Oct 12, 2021

How Does GoFundMe Make Money

Funding sites such as GoFundMe, which profit from donations on the platform, are for-profit charities. Platforms make money from fees charged to every party that runs a campaign. They also make money from transaction fees collected when the payments are processed. You may also generate money by way of donations or the GoFundMe platform (a fundraising platform).

Origin story

For-profit crowdfunding platform GoFundMe enables users to raise money online. In 2010, Brad Damphousse and Andrew Ballester launched a service that helped people raise money for personal events such as graduations, celebrations, and other events, such as weddings. In addition, it serves to provide funding for individuals who are ill or injured and need medical procedures. As social media users, Damphousse and Ballester created an early version of GoFundMe called CreateAFund, which allowed them to raise money for causes close to their hearts. As crowdfunding as we know it was only beginning to become mainstream at the time. A new name was adopted for the popular crowdfunding site in 2008. Almost a decade later, in 2017, GoFundMe became the largest online crowdfunding platform, raising over $3 billion since its presence on the web.

GoFundMe revenue generation

It allows users to donate to causes online and earns money whenever someone makes a donation. There are two fees associated with every donation

Fees paid by platform providers – these are fees that are charged by the entity An entity can be an organization, a team, or an The platform fee is 0% for those wanting to start a fundraiser in the UK, Australia, Canada, United States, and practically every country in Europe. Platform fees vary from country to country throughout the rest of the world. Luxembourg, for example, charges 5% as a platform fee.

There is a fee for each transaction, which covers the cost of processing that There is a transaction fee of 2.9% plus 30 cents in the United States. The cost of transactions will vary based on the country in which you operate. With reference to the Luxembourg example, the transaction fee is 1.4% of the donation in euros.

GoFundMe Charity

By engaging with donors, GoFundMe Charity is a powerful online fundraising platform that helps organizers raise more money. The system provides businesses with the ability to access donor and fundraising data in one location and create customized donate buttons and email sequences. Fundraisers can also integrate their fundraising campaigns with platforms such as WordPress, Salesforce, and Mailchimp.

Two subscription plans are available:

The donation price is free, but there is an additional processing fee of 1.9% As a result, 97.5% of the total donation will go to the fundraiser.

In Flex mode, there is a 2.2% processing fee plus 30 cents that provides at least 94.5% of the donation to the organization. It is possible for donors to choose to cover the processing fee, meaning that the organization retains 100% of their donation.

Donations

GoFundMe has a direct donation option that is preferred by some individuals and organizations. Redistribution of the funds is made where necessary in this case.

Key takeaways:

Crowdfunding service GoFundMe lets its users raise money for causes they care about by using social media. Originally, the service was called CreateAFund, and it allowed social media users to raise money through friends and family. Each donation made by a user generates revenue for GoFundMe. Recent changes to the platform fee in countries such as Australia, Canada, and the United States have waived it. The transaction fee varies depending on where the fundraising campaign is located, but every fundraising campaign must pay 2.9%. Besides offering a dedicated service for fundraising campaigns, GoFundMe also offers business fundraising services. In an effort to grow charity through GoFundMe, the company offers a service that helps them create targeted, on-brand messages that can be integrated with popular platforms like

 

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