Money is a big deal, right?
Be it to sustain your education, or to support a non-profit organization, or to aid a cancer patient, or give your contribution to a big cause. Money is a big deal.
What if I tell you that fetching money for any of these causes, amongst a lot of others, isn’t as huge a task as it used to be? What if I tell you that all you need for soliciting these funds, once you know how GoFundMe works, is to create a page on a crowdfunding site like GoFundMe?!
Apart from aiding numerous victims and helping multiple people realize their dreams by enabling them to solicit funds, these crowdfunding platforms also earn profits and sustain themselves through their innovative business models.
Let’s take a look into the business model and working of the leading name in crowdfunding, GoFundMe.
What Is GoFundMe?
GoFundMe is an online fundraising and crowdfunding platform. What can GoFundMe be used for: People use it to raise money for medical bills, tuition, memorials, and personal emergencies by setting up their own donation pages. The company calls itself the largest fundraising platform in the world, and its company-reported figures back up the scale: more than $40 billion raised since 2010 from a community of over 200 million people and organizations, with over $50 million donated every week. Part of how GoFundMe works is that it charges no platform fee, though a transaction fee of 2.9% plus $0.30 applies to each donation on US personal campaigns.
GoFundMe is based in Redwood City, California. Brad Damphousse and Andrew Ballester founded it in May 2010 to let users build their own fundraising pages. The company is privately held and publishes no annual revenue.
GoFundMe Business Model
GoFundMe used to take a percentage cut of personal campaigns. In 2017, user feedback pushed the company to drop that fee. Users said every dollar should reach the cause, and the company listened. Campaign owners keep what they raise now.
GoFundMe never became a nonprofit. It stayed for-profit, and it now runs on optional donor tips, a model that works just like Wikipedia. Donors can set that tip to any amount, including zero. A transaction fee on each donation covers payment processing, and organizers pay nothing to start a fundraiser.
Then-CEO Rob Solomon said in 2018 that tips alone kept the business profitable. GoFundMe is privately held, and it publishes no detailed revenue. That profitability claim cannot be checked from outside the company.
The consumer platform is only half the business. GoFundMe also runs GoFundMe Pro, an enterprise fundraising arm for nonprofits. The company’s own guarantee policy names “our GoFundMe and GoFundMe Pro platforms.” Its pricing page describes Pro as “Exclusively for nonprofits.” Pro used to be Classy. GoFundMe acquired it in 2022 and rebranded it in 2025, a shift a vendor comparison covers. A competitor review confirms that Pro is sold at custom, non-public pricing.
How Gofundme Works?
GoFundMe can be tagged as a marketplace for crowdfunding campaigns which connects two segments –
People Who Require Funds
Anyone who wishes to raise funds for any cause, be it personal or public, can create a campaign on GoFundMe and promote it to receive donations. GoFundMe does not use any kind of All Or Nothing algorithm, which means any amount of donation made to a campaign goes to the campaign generator’s account.
You can create a campaign on GoFundMe for any of the following causes:
- Medical
- Emergency
- Memorial
- Education
- Charity
- Non-profit organization
Here’s how you can start your own campaign on GoFundMe:-
- To begin with, you have to sign up with GoFundMe with either your e-mail or your Facebook account. The actual procedure begins after this. Fundraisers can have up to 5 active campaigns on one account at a time.
- After signing up, you are asked to give details about your campaign, choose the category under which your campaign lies, mention who are you raising funds for, whether you will be fundraising individually or as a team and finally, the goal of donations you expect/ aim to receive.
- Up next, you have to add a cover picture (or video) which describes your campaign and the cause behind your call for funds.
- The next step includes writing your entire story. This should preferably be open and descriptive and include a bit about who you are, what you’re raising funds for, and how the money will be spent.
- Finally, you have to share your campaign so that it reaches the maximum amount of people and can attract major donations. Facebook, e-mail or any other personal connectivity will help share the campaign and make it successful.
Here is an example of an ongoing fundraising campaign on GoFundMe:
People Who Are Willing To Help By Sending Donations
Donors pick the campaign they want to support and give whatever amount they wish. GoFundMe’s GoFundMe Giving Guarantee covers every donation for one full year. In the rare case something isn’t right, donors get a full refund. Donations are processed by payment partners, held, then released to the named beneficiary, according to the GoFundMe safety page.
Giving takes just a few minutes. Donors fill in a donation form with their name and payment details, and the money goes to the campaign.
Donors also weigh how much they can trust the platform. In 2025 and 2026 GoFundMe faced criticism after reports it auto-created donation pages for over 1.4 million charities without their permission, as detailed by the New Jersey Attorney General’s office. GoFundMe has committed to making nonprofit pages opt-in only, removing existing pages from Google results, and disclosing tips more clearly, according to a Givebutter comparison.
How Does GoFundMe Make Money?
Before 2017, GoFundMe kept 5 percent of every dollar raised on its platform. Donors also paid a processing fee of about 2.9 percent per donation plus 30 cents.
The platform fee then disappeared for personal campaigns in the US, Canada, the UK, and most major European countries. In 2017 the company announced a 0 percent platform fee for those campaigns. GoFundMe’s current pricing page lists no fee to create or manage a fundraiser in any market.
A transaction fee still comes off every donation. GoFundMe’s Trust and Safety page calls it the only fee on the platform. In the US that fee runs 2.9% + $0.30 per donation. Certified nonprofits pay 2.2% + $0.30. The fee covers payment processing and the transfer of funds.
In place of a platform cut, how GoFundMe works is leaning on optional tips. Donors see a tip prompt at checkout, and those tips are how GoFundMe makes money on free campaigns.
Transaction fees vary by country and by the organizer’s certification status. Current rates:
Country | Platform Fee | Transaction Fee |
United States (personal) | 0% | 2.9% + $0.30 per donation |
United States (certified nonprofit) | 0% | 2.2% + $0.30 per donation |
European Union (personal) | 0% | 2.9% + €0.25 per donation |
European Union (certified fundraiser) | 0% | 1.9% + €0.35 per donation (VAT included) |
GoFundMe complaints focus on how the tip prompt looks at checkout. A March 3, 2026 letter from 21 state attorneys general describes the suggested tip as pre-selected, set at about 16.5%. A class action complaint filed August 6, 2026 in the Northern District of Illinois alleges the default tip is 17.5%. That case, Donovan et al. v. GoFundMe, Inc., remains pending.
GoFundMe disputes both accounts. In its March 2026 response letter to California Attorney General Rob Bonta, the company says donors can set the tip slider to 0% or raise it, that most adjust the suggested amount, and that many leave no tip. It also says a clear breakdown of donation, optional tip, and total appears before payment, and that tipping never changes what the beneficiary receives. That position was reported by The Independent in September 2026.
Future Of GoFundMe?
GoFundMe’s track record is hard to argue with. Here are a few of its most successful campaigns and the amounts raised:
- Support Victims of Pulse Shooting: $7,854,290
- The Official Sacred Stone Camp: $3,133,910
- March for Our Lives: $3,586,650
- Veterans for Standing Rock: $1,155,660
- Tree of Life Synagogue Victims: $1,181,758
- Save Benny and Josh: $1,249,490
- MATW Africa Project with Ali Banat: $1,204,532
- Houses For Rohingya Refugees: $2,105,210
Those campaigns showed what can go fund me be used for and built the platform’s reputation. The 2026 record is what will decide its future.
On March 3, 2026, a 14-day demand letter went to GoFundMe from 21 state attorneys general and charitable regulators, co-led by California. The bipartisan coalition said the platform had built donation web pages for over 1.4 million charities without their consent. It also said GoFundMe prompted donors to add a tip of about 16.5%, paid directly to GoFundMe rather than the charity.
The coalition demanded proof that all unauthorized pages were removed. It also demanded disclosure of where the donations actually went, an explanation of how those pages stayed below charities’ official sites in search results, and a review of whether tips should be redirected to charities. New Jersey Attorney General Jennifer Davenport said a trusted platform “should be transparent and up front about its product.”
GoFundMe answered on March 13, 2026 in a response letter to California AG Rob Bonta. The company defended the model: tips can be set to 0%, they are clearly disclosed as going to GoFundMe instead of the charity, and it is willing to meet with the states.
The states were not the only source of GoFundMe complaints. In August 2026, a federal class action (Donovan et al. v. GoFundMe, Inc., N.D. Ill., 1:26-cv-09423) alleged the same default-tip design is deceptive.
One law-firm analysis warns that state investigations are likely to follow. It also flags the undisclosed donor-advised-fund structure behind GoFundMe’s charitable giving.
Here is the stake: if regulators or courts force GoFundMe to send default tips to charities, how GoFundMe works — the revenue model this article explains — changes fundamentally. GoFundMe still publishes milestone figures like its 2025 results. Whether that model survives the legal pressure is the real open question.
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