How Does GoFundMe Make Money?

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.

Business Model Element	Analysis	Implications	Examples
Value Proposition	GoFundMe’s value proposition centers on providing a platform for crowdfunding campaigns with the following key elements: – Ease of Use: A user-friendly platform for creating and managing fundraising campaigns. – Accessibility: Open to a wide range of fundraising purposes, including personal, medical, educational, and charitable causes. – Social Sharing: Tools for sharing campaigns on social media to reach a broader audience. – Trust and Security: A secure and transparent platform that ensures funds go to the intended recipients. GoFundMe aims to empower individuals and organizations to raise funds for causes they care about effectively.	Provides a straightforward platform for launching fundraising campaigns. Welcomes a diverse range of fundraising purposes, making it inclusive. Offers tools for amplifying campaigns through social sharing. Builds trust and confidence through secure and transparent processes. Attracts users looking for a hassle-free and impactful way to raise funds for various causes. Serves as a reliable fundraising platform for personal, medical, educational, and charitable needs.	– User-friendly platform for creating fundraising campaigns. – Inclusivity in fundraising purposes. – Social sharing tools for broader reach. – Emphasizes trust, security, and transparency. – Attracts users seeking effective fundraising solutions. – Serves various fundraising needs.
Customer Segments	GoFundMe serves multiple customer segments, including: 1. Individuals: Individuals looking to raise funds for personal causes like medical bills or educational expenses. 2. Charities and Nonprofits: Organizations seeking support for charitable initiatives. 3. Entrepreneurs: Individuals and startups crowdfunding for business ventures. 4. Community Groups: Local community groups and associations raising funds for projects and events. 5. Medical Campaigns: Fundraisers for medical treatments and emergencies. GoFundMe caters to a diverse array of users with different fundraising needs.	Focuses on diverse customer segments with varying fundraising purposes. Customizes the platform to meet the specific requirements of individuals, charities, entrepreneurs, community groups, and medical campaigns. Provides a versatile platform for a wide range of fundraising causes and initiatives. Empowers users to rally support for various personal, charitable, and entrepreneurial endeavors.	– Serving diverse customer segments broadens the user base. – Customized platform features cater to specific fundraising needs. – Provides a versatile platform for various fundraising causes. – Empowers users to rally support for personal, charitable, and entrepreneurial initiatives.
Distribution Strategy	GoFundMe’s distribution strategy relies on its website and mobile app. Users can access GoFundMe’s platform directly through its website and mobile applications, ensuring accessibility across devices. The company also encourages users to share their fundraising campaigns through social media channels to expand their reach organically. Additionally, GoFundMe employs email marketing and partnerships with media outlets and influencers to promote campaigns and attract donors.	Utilizes its website and mobile apps for direct access to its crowdfunding platform, catering to users’ device preferences. Encourages users to leverage social media for organic campaign promotion. Utilizes email marketing for campaign updates and promotions. Collaborates with media outlets and influencers to increase campaign visibility. Leverages partnerships for fundraising initiatives and campaign promotion. Maintains a multi-channel distribution strategy for accessibility and reach.	– Website and mobile apps cater to users’ device preferences. – Encourages users to share campaigns on social media for organic reach. – Utilizes email marketing for campaign updates and promotions. – Collaborates with media outlets and influencers for visibility. – Leverages partnerships for fundraising initiatives and promotion. – Maintains a multi-channel distribution strategy.
Revenue Streams	GoFundMe generates revenue through platform fees, payment processing fees, and optional tips from donors. Its primary revenue streams include: 1. Platform Fees: A percentage fee on the total funds raised on the platform. 2. Payment Processing Fees: Fees charged for processing payments from donors. 3. Optional Tips: Donors have the option to add tips to their contributions to support the platform. These revenue streams collectively contribute to the sustainability of the platform.	Relies on platform fees, payment processing fees, and optional tips as primary sources of income. Earns revenue from a percentage of the funds raised on the platform. Gains revenue from fees charged for processing donor payments. Encourages optional tips from donors to support the platform. Prioritizes these revenue streams for sustaining operations and supporting its business model. Utilizes a commission-based model.	– Platform fees provide a scalable income stream. – Payment processing fees generate revenue from donor transactions. – Optional tips from donors contribute to platform income. – Prioritizes these revenue streams for its business model. – Utilizes a commission-based revenue model.
Marketing Strategy	GoFundMe’s marketing strategy includes online advertising, social media promotion, email marketing, influencer partnerships, and collaborations with media outlets. The company advertises its platform through online channels and social media platforms to reach a broad audience of potential fundraisers and donors. Encourages users to share campaigns on social media to organically promote their causes. Utilizes email marketing for campaign updates and donor engagement. Collaborates with influencers and media outlets to amplify campaign visibility and impact.	Utilizes online advertising and social media promotion to reach a wide audience interested in fundraising and charitable causes. Encourages users to actively promote their campaigns on social media to maximize reach. Utilizes email marketing for campaign updates, donor engagement, and platform promotions. Collaborates with influencers and media outlets to raise awareness and support for campaigns. Leverages partnerships and user-generated content for marketing efforts.	– Online advertising and social media reach a broad fundraising audience. – Encourages users to share campaigns for organic promotion. – Utilizes email marketing for campaign updates and promotions. – Collaborates with influencers and media outlets for campaign visibility. – Leverages partnerships and user-generated content for marketing.
Organization Structure	GoFundMe’s organizational structure includes teams dedicated to technology development, customer support, marketing, partnerships, finance, and compliance. Technology development teams focus on platform enhancements and user experience. Customer support teams assist campaign creators and donors. Marketing teams manage promotional efforts. Partnerships teams collaborate with influencers and media outlets. Finance teams handle financial operations. Compliance teams ensure adherence to regulations. This structure supports platform innovation, customer satisfaction, marketing effectiveness, partnerships, financial stability, and regulatory compliance.	Employs specialized teams for technology development, customer support, marketing, partnerships, finance, and compliance. Prioritizes platform enhancements and user experience through technology teams. Provides assistance to campaign creators and donors through customer support teams. Manages promotional efforts effectively through marketing teams. Collaborates with influencers and media outlets through partnerships teams. Ensures financial stability through finance teams. Ensures compliance with regulations through compliance teams. Supports platform innovation, customer satisfaction, marketing effectiveness, partnerships, financial stability, and regulatory compliance.	– Specialized teams drive platform innovation and user experience. – Provides effective assistance to campaign creators and donors. – Manages promotional efforts effectively. – Collaborates with influencers and media outlets for visibility. – Ensures financial stability and compliance with regulations. – Supports platform innovation and partnerships.
Competitive Advantage	GoFundMe’s competitive advantage stems from its user-friendly platform, inclusivity, reach, trust, and support for diverse causes. User-Friendly Platform: Offers an easy-to-use interface for creating and managing campaigns. Inclusivity: Welcomes a wide range of fundraising purposes. Reach: Leverages social media and email marketing for campaign promotion. Trust: Builds trust through transparency and secure processes. Diverse Causes: Supports a multitude of personal, charitable, and entrepreneurial causes. GoFundMe stands out as a versatile and trusted crowdfunding platform for a variety of fundraising needs.	Derives a competitive advantage from: – An easy-to-use platform for campaign creation. – Inclusivity in fundraising purposes. – Reach through social media and email marketing. – Trust through transparency and security. – Support for a wide range of personal, charitable, and entrepreneurial causes. Stands out as a versatile and trusted crowdfunding platform.	– Offers an easy-to-use platform for campaign creation. – Welcomes a wide range of fundraising purposes. – Leverages social media and email for campaign promotion. – Builds trust through transparency and security. – Supports a multitude of personal, charitable, and entrepreneurial causes. – Stands out as a versatile and trusted crowdfunding platform.

Table of Contents

Origin story

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

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%.

Donations

Some individuals and organizations prefer to donate directly to GoFundMe itself. In this case, the funds are redistributed where appropriate.

Key takeaways:

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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