GoFundMe is an international crowdfunding platform that allows individuals and groups to raise money for a wide range of events, from threat of foreclosure, responding to a natural disaster or seeking funds to respond to a medical emergency.
Unlike other crowdfunding platforms like Kickstarter, there is no expectation of repaying donors for their contribution, it is simply a way for friends and family – or complete strangers – to donate money in a time of need. There is also no requirement to raise the full amount to actually be eligible to collect the funds raised.
Established in 2010, the platform has since raised over $5billion for over two million different campaigns, averaging over $140 million in donations every month. The platform didn’t launch in Australian until 2016, but since then Aussies have donated over $200million to more than 100,000 campaigns, making Australia one of the fastest-growing and generous countries in the world.
How does GoFundMe work?
GoFundMe allows people to effectively create their own mini-website to which a donation platform is attached. In a matter of minutes, members upload some pictures, write a paragraph or two about their cause or situation and list the amount of money they hope to raise.
It is easily integrated with social media networks, meaning the campaigns are easily shared on Facebook and Twitter, as well via messenger and email.
People who want to donate simply click on the ‘donate now’ button and donate using a debit or credit card. They can choose to include a message of support or remain anonymous. A tally in the corner of the page tracks the donations, and organisers can easily send thank you notes and messages directly from the interface to donors.
In short, it is a very effective, user-friendly platform that allows individuals to raise money quickly for a range of causes.
Who can use GoFundMe?
GoFundMe is particularly suited to individual fundraising, and campaigns can be labelled in a number of categories including medical (help with testing or treatment), memorial (helping with funeral costs), emergency (recovering from a natural disaster). People also request funds to help them meet travel or study goals, to assist with starting a business or making creative works. Couples even use GoFundMe as an online alternative to the traditional ‘wishing well’ at their wedding.
Although there have been changes to their policy over the years on who cannot use the platform (usually based around legal fees and defence costs) there is really no restrictions on who can use GoFundMe. Importantly, there is a team of people working behind the scenes to ensure that causes are legitimate and the donations get to where they’re meant to.
Charities can also use GoFundMe, and many have already set up pages seeking money for a variety of causes. The 0% platform fee applies as do the credit card processing fees.
What can I raise money for?
These are just some of the campaigns able to be hosted on GoFundMe:
- Money to cover costs for medical treatment or testing, medical evacuation from other countries or to repay medical debts from accident injury overseas.
- Funds to pay for customised wheelchairs, mobility aids or cars, assistance animals.
- Funeral expenses, setting up a memorial fund or scholarship, end of life care.
- Raising funds for charity, purchasing equipment for hospitals and research facilities, volunteer programs.
- Paying tuition costs, help with living expenses, student excursions, playground upgrades, fun run sponsorship.
- Developing apps, establishing a business, product development.
- Recovery and accommodation costs after natural disaster, rebuilding and replacement costs.
How much does it cost?
GoFundMe is free for users in Australia, the US, UK and Canada. This means it does not cost anything to set up a campaign and no fees are taken from the amount raised.
In the past, GoFundMe would charge a 5% fee of all donations, in effect reducing the amount of money raised by 5%, but this was dropped in 2017 and has now been replaced by voluntary donations by donors.
Interestingly, the default suggested ‘donation’ seems to be around 15% of your payment, so a donation of $250 would have a suggested donation of $37.50. You can manually change this to any amount you want, including $0. The fee is voluntary but goes towards maintaining the technology and security on the site, including the GoFundMe donor guarantee which protects donors from scams.
15% is more than double the service fees of other comparable crowd-funding platforms, and before the change, in 2016 it was reported that GoFundMe received over $100 million in revenue. GoFundMe is still profitable after the change to the ‘virtual tip jar’, so keep that in mind when you select an amount to donate to the platform.
It’s also important to know there are still payment processing fees, so payments can be processed and verified by a third party payment processor. In Australia*, these are non-negotiable and equate to 2.2% of the donation plus 30c. Therefore a donation of $100 would have a processing fee of $2.50 added to it.
*Processing fees are slightly different depending what country you are in. In the US the fees are 2.9% plus 30c