Legal stuff: Does Fundraising Plugin Violate Crowdfunding Laws?

Another great plugin…you guys are amazing!

Quick question that may be out of scope, but I’ll ask it anyways..

I noticed there have been some issues regarding crowdfunding laws in different states. Will that in anyway impede on us implementing this plugin into our site?

Thanks a bunch

  • Arun Basil Lal
    • New Recruit

    Hey @ekenedcreator

    Welcome to the forum and thanks for the compliments :slight_smile:

    To be honest, I cannot be sure. This is a bit different from crowd-sourcing, its more like accepting donations and that is always okay, right?

    Maybe you should check with local bodies, where are you from btw? Maybe one of our members can help you out. I hope you dont mind if I change the title of this post so that someone might catch this thread.

  • winning
    • The Incredible Code Injector

    @ekenedcreator

    Do you mind to educate us a little bit more about the law? Such as that what is the general requirement? What is the difference between states? Anything that you know of.

    coding-monkey told me some general advice on ecommerce (when users deal with money transaction on my website), which may not be directly relevent here:

    https://premium.wpmudev.org/forums/topic/can-i-use-marketpress-to-build-this-site#post-194877

  • ekenedcreator
    • WPMU DEV Initiate

    Hey @arun

    That’s what I figured since it’s donations we’re accepting in return for a perk. (i.e, kickstarter, indiegogo, launchit, quirky, rockethub, etc.). I think all should be well, so I’m giving my guys a green light to implement the plugin. Please let me know if you hear about anything.

    Thanks a bunch

    Hey @winning

    Here’s the article about state’s fighting for crowdfunding control…

    http://libn.com/2012/03/19/state-regulators-fight-for-crowdfunding-control/

  • winning
    • The Incredible Code Injector

    @ekenedcreator

    Thanks for the article link. Good reading!

    Do you or anyone have a way to prevent scams?

    Say, we setup a kickstarter alike website to allow anyone to do fundraising, which is a good thing. However, bad guys can take the advantage and tell everyone he represents Red Cross at certain state/city or he just simply comes up with a touchy story to move everyone and get people’s emotions to donate to his paypal account, say, RedCrossNYC@redcrossorg.org (a fraud email since nobody would know or verify if this is THE account), and once he gets all the money, he just disappears…I guess the website who provides the meanings for these bad guys to scam people may also share some liabilities although we can say whatever in terms and agreement.

    What is the general practice to avoid these scamers? especially on “self-service” fundrasing websites.

  • Cole
    • The Incredible Code Injector

    I’m am not a lawyer by any means, but here is my layman’s interpretation of this issue.

    A quick note. The current implementation of fundraising does not touch any of these issues as it just accepts donations with no conditions at this point.

    It seems to me the legality will need to be addressed based on the type of implementation your site uses. Making sure your users don’t abuse features and abide by guidelines is something you want to address with any website. That being said maybe I should consider some optional terms and conditions areas for administrators to insert their specific policies and guidelines that users must accept before creating a fundraiser.

    The article seems to deal with the legality of crowdfunding equity or securities for a company. Seems like popular sites like kickstarter and indiegogo would not be effected by this since their guidelines don’t allow for equity purchases only clear start to finish goals for funding a project.

    But again… not a lawyer :slight_smile:

  • Arun Basil Lal
    • New Recruit

    This is an interesting discussion, let me share it with the crowd.

    @winning:

    I guess the website who provides the meanings for these bad guys to scam people may also share some liabilities although we can say whatever in terms and agreement.

    Not a lawyer here, but to the best of my knowledge, whatever you put in the TOS is valid and protects the people who provide those means. But then again, it all depends on how good the lawyers are on either side.

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