GoFundMe is the world’s largest non-profit fundraising platform started in 2010. Fundraising is one-last trial one could do to generate some funds to treat a cancer patient in his family or pay tuition fees or recover losses due to a tragedy. Isn’t it? Money is a serious (life and death) concern for people who are going through financial hardships. Thankfully, GoFundMe is a friendly social fundraising platform that helps to make a lasting difference in people’s lives. Whether you want some money to pay tuition fees, help a cancer patient for his treatment, support a family who lost their bread-earning member, buy a land to farm on your own, start a non-profit tutoring business, or a personal website, you can create a campaign in GoFundMe and raise money to reach your dreams.
Fundraisers can create campaigns at any time and raise money to cover their losses and for a better future. As said, you can raise funds for right from medical emergencies, helping a family financially, to traveling adventures and start a new creative blog.
Since 2010, GoFundMe has raised more than $9 billions from over 120 million donations. Though it started as a for-profit crowdfunding platform, later in 2017 it turned out as a full-fledged non-profit organization. The change was completely due to customer’s feedback. It even thought running a crowdfunding business for profit would ruin their brand image.
Luckily, now needy people in some of the countries can raise funds and need not pay any commissions for generating funds.
Wondering, then how does GoFundMe make money? What is it’s business model?
Well, let’s see that in detail in this article. Before that let’s see how the largest crowdfunding organization works. Shall we? Then, let’s get started…
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How does GoFundMe Work For
GoFundMe is an American fundraising platform started by Brad Damphousse and Andrew Ballester, and is a great space for running crowdfunding campaigns. It let’s people who require funds to raise funds and donors contribute some money.
Fundraisers
People who need money for a cause can create and promote their campaigns to get donations. The funds directly get deposited into the campaign organizer’s account after it reaches the goal.
It’s simple to create a campaign.
1. You just need to sign up using your email or Facebook account.
2. After signing up, provide details of your campaign, select the category of your campaign, select if you are an individual organizing your own campaign or a team.
3. You need to enter the goal of how much amount you want to raise in the above step itself.
4. Then, add a cover photo video that best describes your campaign and describe the story of your campaign. The story should include who you are, why you are raising funds and how you are going to spend the funds. You should write in such a way that it attracts and convinces the donors to donate.
You can then share your campaign on social media and promote it to gain maximum visibility. So that more donors could see it and your campaign can raise more funds to serve your purpose.
The best part about GoFundMe is that it not only helps individuals who need money but also corporations, non-profit organizations and teams to raise money to run their businesses smoothly.
Donors
GoFundMe is a trusted and secure crowdfunding platform, so that donors can contribute their part safely. It even promised a refund if the campaign is found as spam. Donors can leave comments and support fundraisers along with donating money.
GoFundMe refunds the money to donors if it finds any fraud campaigns. Also, it ensures that the needy receive the funds right away in case any of the team campaign organizers didn’t do that.
To become a donor all you have to do is sign up for GoFundMe and fill details and enter the amount and credit card details to make the payment. The site also asks if you would love to donate some dollars for it to help it voluntarily.
Okay, you have seen how exactly GoFundMe works. Now let’s see what is it’s business model and how it makes money.
GoFundMe Business Model
As said in the beginning of this article, GoFundMe was a for-profit crowdfunding organization in earlier days. It operated with a business model of charging 5% from the funds raised to run the organization along with a payment processing fee of 2.9% and an additional $0.30 for each donation. However, the payment processing fee and additional fee is for securing and processing the payments.
After it received feedback from customers, it changed it’s priorities and became a free platform for crowdfunding. The charges for transactions remained the same but it started charging $0 commission for personal campaigns started in the US, Canada, British and some other European countries. It works under the commission-based business model in Denmark and few other countries. Also, the business model is the same for team campaigns.
So, in short the fee structure of GoFundMe for most of the countries is:
Platform fee: 0%
Transaction fee: 2.9% + $0.30 per donation
The countries where GoFundMe is a free platform is:
- US
- Canada
- UK
- France
- Germany
- Ireland
- Australia
- Italy
- Spain
- The Netherlands
The transaction fee is to enable safe transfer and cover credit or debit card processing. The transaction fee varies from country to country. For example,
It charges 5% platform fee and 2.65% + kr1.80 per donation for campaigns created in Denmark.
However, though people from anywhere in the world can donate to a campaign using a major credit or debit card, it doesn’t charge any extra for currency conversion. The donor’s bank will automatically convert the payments into fundraiser’s currency and charge them.
How does GoFundMe Make Money?
As it’s business model says it is pretty clear that all the money raised goes to the fundraiser in most of the countries. The only way it generates money for itself is through additional tips it asks donors at the end of their transactions. Most of the donors voluntarily donate some extra money while donating to the campaigns.
The company’s CEO Rob Solomon says those donations are good enough to run the business profitably.
So, this is how GoFundMe makes money to run its business.
Is the GoFundMe Business Model Sustainable?
Yes, it takes less for running a non-profitable crowdfunding organization. It anyhow charges for securing and guaranteeing transactions as transaction fee. Also, the little extra bucks doesn’t matter the most for donors when donating for true campaigns, the money keeps coming for it. Therefore, the business model is sustainable.
Talking about the future of GoFundMe, it is the largest fundraising platform that has raised millions of dollars. With it’s most amazing features it remains in the same position even in the coming years.
Some of the successful campaigns that raised huge funds are:
- Time’s Up Legal Defense Fund: $22,067,100
- Las Vegas Victim’s Fund: $11,874,100
- Support Victims of Pulse Shooting: $7,854,290
- March for Our Lives: $3,586,650
Know More About GoFundMe
There are many fundraising organizations, but one can’t deny the fact that GoFundMe is a leader in online fundraising. Let’s see it’s highlight features to better know about it.
Worldwide leader
Not just for it’s GoFundMe Guarantee and safe transfer of donations, GoFundMe is also known for its simple and reliable platform. Also, one could use their funds much efficiently and quickly. Unlike the other organizations that hold the funds for upto 30 days, this amazing platform releases the funds faster.
No Goal Penalties
Fundraisers can withdraw the funds and use them even if their campaign doesn’t meet the goal. Most of the sites refund money to donors if the campaign doesn’t meet the goal. That’s not the case here.
Mobile App
One should be able to access the source whenever and where ever he is to run the campaigns successfully. That’s what exactly GoFundMe does. GoFundMe is available as a mobile app where members can access their accounts from anywhere anytime without any hassle.
Social Reach
GoFundMe does its best to share your campaign to a huge crowd to help you raise more funds.
24/7 Expert Advice
GoFundMe has best-in-class customer happiness agents who will answer you any question you have related to campaigns 24/7.
Bottom Line
As you have made it to the end, hope you have learned the business model of GoFundMe and how it makes money. Not just raising funds, GoFundMe also helps people with fundraising tips and ideas. You can get clear help related to account management, money management, donor questions, safety & security and common issues from their help center. Being the largest crowdfunding platform in the world, it does it’s best to help people from western countries to lead better lives. At present, the platform only lets most of the countries donate but not raise funds. Let’s see how its operations expand to all over the world in the future.
However, as said the site does it’s best to help people raise more funds. GoFundMe lets donors use sharing tools such as inviting donors through email, Facebook and Twitter, adding a GoFundMe widget to a blog or website.
