December 9, 2021 Reading Time: 4 minutes

Questions about accessibility to the payments system resurfaced last month when Kyle Rittenhouse was acquitted of felony charges for killing two people and wounding a third. A year earlier, in August 2020, crowdfunding website GoFundMe shut down a campaign to raise funds to pay for Rittenhouse’s legal costs. 

Everyone is entitled to a lawyer. And for most people, a lawyer is a major expense. So why would a crowdfunding website not support someone’s efforts to fund legal protection?

GoFundMe has said that the suspension was based on its policy of prohibiting fundraising for the legal defense of an alleged violent crime. Critics of GoFundMe countered that the site only applies this criteria loosely. It chooses to remove causes that the political right supports while looking the other way on causes the left supports.

Rittenhouse’s legal defence is not the only GoFundMe campaign to have been cancelled. Citing its terms of service, GoFundMe has suspended a number of campaigns in 2021 including:

In some instances, GoFundMe has cited a specific infraction, such as its policy against misinformation. In other instances it has cited its “sole discretion” to remove fundraisers that violate any of the “terms or spirit of these Terms of Service.”

Even if we don’t agree with these causes, it seems unfair to see people being blocked from receiving payments to fund activities that are not illegal. Access to payments is akin to a water connection or phone availability — a necessary and basic good. 

Nonetheless, it would be hasty to see GoFundMe’s suspensions as symptomatic of a broken payments system. Deplatformings are unfortunate, but as long as there are a broad variety of crowdfunding sites, then deplatformed causes and projects should always be able to find a home.  

The business of crowdfunding

The key service that crowdfunding sites like GoFundMe offer to their customers is a connection to Visa and MasterCard card networks. The Visa and MasterCard networks dominate online commerce. Without access to the huge pools of card users, an online cause wouldn’t be able to raise money as easily.

GoFundMe makes a small cut from donations. When it removes causes like Rittenhouse’s, it forfeits profits. So why did GoFundMe do it?

Crowdfunding sites don’t just sell card network access. They sell a particular type of access. In today’s partisan atmosphere, many people don’t want to donate using venues that host causes that they find distasteful. A site like GoFundMe “cleanses” its payments services so that it is palatable to its user base. That entails screening out all causes that do not fit what the average user thinks is proper.

GoFundMe has the right to cleanse its payments services. Businesses and individuals should typically be free to associate (or disassociate) with whomever they want.

Scanning through the various crowdfunding sites reveals a wide variety of differentiated platforms. There are Muslim crowdfunding sites like LaunchGood, Christian sites like InHisSteps and WayGiver, and Jewish sites like Jewcer. There are Democratic crowdfunding sites like ActBlue and Crowdpac, and Republican sites like WinRed. There are sites that focus on funding causes, and sites that focus on funding creative projects like art and music.

The good thing about having a panoply of crowdfunding sites is that even if one site refuses a certain campaign, another one will jump in to offer its services. An unplatformed or deplatformed cause won’t remain without a connection to the card networks for very long. And that’s generally what we want a payments system to provide — broad connectivity for lawful actors. 

Kyle Rittenhouse’s campaign ended up benefiting from this broad connectivity. The moment GoFundMe kicked it off, the campaign migrated to a competing crowdfunding site called GiveSendGo and proceeded to raise $630,000.

Of the four other campaigns mentioned above that were kicked off of GoFundMe this year, three ended up finding a home on GiveSendGo (1, 2, 3). The fourth migrated to LifeFunder.

So for now, the online crowdfunding universe seems robust to concerns about censorship. The ecosystem is competitive and the card networks seem keen on connecting any site that facilitates licit activity.

What would be worrisome, though, is if  MasterCard and Visa changed their approach and began to police crowdfunding activity.

Card network censorship

Imagine that it’s 2023 and Visa and MasterCard jointly announce that they are severing GiveSendGo from their networks. Given the dominance of these two card companies, their actions would result in the end of both GiveSendGo and the unique types of causes that site enables.

What justification would the networks have for cutting off GiveSendGo?

The card networks frequently remove businesses that are selling illegal goods and services. They do so because abetting illegal activity might open them up to a charge of money laundering. If GiveSendGo were found to be repeatedly allowing fundraisers for illegal activity, say terrorism or drugs, then the card networks would be entirely justified in cutting the site off.  

But it would be different if the card networks severed GiveSendGo for more amorphous concerns over brand-damaging activity. MasterCard, for instance, reserves the right to prohibit anything that is legal but may “damage the goodwill of the Corporation or reflect negatively on the Marks.”

All businesses have the right to protect their brands. Visa and MasterCard are oligopolies, however, which means that any effort to protect their brands could result in legal but controversial companies like GiveSendGo being forced to shut down. 

I’d suggest that oligopolies like Visa and MasterCard shouldn’t be allowed to censor legal businesses that do controversial things. In the same way that governments are obligated to provide services to every citizen, even ones who look different or do strange things, the card networks should be expected to do the same.

For now, Visa and MasterCard haven’t made any discernible efforts to limit crowdfunding accessibility based on concerns over their brand. But if they were to start, that would be a concerning development.

J.P. Koning


J.P. Koning is a financial writer and blogger with interests in monetary economics, economic history, finance, and fintech. He has worked as an equity researcher at a Canadian brokerage firm and a financial writer and publisher at a large Canadian bank. More recently, he has written several papers for R3, a distributed ledger company, on the topics of central bank cryptocurrency and cross border payments. He founded the popular blog Moneyness in 2012. He designs economics and financial wallcharts at Financial Graph & Art.

Koning earned his B.A. in Economics from McGill University.

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