Crowdfunding Funerals is rising

Crowdfunding funerals is on the rise says the BBC.

A reader asks whether crowding funding is a viable option for your own funeral.  Clearly, they are wondering if is worth putting away your own money to buy a funeral plan.  Why bother when you can leave the problem to lots of other people?

The problem will be whether there are enough family and friends ready willing and able to send a decent sized contribution in quickly enough.  In the circumstances, the funeral director will certainly require the full fee to be paid before the funeral can take place.

In some cases, crowdfunding funeral campaigns have succeeded in paying for funerals – like that of the popular Big issue seller in York. But are you popular enough? Will people just think your family are after a free ride and could perfectly well pay for the funeral themselves.  In that case, crowdfunding could misfire badly.

We think it has its uses, but they certainly do not include crowdfunding funerals for ordinary people.  Tragic circumstances and lots of sympathy and folk with spare cash are probably needed to make this sort of fundraising work.  But if you feel the need to potentially be charitable, we know of some funeral plans which can be donated to third parties without penalty.

Crowdfunding is not usually free, a typical commission of 5% is taken from the proceeds, which is perfectly fair.

But do they guarantee that the cause is genuine and the funds are going to help a sick child not to fund an exotic holiday for a fraudster? Not that we can see – they seem to leave the “due diligence” to each and every contributor. I am sure some crowdfunding platforms are better than others but you need to be sure before you use one.

So crowdfunding is at the early stages of development, and we’re sure it will end up being heavily regulated by the Financial Conduct Authority.  That would dramatically put up costs and make the whole process much more cumbersome.