BTV Research: How does a fundraising platform manage donor money?

Millions of donor levies are raised each year for various causes. There is no law on donations and this money is managed by various organizations according to the rules that they establish themselves. One of the fundraising platforms most frequently raises money through medical campaigns.

In 8 hours, donors collect more than 500,000 BGN for Andy on the HelpCarma platform for a liver transplant, which must be performed urgently in Germany.

In 2 weeks, more than 220,000 BGN were collected for an operation that saved the life of Vladi, 28, from Burgas.

And for a month and a half more than 700,000 leva to treat the father of three Ángel children. More than BGN 640,000 have been raised for the Bulgarian healthcare fight against COVID-19.

The HelpCarma platform bills itself as “the most powerful fundraising tool.”

Konstantin Krastev, owner of the platform, points out that they have 130,000 individual donors, 366,000 donations and 21 million BGN raised in the two years of existence.

In 2017, Konstantin Krastev registered HelpCarma as a public benefit foundation.

He himself reports that his foundation has raised 21 million BGN in donations in two years, but around 13 million have reached people in need. BGN 13,535,135. We tried to find out what was happening to the remaining BGN 7,464,865. In response to our questions, the foundation indicated that they had BGN 5,190,370 unspent on their own accounts. The amount is current as of October 22. Where are the other 2,274,495 BGN?

There is an explanation for part of the amount. HelpKarma retains a percentage of the donations to be able to maintain itself and develop its activity. Until recently, the amount was taken from money raised for people in need.

Over time, the foundation has taken on a different percentage: 6.5% in February 2018, and the last percentage was 5%. Recently, the platform offers the opportunity for donors to spend extra money on those who translate for the needy, specifically to support their activities.

Most of the money withheld from donors is for the compensation of employees, according to the foundation’s reports. In 2018, the reported amount is BGN 214,000, and last year the amount was more than three times higher: BGN 713,000.

HelmKarma owner Konstantin Krastev explains that 17 people work for the platform.

If they are 17 years old, their salary is about 4,000 BGN. “It depends on the specialist, but if we compare the companies that are in Sofia, as location, the people who are at the level and should receive a salary higher than 5-6000 as salary ., which is normal for TI, ”explained Slavcho Slavchev, technical director.

“People here are well paid because they work very hard, sometimes with a lot of stress. The cause is in the heart, but in the end, we all have bills and we have to pay them,” says the owner of HelpKarma.

The average salary of employees in the IT department of the Konstantin Krastev Foundation in 2018 was BGN 3,900, in 2019, more than BGN 4,800, and in 2020 it drops to BGN 1,200, according to the foundation’s own calculations, which we receive for email after the interview. The owner of the foundation says that he himself is working for free for the cause.

“Yes, BGN 19,000. This is a salary that a specific person receives for a certain job. I can give you an example,” Konstantin Krastev said.

“Yes, it is true. This is my salary that I received. But I received this salary until a certain point …”, explains Slavcho Slavchev.

Slavcho Slavchev has been appointed Technical Director of HelpCarma. bTV has data from its sources, which shows that in December 2019 Slavchev should have received income in excess of BGN 80,000. Initially, his monthly salary was over BGN 22,000. Two months later, it was close to BGN 50,000. It then drops to BGN 26,000, but after mid-2019 it rises again to BGN 40,000 per month.

“Definitely IT services are expensive, definitely Slavi’s role is very high and he is one of the best specialists in Bulgaria”, says Konstantin Krastev.

According to the data we have, the amount earned from the salary of the foundation’s technical director alone exceeds BGN 775,000 or an average of nearly BGN 28,000 per month, including the months in which Slavchev claims to be on leave without pay salary.

HelpCarma’s public reports for the last two years show a contradiction. The foundation claims that they retain 5% to support their activities. But even just the cost of employee compensation in 2018 is almost 8% of all donations received, and in 2019 it rises to almost 9%.

The reports draw attention and other amounts – accounts receivable of around BGN 300,000 are in the 2018 report.

“I will explain to you immediately: first we do not grant loans, that is, accounts receivable, we do not grant loans, etc. The account receivable was this: in 2018 we had a technical problem with PayPal,” explains Konstantin Krastev.

Although it states that they do not grant loans, in 2018 BGN 312,000 accounts receivable were reported under “loans granted”. Konstantin Krastev affirms that the reason why the amount appears as a credit is a technical problem with a financial intermediary, through which part of the donations were made. To solve the problem, instead of the foundation’s account, the financial intermediary transferred the money to Krastev’s personal account.

I returned this money, we just had a technical problem, he said.

The owner of the foundation claims that the issue has been resolved, but there are also accounts receivable in the 2019 report.

Accounts receivable in December 2019 amount to BGN 51,000. “This is a personal loan that I took from the foundation,” explains Slavi Slavchev. By the end of the year, everything must be restored and returned, says the owner of the foundation.

Slavi Slavchev admits that the loan is for an apartment. “I took it as a loan from the foundation, which I return to the foundation since this is documented, respectively, it has everything it has as transactions, so I actually pay the interest,” Slavchev said.

So it turns out that, in addition to the BGN 775,000 accrued for wages over two years and 4 months, Slavcho Slavchev also received a loan from the foundation, but did not buy an apartment due to the emergency situation with COVID-19. After our interview, Slavchev’s debt was paid. But despite his good salary, he did not return the money, but to his boss Konstantin Krastev. This is evident from a payment order that Krastev himself provided us in an email to bTV.

“The amount was paid in full on October 26, 2020, the principal owed in the amount of BGN 60,000 was repaid and interest was paid in the amount of BGN 6,049.59. The interest collected will be used for our main activity”, it reads on the letter.

However, the amounts indicated by Konstantin Krastev again contradict those officially reported. It claims to have paid a debt of 60,000 BGN, and the 2019 report records only 43,000 borrowed, and even the total amount of accounts receivable from the foundation is less than 60,000 BGN – 51,000 BGN

Konstantin Krastev’s a la carte payment document contains an amount of less than 50,000. Konstantin Krastev also stated that after our conversation they will change the statutes of HelpCarma and will no longer give loans.

Expect more of the investigation on bTV Reporters this Saturday!