Did Yelp and GoFundMe Create COVID-19 Fundraisers for Restaurants Without Telling Them?

Claim

Yelp and GoFundMe Created automated online fundraisers for various restaurants without notifiying their owners.

Rating

True

Reporting

A push from business owners forced two tech companies to modify an unprompted response to the COVID-19 pandemic.

Andy McMillan, owner of a bar in Portland, Oregon — where bars and restaurants were ordered to close down as part of efforts to slow the spread of the disease — drew attention to the surprise effort between the business review outlet Yelp and online crowdfunding platform GoFundMe on Twitter on March 26 2020:

According to McMillan, the two sites automatically generated a fundraiser for his business without notifying him — or even allowing him to deactivate it without a significant effort.

“I need to give GoFundMe a scan of my ID, and my [Employer Identification Number],” he wrote, adding “I haven’t registered for an EIN yet” [in order to] claim the page before I can shut it down.”

McMillan, who also organizes the XOXO festival in Portland highlighting indepdendent technology and art, also wrote that despite saying they would not take a direct fee, GoFundMe set a default 15 percent “tip” on any donation, enabling that company to draw a fee:

According to the technology news site The Verge, the two websites’ joint fundraiser was also criticized by Nick Kokonas, a restaurant magnate who owns popular eateries in Chicago and New York.

“If you want to report on the worst behavior in the industry — here you go,” Kokonas wrote on his own Twitter account. “This causes harm to our reputation, is done without consent, and is being done on a mass basis for their own benefit. Unbelievable. I don’t need to deal with this in the middle of a crisis.”

In a statement, Yelp admitted to not notifying businesses prior to the creation of the various fundraisers:

As such, we have paused the automatic rollout of this feature, and are working with GoFundMe to provide a seamless way for businesses to opt into the program moving forward, as we have received a great deal of interest and support for the program from both consumers and businesses alike.

The restaurant news site Eater reported that Yelp has also pledged $25 million in “waived advertising fees and free services” to help independent bars and restaurants during the outbreak. Both Yelp and GoFundMe had already promised to distribute individual $500 matching grants for businesses engaging in their automated fundraisers, up to $1 million in total donations.