Beware The Gift: Understanding Ethical Crowdfunding

Government employees are subject to dozens of laws regulating their conduct both on and off the clock. These laws cover everything from political fundraising activity and financial interests, to acceptance of gifts. What most employees don’t realize is that “gifts” include on-line crowdsourced fundraisers like go-fund me!

Employees of the Executive Branch look to  5 C.F.R. 2635 201-205 and 301-305 to determine if and how to accept a gift. A gift is defined in, 5 C.F.R. 2635.203; a gift as something of monetary value received for less than the value of the item and “includes any gratuity, favor, discount, entertainment, hospitality, loan, forbearance, or other item having monetary value.” The purpose of regulating the acceptance of gifts by government employees is to maintain public trust in the government and to ensure that there is no appearance or actual act of impropriety or undue influence. Gifts cannot be accepted if there is, or appears to be, a conflict of interest, or if the gift is given due to the receiver’s official federal position. There are several exceptions to prohibited gifts, one of which allows acceptance of a gift if the circumstances are clear that the “gift is motivated by a family relationship or personal friendship rather than the position of the employee.” 

So where does Crowd-funding fall into gifts and their exceptions? First, Personal crowd-funding is when someone raises money for a person, family, or group by soliciting for donations; this is usually done on the internet. Personal crowd-funding is most often sourced on websites like Go-fundme. The fundraiser may be created by the person in need, or by someone on their behalf. The premise of Go-fundme is simple. The coordinator creates a crowd-funding page, choosing a title, a photo and presenting a short story to garner support. After launching the fundraiser, people are encouraged to donate, share on social media and get the word out to raise funds.

Although crowdfunding is not prohibited, it is a tricky ethical area. Government employees should avoid using their official title in their crowdfunding efforts. Using “Active Duty Military Member and War-Hero’s house burns down” or “CDC Employee struggling to make ends meet” as the focal point of a crowdfunding post likely violates the ethics rules by focusing on the person’s government position. Simply stating “Government Employee seeks help” may lean in the right direction, but could still put you on the wrong side of the ethics rules.

During the 2019 government shutdown, there were over 1,800 go-fundme campaigns, raising over $400,000 in support of furloughed government employees. The Office of Government Ethics found that Government employees conducting crowdsourcing campaigns focused on their furlough status, were likely violating the ethics rules. Then, in November of 2019, a go-fundme raised over $200,000 for an Intelligence Community Whistleblower; it was eventually reported to the Inspector General for the Intelligence Community. This  fundraiser was hosted by someone other than the employee, but the premise was based on the employee’s official position, which likely causes it to violate ethics rules.     Due to the tricky intricacies of government employee acceptance of gifts, the best thing for a government employee to do is clarify with their agency’s legal office before launching, or accepting, a crowdfunding donation.