How is Crowdfunding Changing the Death Care Industry?

Tuesday, January 30, 2018

If any of you are on Facebook, it's pretty likely you have come across a post - either by a friend directly or shared into your social network from someone you don't know - asking for money. Maybe its a Kickstarter campaign for a new product, an IndieGoGo campaign for a new documentary, a GoFundMe for a missionary trip abroad, or a YouCaring link to donate to a costly medical procedure. Over the years the number of platforms and amount of money generated by online crowdfunding has steadily risen, the so-called "marketplace of compassion." And it is often for very good reasons, like being unable to get traditional funding for an extremely great idea, or dealing with the financial burden of an unexpected accident. In 2011, GoFundMe and YouCaring were generating $837 million in revenue. Three years later, that number increased to $9.5 billion. NFL player J.J. Watt's Houston hurricane relief fund on YouCaring started with a goal of $200,000, and has since raised over $37 million.

My brother was recently speaking with a cemeterian about the phenomenon of funeral crowdfunding specifically.  Funeral funds are a fast growing sector. From Time magazine - "GoFundMe has raised $340 million for 113,000 funeral and burial funds since its inception in 2010, an average of $3,000 per campaign. According to GiveForward, one in five fundraisers on its site are for funerals, and they're growing at twice the rate of other causes." Platforms like YouCaring and GoFundMe leverage a person's social network - which can be much larger than their direct connections, as friends of friends of friends start to get involved - for financial support when traditional avenues are unavailable. In a recent Mother Jones article, author Stephen Marche situates crowdfunding historically and connect these campaigns to economic inequality and rising health care costs. The author calls back to the way charity functioned in the 20th century, where social organizations like fraternal societies and member's clubs would chip in money to cover funeral costs, for example. Later on, after the New Deal and with Medicare and Medicaid, the state and federal government played a more active role in these kinds of social services.

Life insurance is a necessity, but also a luxury that many cannot afford. Policies can include end-of-life coverage, on average $10,000, and there are a number of calculations involved to arrive at the number right for you and your family. And some life insurance policy holders can be ineligible for funeral coverage based on factors like health and age. Funeral insurance is a variation of life insurance, and explicitly covers funeral expenses often without a required medical examination. Many funeral homes and cemeteries opt for pursuing a preneed sales strategy. Many articles that cover funeral expenses often rely on a simple claim that funerals are "too expensive," and while I am certainly biased, I do not think that gets to the heart of the issue.

For most Americans, money is always already tight, and the last thing on their minds, let alone in their budget, is an unexpected passing or medical condition. It was reported in 2016 that almost 50% of Americans didn't have $400 available in savings in case of an emergency. One thing I don't know, and I would be curious to learn more about from funeral professionals, is how the financials of a crowdfunded funeral play out for their cemeteries or funeral homes. For these crowdfunding platforms, there is clearly money to be made, and they often capture it in fees on each donation, or a lump sum collected at the end. YouCaring, in trying to compete with GoFundMe, has waived fees to attract more customers. All of this combines to create a relatively new, but massive, market, and one that is clearly starting to intersect more often with death care.

If someone dies and a family cannot afford a funeral, or can't be found, what happens to the unclaimed body? Across the country, there has been a reported increase in of unclaimed bodies going unclaimed simply because the families cannot afford to pay for a funeral, and, related, a rise in body donations to medical schools. While researching more about this topic, a bulk of the stories I came across were from the U.K. A recent BBC article reported a 331% rise in crowd funded funerals from 2015 to 2016 (on the platform JustGiving. Like in the United States, if no one claims the deceased, the local government is required to provide a "public health funeral", usually entailing transport, a casket, cremation, and interment. In 2013, those funerals cost councils in the U.K. over $2 million.

In the U.S., regulations for the final disposition of unclaimed bodies vary from state to state, but the local government is always responsible. Sometimes that can mean the body is donated to area medical schools, but more often it involves a cremation and a burial. Hart Island in New York City is the largest mass grave site in the U.S., and still active today. This is a great Atlas Obscura article about indigent burials and the challenges and complexities of an improving but inconsistent system. One statistic showed that Washington D.C. budgets a few hundred thousand dollars a year for these cases. And so, at the very least, there is a back-and-forth between communities and governments on bearing the financial burden of unclaimed deaths. 

In one sense, a benefit of a funeral home or cemetery is that they operate with more freedom than a hospital or a manufacturing plant. Additionally, as a viable financial option, crowdfunding could play a role in delaying or discouraging advanced planning. No one is ever really ready for a death, but knowing that there are safety net options out there for these worst-case scenarios could impact planning decisions, or the lack thereof. I wonder if crowdfunding makes memorialization more or less likely? Are there are any differences in how payment works, and what ways it is impacting funeral businesses? How did cemeteries and funeral homes handle these situations before the rise of crowdfunding? And how are they dealing with them now if a family comes to them in need without raising money first? While these companies appear to have a lock on the market, is there is an opportunity for death care companies to step in and fulfill this need more directly as well?