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Record-high inflation has pinched household budgets this year, and there’s evidence it’s leading more people to ask strangers to help pay their bills.
The crowdfunding platform GoFundMe saw a growing number of users turning to the site to pay for basic expenses including gas, groceries and baby formula, GoFundMe said in its 2022 year-end report, released Tuesday.
“Global supply shortages and persistent inflation caused people around the world to ask for help, contributing to a 60% increase in fundraisers for gasoline, 110% increase in fundraisers for baby formula, 10% increase in fundraisers for groceries,” GoFundMe said in the report.
The report did not include the dollar figures raised or the exact number of fundraisers for each of those categories. But the increased use of online fundraisers to pay for essentials appears to be the latest indication that some Americans’ finances have grown more precarious this year as the cost of living has shot up.
Gas prices marched upward for the first half of the year, peaking at a national average of just over $5 per gallon in June. They were back down to $3.43 as of Monday, according to AAA.
Grocery prices have been on the rise too, with the pace of year-over-year price growth hitting a 43-year high in August, when shoppers paid 13.2% more on average for food compared to 2021.
Meanwhile, a baby-formula shortage had parents driving for hours in search of food for their infants. Formula wasn’t just scarce, it was more expensive, with prices jumping an average of 11% between March 2021 and May 2022, Axios reported.
The increased use of crowdfunding to cover essential expenses came as Americans’ financial health slipped for the first time in five years in 2022. The decline was partly because households stopped receiving pandemic benefits like the enhanced child tax credit, according to a survey conducted in April and May by the Financial Health Network. In November, 39.5% of U.S. adults said they lived in households where it had been somewhat or very difficult to pay for usual expenses within the past seven days, the U.S. Census Bureau’s Household Pulse survey found.
A GoFundMe donation was made once every second in 2022, according to the site’s year-end report, and 28 million people either sent or received help on GoFundMe. The fundraising site’s busiest day of the year was two days after the Uvalde, Texas school shooting, when people rushed to donate to the families of the 19 children and two teachers who were killed.
GoFundMe’s most successful fundraiser of 2022 in terms of dollars raised was the Stand with Ukraine fundraiser led by actors Mila Kunis and Ashton Kutcher, which raised more than $37 million to support relief efforts in Ukraine after Russia invaded. It was the second-largest GoFundMe ever. The biggest ever was a campaign started in April 2020 and led by actor Leonardo DiCaprio and Laurene Powell Jobs, the widow of Apple
AAPL,
co-founder Steve Jobs, which raised more than $45 million for people facing food insecurity as the COVID-19 pandemic took hold.
Separately from GoFundMe, there’s evidence that Americans are still donating to help others despite 2022’s economic uncertainty and stock-market declines. This year’s Giving Tuesday, an annual campaign to encourage charitable donations, raised a record $3.1 billion during 24 hours on Nov. 29, a 15% increase compared to 2021 and a 25% increase from 2020.
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