GoFundMe is a for-profit crowdfunding platform, which makes money based on donations on the platform. The platform makes money via fees paid by whatever entity runs the campaign and as transaction fees for processing the payments. Also, it makes money via the GoFundMe Charity service (fundraising platform) and donations.
GoFundMe is a for-profit crowdfunding platform.
Founded in 2010 by Brad Damphousse and Andrew Ballester, the service enables people to raise money for events including graduations, celebrations, and other personal causes. It also provides a vital source of funding for those who require medical procedures as a result of illness or injury.
Damphousse and Ballester created an early iteration of GoFundMe called CreateAFund, which allowed social media users to raise money for causes near to their heart. At the time, crowdfunding as we know it today was only beginning to become mainstream.
In 2008, GoFundMe was adopted as the preferred name. Less than a decade later in 2017, GoFundMe became the largest online crowdfunding platform, raising over $3 billion since its inception.
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GoFundMe revenue generation
GoFundMe makes money whenever a user donates to a cause.
For every donation there are two fees:
- Platform fees – these are fees paid by whatever entity is running the campaign. The entity may be an organization, team, or individual. Note that the platform fee is 0% for those wanting to start a fundraiser in the UK, Australia, Canada, United States, and most major European countries. For the rest of the world, the exact platform fee depends on the country. In Luxembourg, for example, the platform fee is 5%.
- Transaction fees – which cover the cost of processing each payment. In the United States, the transaction fee is 2.9% plus 30 cents. Similar to platform fees, transaction fees vary by country. Returning to the Luxembourg example, the transaction fee is 1.4% of the donation in Euros.
GoFundMe Charity is a feature-rich online fundraising platform helping organizers raise more money by engaging with donors. Businesses get full access to donor and fundraising data in one place and can create donate buttons and email sequences that are on-brand.
Fundraising campaigns can also be integrated with platforms such as WordPress, Salesforce, and Mailchimp, among others.
Two subscription plans are available:
- Free – every donation attracts a 1.9% processing fee plus 30 cents. This gives the fundraising organization a guaranteed 97.5% of the total donation.
- Flex – every donation attracts a 2.2% processing fee plus 30 cents, giving the organization at least 94.5% of the donation. However, donors can choose to cover the processing fee which means the organization receives 100%.
Some individuals and organizations prefer to donate directly to GoFundMe itself. In this case, the funds are redistributed where appropriate.
- GoFundMe is a for-profit crowdfunding service. The service was originally called CreateAFund and allowed social media users to raise money for causes important to them.
- GoFundMe makes money on every user donation. The 5% platform fee has recently been waived in several countries such as Australia, Canada, and the United States. However, every fundraising campaign must pay a 2.9% transaction fee depending on where the campaign is located.
- GoFundMe also offers a dedicated service for businesses running fundraising campaigns. Dubbed GoFundMe Charity, the service helps them create targeted, on-brand messages that can be integrated with popular platforms such as WordPress and Salesforce.
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