originally supposed to be a buy-sell agreement to acquire the video, the campaign does not have that badge, so the funds are not tax-deductable. Like we said in our previous article on this topic, it would be up to whichever charity that excepts the possible donation to decide whether they would like to issue tax-receipts to each of the donors in this specific case.

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