How GoFundMe Works & Makes Money? | GoFundMe Business Model

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 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 the world’s largest free fundraising and crowdfunding online platform that lets people raise money for events, be it gathering donations for a cancer-stricken family member or soliciting funds to pay for college tuition. With more than 50 million donors, the platform has successfully raised over $6 billion till now.

The company is based in Redwood City and was formed by Brad Damphousse and Andrew Ballester in May 2010 with the aim of allowing users to create their own page to raise money.

gofundme business model

GoFundMe Business Model

Initially started with a for-profit crowdfunding business model, GoFundMe shifted to a non-profit donation-based business model in 2017 after receiving feedback from the users which suggested (and demanded) all of the money to go to the cause.

Earlier, the company used to charge a certain percentage commission from the amount raised on personal campaigns. Since this wasn’t good for the brand’s image, the company decided to shift its priorities and move to a model where it survives with donations (just like Wikipedia)

But what makes this business model worth to ponder about is that according to GoFundMe’s CEO, Rob Solomon, the just donations are good enough to keep the business profitable.

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:-

  1. 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.gofundme sign up
  2. 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.gofundme campaign details
  3. Up next, you have to add a cover picture (or video) which describes your campaign and the cause behind your call for funds.gofundme cover media
  4. 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.gofundme campaign details
  5. 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:

gofundme campaign

People Who Are Willing To Help By Sending Donations

Donors can choose the campaign they want to support and can donate whatever amount they wish to. GoFundMe has a specially assigned Trust & Safety Team which ensures that all campaigns and donations are protected under the GoFundMe Guarantee.

All they have to do is to provide their details to the site by filling the following form and are eligible to donate after successful completion of the form.

gofundme donation form

How Does GoFundMe Make Money?

Before 2017, the company used to take 5 percent of donations raised on its platform, along with ~2.9 percent payment-processing fee collected on each donation, and an additional 30 cents for every donation.


In the present date, everything else rests the same, apart from the company’s decision of 0 percent platform fee that applies to personal campaigns started in US dollars, Canadian dollars, British pounds, and most major European countries. (The business model remains the same commission-based model in some countries like Denmark)

This means that each penny donated on the platform goes only to the fundraiser. In place of the fixed 5 percent cut, the company will instead rely on optional tips to generate revenues from these campaigns according to which, donors are presented with a voluntary option at the end of a transaction to send a few extra dollars to the site.

fees on GoFundMe

For personal campaigns in the following countries, GoFundMe is a free platform:-

  1. US
  2. Canada
  3. The United Kingdom
  4. Australia
  5. France
  6. Germany
  7. Ireland
  8. Italy
  9. The Netherlands
  10. Spain

However, the site charges a standard transaction fee to cover credit card processing and the safe transfer of funds. For all campaigns, industry-standard transaction fees apply and vary depending on the country that the campaign was created in.

Here are examples of the 2 fee structures charged by GoFundMe in different countries:

Platform Fee
Transaction Fee
United States
2.9% + $0.30 per donation
gofundme USA fee
Platform Fee
Other Fees
2.65% (25% VAT & Transaction) +kr1.80 per donation
gofundme Denmark fee

Future Of GoFundMe?

GoFundMe’s business model might seem a bit new to the ears, but it is efficient and up to the expectations of the creators. The company has had a lot of successful campaigns all over these years.

Here are a few of the most successful GoFundMe campaigns along with the huge amounts of money they’ve raised:

  • Support Victims of Pulse Shooting: $7,854,290
  • 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

Launched in 2010, GoFundMe has become a go-to community for more than 70 million donors.

Seeing the success of GoFundMe in 2018 (even after editions in the business model), it can be said that the GoFundMe business model is a sustainable one, and the company has a bright future for itself.

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