The Risks of Crowdfunding for People With Special Needs

Takeaways

• Crowdfunding can provide financial support for people with special needs but may jeopardize their ability to qualify for means-tested government benefits such as Supplemental Security Income and Medicaid.

• Common reasons for crowdfunding within the realm of special needs include covering the costs of medical expenses, assistive technology, home modifications, accessible vehicles, education support, and emergencies

• Certain public assistance programs have strict income and asset limits, and crowdfunding money can be considered countable, affecting eligibility.

• Some strategies to protect means-tested public benefits include using special needs trusts and ABLE accounts, or working with nonprofits that manage funds.

• Seeking guidance from a special needs planning attorney is essential to avoid benefit complications.

Crowdfunding is a way to raise money from a large number of people, typically online. Instead of asking one or two wealthy investors, you ask many people to each contribute a small amount. Often used for specific projects, causes, or personal needs, it relies on the power of community support. In 2024 alone, crowdfunding in the United States generated more than $372 million, and reports project that this market will only grow in the foreseeable future.

In recent years, crowdfunding has become a popular way for individuals and families to raise money for people with special needs. From covering the costs of specialized medical equipment to funding home modifications for accessibility, donation-based crowdfunding offers a fast, and often emotional way to rally support from communities, friends and family, and even strangers.

But while crowdfunding through social media and platforms such as GoFundMe, GiveSendGo, and Help Hope Live can provide a financial lifeline, it also carries risks, particularly regarding eligibility for means-tested government benefits such as Supplemental Security Income (SSI), Medicaid, or housing assistance. Knowing how to navigate these risks is vital for protecting the long-term financial security of the individual with the disability.

Why People With Special Needs Are Crowdfunding

Crowdfunding campaigns for people with disabilities often seek support for expenses that insurance or public benefits don’t fully cover. Some common needs include:

• Medical expenses. Paying for surgeries, therapies, or treatments not covered by insurance.
• Assistive technology. Funding for wheelchairs, communication devices, hearing aids, or service animals.
• Home modifications. Installing wheelchair ramps, accessible bathrooms, or stair lifts.
• Accessible vehicles. Purchasing or adapting vehicles to accommodate mobility needs.
• Education and employment support. Funding specialized education programs, vocational training, or work-related accommodations.
• Emergencies. Covering costs after accidents, medical crises, or natural disasters that disproportionately affect people with disabilities.

How GoFundMe Accounts and Other Crowdfunding Sites Can Jeopardize Benefits Eligibility

Many critical government benefits, such as SSI and Medicaid, have strict income and asset limits. SSI, for example, requires that a person have less than $2,000 in countable assets ($3,000 for a married couple). For a parent applying for a child, these amounts increase by $2,000.

Money raised through crowdfunding may be considered countable income and assets, which could then reduce the person’s monthly SSI payments, disqualify them from Medicaid coverage, or affect their access to housing programs, food assistance, and other critical services.

Even if the money is intended for medical care or accessibility needs, depositing these funds into a personal bank account without proper planning can jeopardize benefits.

How to Crowdfund Without Losing Benefits

Fortunately, there are some strategies for crowdfunding that can help protect benefits eligibility, including the following:

• Using a special needs trust. Funds raised can be directed into a special needs trust (SNT), which does not count toward SSI or Medicaid limits if properly established. The trust can pay for disability-related expenses without disqualifying the individual from public benefits. To set up an SNT, work with an attorney experienced in special needs planning.
• Using a pooled special needs trust. If setting up an individual special needs trust is too expensive, families can use a pooled trust managed by a nonprofit organization. These trusts accept smaller amounts of money, and the nonprofit manages the funds while the individual with the disability remains eligible for public benefits.
• Setting up an ABLE account. An ABLE (Achieving a Better Life Experience) account is a tax-advantaged savings account for people with disabilities. Contributions up to certain limits do not affect SSI or Medicaid eligibility, as long as the account balance stays within federal guidelines. The contribution limit for 2025 is $19,000.
• Working with nonprofits that offer fund management. Some nonprofit crowdfunding platforms, such as Help Hope Live, will manage raised funds, directly paying vendors for approved expenses rather than giving the funds to the individual. This helps avoid having the funds treated as personal assets.
• Having a third party run the campaign. Instead of having the person with the disability or their immediate household start the crowdfunding campaign, a trusted friend, extended family member, or community group can run it. The third party collects and controls the funds and pays the expenses directly. This avoids the funds being counted as income or assets for the benefits recipient.
• Being transparent and careful with language. When setting up a crowdfunding campaign, clearly state that funds are for specific disability-related expenses and that proceeds will be handled in ways that protect the disabled person’s benefits eligibility. Avoid wording like “giving cash directly to” the individual.

Getting Expert Help From a Special Needs Planning Attorney

The benefits of crowdfunding can be significant. It can be an incredible way to bridge financial gaps for people with special needs by helping to provide access to vital services, equipment, and opportunities that can transform lives. However, without careful planning, it can inadvertently create barriers to the government benefits people rely on.

With careful planning and by working with an experienced special needs planning attorney near you, you can raise necessary funds to meet your needs or the needs of a loved one with disabilities without jeopardizing government benefits.

For additional reading about public benefits and planning strategies for people with disabilities, check out the following articles:

• Loans and Grants for Wheelchair Vans and Vehicle Adaptations
• Medicaid Coverage for Working People With Disabilities
• Social Security Simplifies Online SSI Application
• Child Support and Special Needs: 6 Important Questions
• Avoid Dropping Medicaid After a Large Award or Settlement
• How ABLE Accounts Can Boost Your Financial Health