Oregon and other nonprofit organizations who were hurt by GoFundMe’s unauthorized fundraising scheme last October can now join a class action lawsuit against the large cyber company being filed by two law firms, including one in Eugene.

As reported by Oregon ArtsWatch on Oct. 23, GoFundMe established fundraising pages without consent or prior notice for 1.4 million nonprofit organizations across the United States and attempted to monetize them for its own financial profits earlier in the month. Among the nonprofit Oregon arts organizations impacted by the scheme were the Portland Art Museum, Portland Center Stage, and Oregon ArtsWatch itself.

The unauthorized pages looked like authorized pages and included such detailed information for the organizations as mission statements, employer identification numbers, logos, and more. Instead of directing all donated funds to the organizations, however, the GoFundMe-established fundraising pages were set up to charge a 2.2% transaction fee and an additional 30-cent per-donation charge that went to GoFundMe.

In addition, GoFundMe also included a 14% to 16.5% “tip” that would be paid by the donors, but that amount would go to GoFundMe and not the nonprofit organizations. There are some indications that GoFundMe used its search engine optimization (SEO) assets to prioritize its fundraising pages over the official ones of the organizations.

The scheme provoked an outcry from many nonprofit organizations and the associations that represent them, including the Nonprofit Association of Oregon. In a Dec. 1 newsletter to members announcing the class action lawsuits, NAO Executive Director Jim White said many Oregon nonprofits were negatively impacted by the scheme.

“We were able to provide specific examples of our members being impacted by having had pages created, not being able to claim their pages, difficulties in having their pages removed, and encountering the dreaded doom loop where they couldn’t even find a way to contact GoFundMe despite following the provided instructions,” White wrote.

The outcry and related media coverage prompted GoFundMe to soon reverse itself and apologize to the nonprofit community. But many problems persisted, including problems claiming the unauthorized pages (the quickest way to solve the problem at the time), disrupted legitimate fundraising efforts and reputation damage caused by inaccurate information on many of the unauthorized websites.

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That has now resulted in the lawsuit announced by White.

“Today, I want to inform you about a class action lawsuit being filed by the law firms of Arnold Gallagher in Eugene, Oregon, and Watts Law Firm in Austin, Texas, against GoFundMe for their predatory practices. If you believe your nonprofit was impacted by this, we suggest that you go to this special site they have created to learn more about the terms of the lawsuit. We know from the many emails and phone calls that we fielded, a good number of your organizations were unfortunately impacted,” White wrote in the Dec. 1 newsletter.

“We hope this type of action will hold big tech companies like GoFundMe accountable and help nonprofits retain trust and respect from community members and their generous donations to our nonprofit sector.”

According to the special site prepared by the law firms, “The anticipated legal action will seek to recover lost revenue to the nonprofit organizations, fees and ‘tips’ charged by GoFundMe to the detriment of the nonprofit organizations, reputational harm to the nonprofit organizations during a time that donor trust is so crucial and damages related to time and resources needing to be expended by the nonprofit organizations responding and dealing with the actions of GoFundMe.”

“We are fighting to protect the integrity of charitable giving and to defend the autonomy of nonprofit organizations. When a for-profit company hijacks donation streams, rewrites nonprofit organizational narratives, and redirects public support without consent, it undermines the very purpose of philanthropy. This is about holding GoFundMe accountable for exploiting trust  and misusing its platform to prioritize its own revenue at the expense of mission-driven work by nonprofit organizations,” it continues.

• The previous Oregon ArtsWatch story on the GoFundMe scheme can be found here.
• The special site created by the two law firms can be found here.