This is part two of a three-part series on the relationship between crowdfunding and the funeral profession. To read part one, click here.

The emergence of crowdfunding within the funeral profession is very natural. With the cost of funeral services continuing to rise — and the size of the average American’s emergency savings continuing to dip — crowdfunding is an ideal solution for many families who might otherwise be unable to afford more than the most basic of funeral services.

This solution is not lost on the general public, either. In our last article, we mentioned some of the more popular crowdfunding sites, with searches for the word “funeral” returning more than 65,000 results. Organizations like Funeralfund and Funerals360 have even launched websites that are dedicated solely to funeral crowdfunding.

Good Ideas, but Not Without Risks

There’s certainly nothing wrong with crowdfunding a funeral. The very concept is a beautiful idea. What’s better than a community coming together to pool resources on behalf of families who might not otherwise be able to provide their loved ones a meaningful ceremony?

Crowdfunding a funeral could potentially bring out the best of a community, yet it’s not a perfect solution. Crowdfunding campaigns can fall apart for a variety of reasons — including campaign disorganization, lack of funding, audience reach, and even improper use of funds. When families choose to fund funerals through popular crowdfunding websites, there are some causes for concern.

Let’s review some of these issues, and how they might affect your funeral home and the families you serve.

Setting Up a Crowdfunding Campaign Isn’t Easy

Running a crowdfunding campaign — no matter the cause — is no simple feat. For every success story, there are hundreds of failed campaigns. In order for a crowdfunding campaign to be successful, it needs to be heavily promoted via social media, email, texting, and word of mouth. Effective campaigns need to clearly communicate goals and promises, as well as stay in touch with the crowd to deliver updates on those goals.

With all of the time, effort, and stress involved, imagine how hard that task might be for a grieving family.

No Guarantees

Many crowdfunding campaigns also can be ruined by a lack of speed and audience attention. Families may be optimistic that money will be raised, but there’s no guarantee that they’ll raise as much money as they intend or that they’ll do it as quickly as they need to.

An article in PCWorld analyzed Kickstarter’s own data and found that out of 60,000 failed projects, two-thirds failed to even reach 20% of their goal in funding.

Families can’t wait forever to hold a funeral. It may take time before a community begins to take note and the crowdfunding takes off. Unfortunately, there also is no guarantee that a crowdfunded campaign will get the attention of a community in the first place.

The Fund Distribution Problem

While these other issues can be problematic, the biggest cause for concern for funeral directors should be the distribution of funds. Popular crowdfunding sites deliver funds back to the organizer, typically through PayPal. While there are some laws that aim to bind an organizer to their promise, it is still a process rife with problems.

For example, when a funeral home sees that a family is raising money after a death, the funeral home might logically assume that this money will ultimately go toward the family’s funeral bill. The family, on the other hand, might have different ideas: perhaps it’s more important to them to take care of final medical expenses first, or to set some of that money aside for children.

Campaign organizers can use funds however they see fit, and there is often a long list of creditors that need to be repaid. If your funeral home happens to be on such a list, there’s no guarantee that you’ll be at the top.