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HB 505

Restrict use of crowdfunding money for other purposes

136th Legislature (2025-2026) Introduced by Cindy Abrams and 1 co-sponsor

Ohio HB 505 restricts crowdfunding organizers from using donated money for purposes other than stated campaign goals, enhancing donor protection and financial accountability.

Reported - Substitute
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Bill Summary · HB 505

Legislative bill overview

HB 505 would establish legal restrictions on how money raised through crowdfunding campaigns can be used, requiring funds to be spent only for their stated purposes. The bill aims to prevent crowdfunding organizers from diverting donations to unrelated personal or business expenses after the campaign concludes.

Why is this important

Crowdfunding has become a significant funding mechanism for medical emergencies, disaster relief, small business startups, and creative projects. Without restrictions, donors have limited legal recourse if organizers misuse contributions, potentially undermining public trust in crowdfunding platforms and leaving vulnerable fundraisers without protection.

Potential points of contention

  • Enforcement challenges: Determining what constitutes "other purposes" versus legitimate related expenses (e.g., can medical fundraising money pay for travel to treatment?) creates gray areas difficult for regulators to monitor
  • Platform liability questions: Unclear whether crowdfunding platforms, organizers, or both would bear responsibility for fund misuse and whether platforms must verify fund usage after campaigns end
  • First Amendment concerns: Some may argue restrictions on how individuals spend voluntarily donated money raise constitutional questions about freedom of contract and property rights

Compiled from official sources — confirm details with the bill’s official record.

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