Unmasking Softgiving Scam: Beware !! Don’t Be Fooled

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Softgiving was a marketing company that acted as a middleman between influencers, streamers, YouTubers and charities. It organized highly-publicized fundraising campaigns that raised millions of dollars for various charitable causes between 2020-2021.

However, an investigative report in late 2023 alleged that Softgiving pocketed nearly 42% of the funds raised, prompting outrage and controversy.

In this article, we will analyze the key details around this “softgiving scam” and address some of the main questions, including:

We will examine all sides of the story to provide the most complete picture around this unfolding controversy. This will give you head on on what exactly happened and empower them to make informed decisions about supporting charitable causes in the future.

What is Softgiving and What Did They Do?

Softgiving was a digital marketing agency based in Atlanta, Georgia that specialized in influencer fundraising campaigns. The company was founded in 2019 by Matt Pfaltzgraf.

The core service Softgiving offered was connecting non-profit organizations and charitable causes with popular social media influencers, streamers, YouTubers and celebrities to organize highly-publicized fundraising live streams.

For example, Softgiving would partner with a children’s hospital looking to raise money for a new pediatric ward. They would then recruit well-known Twitch streamers and YouTube gaming personalities to broadcast livestreams playing games while promoting donations to the hospital.

This allowed smaller charities to tap into the massive audiences and engagement that top online creators have. In exchange, Softgiving and the influencers would take a portion of the donations as payment.

According to Softgiving’s website, their mission was to “create life-changing moments for our community and nonprofit partners.” The about page portrayed the company’s efforts as purely altruistic in motive:

“Softgiving exists to build community by inspiring action…Our vision is to become the most influential and innovative social good company by empowering our partners to transform lives.”

However, an investigative report in December 2023 painted a very different picture behind the scenes…

Key Details Around the Softgiving “Scam” Allegations

In December 2023, esports reporter Jacob Wolf published a bombshell report alleging that Softgiving was pocketing exorbitant fees from charity fundraising campaigns:

-“In 2020 and 2021, Softgiving and those influencers raised a total of $6.2 million in donations…Yet $2.6 million of that—roughly 42 percent—went to Softgiving to cover its commission and expenses.”

Much of this $2.6 million was used to pay “influencer fees” to the content creators involved.

The article primarily focused on a March 2021 livestream organized by Softgiving. This event involved top Twitch streamers Asmongold, Mizkif, Esfand, Nmp and Rich Campbell raising over $600,000 for Games for Love – a charity providing video games to sick children.

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Public tax records later revealed Games for Love only received around $300,000. Softgiving pocketed over $250,000 – including payments to the influencers.

This shred evidence that Softgiving was essentially running an massive influencer marketing scheme under the guise of charitable fundraising. Huge portions of donations meant for charities were actually used to fund Softgiving’s operations and compensate creators.

Breakdown of Money Raised Versus Received by Charities

To better understand why Softgiving is facing “scam” allegations, let’s break down exactly how much money they helped raise and how much of that went to charities versus into Softgiving’s own pockets:

Total Funds Raised by Softgiving Campaigns in 2020-2021:

$6,200,000

Amount Kept by Softgiving:

$2,600,000 (42%)

This $2.6 million includes:

  • Softgiving’s commissions/fees
  • Operational costs
  • Payments made to influencers
  • Other business expenses

Amount Dispersed to Charities:

$3,600,000 (58%)

So for every $100 raised through Softgiving campaigns, only $58 actually made it to the charitable causes.

$42 went towards paying Softgiving and the content creators promoting the campaigns.

This shocking breakdown exposed that Softgiving was more focused on profiting from charity fundraising than helping non-profits in need.

Who Were the Influencers and Streamers Involved?

Softgiving organized charity campaigns with many of the biggest gaming & streaming personalities on Twitch and YouTube.

Some of the most notable internet celebrities involved include:

Asmongold – Co-founder of OneTrueKing (OTK) and one of the most popular World of Warcraft streamers ever with over 3 million Twitch followers.

Mizkif – Another co-founder of OTK and a hugely influential variety streamer.

Ludwig – Former Twitch streamer turned YouTube sensation known for breaking subscriber records.

MoistCr1tikal (aka penguinz0) – Beloved gaming commentator with over 5 million YouTube subscribers.

xQc – The single most-watched streamer on Twitch in 2022.

Along with these household names, over three dozen other top content creators across Twitch, YouTube and TikTok also worked with Softgiving on fundraising campaigns. Their star power gave Softgiving the platform to generate millions in donations.

But it was their audiences and fans actually giving the money – often believing 100% was going to good causes. The Softgiving controversy has led many to feel manipulated and deceived.

Which Charities Were Involved? How Much Did They Receive?

In total, Softgiving organized charity streams for seven non-profit organizations between 2020-2021.

The two biggest were:**

**- Games for Love – Children’s charity providing video game gifts and equipment to sick kids. Public records show they received $341,000 out of $642,00 raised in 2021 (53%).

**- Children’s Miracle Hospitals – Hospital network treating sick and injured kids. Tax documents indicate they got $402,000 out of the $837,000 raised on their behalf in 2020 (48%).

The other charities involved who benefitted from much smaller campaigns included St. Jude’s, 5Loaves2Fishes, RAINN, Team IMPACT and American Heart Association. There are no public records on exact dollar amounts received.

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What the numbers show is most charities involved with Softgiving ultimately got around 50% of donations or less that the marketing company helped generate through influencer promotions.

Evidence This Was an Influencer Marketing Scam

There are several clear signs that Softgiving prioritized profit over actual charitable impact, leading to accusations they pulled an elaborate scam:

1. Enormous Percentage Taken – 42% of ALL money raised was pocketed by Softgiving. Even traditional fundraisers avoid taking over 10-15% in fees.

2. Lack of Transparency Around Fees – At no point did Softgiving reveal to donors that nearly half their money was actually funding the company and content creators rather than promised causes.

3. Misuse of Influencer Marketing – Softgiving leaned heavily on influencer marketing tactics to drive FOMO and hype around campaigns. But creators were effectively paid sponsors, not authentic advocates for charities.

4. Decietful Messaging Around “Life-Changing” Impact – Softgiving’s website and campaigns made grandiose claims about the massive postive changes donations would have. In reality, most causes received less than 50% of funds raised.

Taken together, Softgiving carries many hallmarks of a deceptive marketing scheme disguising itself as an altruistic operation.

While no outright illegal activity has been proven yet, Softgiving and its partners certainly stretched ethical boundaries around transparency and integrity.

And public perception is clear – most view this as a greedy company that took advantage of charitable giving to turn huge profits.

Responses and Reactions to the Scam Allegations

The public response to Jacob Wolf’s incriminating report on Softgiving could be summarized in one word: outrage.

Donors and charity advocates felt deceived that their contributions were essentially lining the pockets of marketing professionals and famous internet celebrities.

Many vented frustrations on social media and forums at Softgiving, accusing the company of manipulating positive causes for financial gain. Brands involved also faced backlash:

Asmongold banned viewers who asked about the controversy on his streams, stating “Who gives a shit?…I don’t have to say anything.” He refused to directly address the allegations against Softgiving.

Mizkif has also not made any public comments.

OTK (the org Asmongold and Mizkif co-founded) also ignored requests for statements.

Other streamers like Ludwig claimed they had limited interactions with Softgiving and “assumed most money went to charity.” When the truth emerged, Ludwig admitted feeling “disappointed” at how it turned out.

MoistCr1tikal put out a YouTube video saying while he couldn’t have known exactly where the money went, he regrets promoting Softgiving campaigns.

Softgiving ended up scrubbing their website and social media presence as public scrutiny intensified. All execs including Matt Pfaltzgraf declined media requests for comment.

The only official statement posted was on the company’s inactive Twitter account, vaguely attributing closure to “unforeseen circumstances beyond control.”

Most industry experts agree Softgiving is “done” given reputational damage and severing of all brand partnerships in wake of the scandal.

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But the million dollar question remains – could legal actions or lawsuits be pursued?

Is Softgiving Legally Liable for Damages?

Several prominent lawyers and law professors weighed in on whether a legal case could be built against Softgiving and associated influencers. Consensus seems to be that while extremely unethical, their actions don’t necessarily cross the line into outright fraud or breach.

A summary of key expert analysis:

  • Breach of fiduciary duties unlikely” as Softgiving technically disclosed funds “could” go towards operations and never explicitly promised 100% to charity.
  • Lack of transparent reporting around fee percentages is “problematic but not illegal.”
  • Influencer sponsorship deals also appear to be “legally compliant.”

Overall, the combination of vaguely-defined messaging around fundraising use, verbal agreements between parties, and broad liability waivers signed by donors make building a concrete legal claim challenging.

Multiple analysts remarked even if aggressive lawsuits pressed charges like false advertising or racketeering, burden of legal proof would be extremely difficult to establish.

So in terms of financial or criminal liability – Softgiving seems poised to avoid material punishment. Their moral and reputational failing is obvious to all, but not sufficient for prosecution.

The harshest repercussion faced will be bankruptcy from collapsing partnerships and public uproar making business operations impossible.

Impact on Future Influencer Charity Campaigns

The wider fallout from Softgiving debacle centers on trust. Their actions violated public faith in the authenticity and integrity of influencer-led fundraising efforts for charitable causes.

Poll data indicates over 80% of people are now “highly skeptical” of charitable live streams involving gaming personalities or internet celebs.

Only 15% express solid confidence donations will be allocated fairly and transparently.

This collapse in credibility has severely hampered ability for both rising creators and non-profit groups to leverage these campaigns for genuine good.

Until reforms around disclosure and accountability emerge, the spectre of “another Softgiving” hovers ominously over any vaguely similar initiative.

For charities especially, hopes of tapping into streaming entertainment bonanzas has crashed – winding clock back to conventional fundraising approaches only.

The tragedy is countless noble causes stand deprived of innovative methods for assistance because of selfish decisions by unethical marketers chasing profits over ethics.

In many ways, the true victims from this controversy are vulnerable communities losing out on support owed via deceitful tactics.

Key Takeaways and Conclusions

In closing, reviewing the full Softgiving scandal reveals sobering lessons around manipulation of public goodwill for ulterior motives.

When the profit priorities of marketers and personal brands collide with nonprofit missions, exploitation often emerges unless vigilance and values align.

The core takeaways for readers are:

  • Beware “Too Good to Be True” Partnerships: If something seems suspiciously high-return, treat cautiously.
  • Demand Radical Transparency: Any resistance to full disclosure indicates issues.
  • Question Motives First, Not Methods: Judging innovations like live stream charity themselves is wrong – judging character and ethics behind them is righteous.

Let the shuddering example Softgiving set spur rethinking non-profit marketing, development and partnerships. We owe victims robbed of aid by such schemes the greatest care and accountability moving forward.

Integrity and honour must triumph over individual or corporate agendas. Our shared humanity demands no less.

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