GoFundMe
GoFundMe is an American for-profit crowdfunding platform that allows people to raise money for events ranging from life events such as celebrations and graduations to challenging circumstances like accidents and illnesses.[1] From 2010 to the beginning of 2020, over $9 billion has been raised on the platform, with contributions from over 120 million donors.[2]
Type of site
English
GoFundMe, Inc.
Brad Damphousse
Andrew Ballester
May 10, 2010
Active
History[edit]
The company was founded in May 2010 by Brad Damphousse and Andrew Ballester. Both had previously founded Paygr, which is a website dedicated to allowing members to sell their services to the public.[3] Damphousse and Ballester originally created the website under the name "CreateAFund" in 2008 but later changed the name to GoFundMe after making numerous upgrades to the features of the website.[4][5] The site was built off of PayPal's API.[6] GoFundMe was founded in San Diego, California.[7]
In March 2017, GoFundMe became the biggest crowdfunding platform, responsible for raising over $3 billion since its debut in 2010. The company receives over $140 million in donations per month and made 2016 $100 million in revenue.[8] In June 2015, it was announced that Damphousse and Ballester had agreed to sell a majority stake in GoFundMe to Accel Partners and Technology Crossover Ventures. Damphousse and Ballester stepped down from the day-to-day oversight of the company. The deal valued GoFundMe at around $600 million.[9] In January 2017, GoFundMe acquired CrowdRise.[10] GoFundMe's CEO is Tim Cadogan.[11] Ballester remains on the board of directors and holds an undisclosed stake in the company.[12]
Business model[edit]
During this process, members can describe their fundraising cause and the amount they hope to raise, and upload photos or video.[13] Once the website is created, GoFundMe allows users to share their project with people through integrated social network links (Facebook, Twitter, etc.) and email. People can then donate to a user's cause through the website using a debit card or credit card[14] and track the funding. Those who donate can also leave comments on the website. The person raising funds is not charged.[15] Payment processors collect 2.9% and $0.30 from each GoFundMe transaction.[16]
GoFundMe is unique to crowdfunding in that the company is not an incentive-based crowdfunding website. Although it does allow projects that are meant to fund other projects for musicians, inventors, etc., the business model is set up to allow for donations to personal causes and life events such as medical bills.[17][18][19] GoFundMe also has a special section dedicated solely to users who are trying to raise money to cover their tuition costs.[1] A prominent tuition project helped a user raise $25,000 for an out-of-state tuition to a PhD program.[20] A 2014 tuition project raised over $100,000 for a homeless high school valedictorian to attend college and help his family.[21]
GoFundMe targets social media platforms to create awareness for campaigns, and encourages individual users to promote their fundraiser on social media throughout a campaign. According to a 2018 report by GoFundMe based on past campaign data, a donor sharing a campaign on social media results in $15 of donations on average, while any share of a campaign on social media, regardless of whether the user donated to the campaign, results in $13 of donations on average.[22]
In 2015, GoFundMe announced that the site would no longer support legal defense funds on their platform, after the site suspended funding for the defense of Sweet Cakes by Melissa, a bakery that was fined for refusing to bake a cake for a same-sex wedding.[23] As of November 2017 GoFundMe's terms and conditions allow for campaigns for certain kinds of legal defense.[24]
In November 2017, GoFundMe announced that it will no longer charge a 5% fee per donation for US, Canada, and UK individual campaigns, and instead rely upon tips left by donors to support the website. The processing fee for online credit card payments will still apply to donations.[25]
In June 2019, GoFundMe terminated a $3 million fund raising for an Australian rugby player, Israel Folau, to finance a court case to appeal his multi-million dollar dismissal. He had quoted 1 Corinthians 6:9–10 on social media, which was said to be homophobic.[26] An alternative fundraising site was set up by the Australian Christian Lobby with the public donating $2 million in 24 hours.[27]
In May 2022, GoFundMe announced the acquisition of non-profit donation site Classy. It was announced that Classy will remain and operate as a wholly owned subsidiary of GoFundMe.[28]
Notable projects[edit]
Medical fundraising[edit]
GoFundMe has described itself as the "leader in online medical fundraising".[29] One in three campaigns is intended to raise funds for medical costs, with about 250,000 campaigns for a total of $650 million in contributions each year.[29][30] This is attributed, in part, to failures in the U.S. healthcare system in which GoFundMe is used to bridge the gap.[29][31]
CEO Rob Solomon has commented on this, saying that "When we started in 2010, it wasn't purposefully set up and built to be a substitute for medical insurance. We weren't ever set up to be a health care company and we still are not. But over time, people have used GoFundMe for the most important issues they are faced with."[30] He also added that the large medical fundraising is the result of severe problems in his country's healthcare system, saying "The system is terrible [...] there are people who are not getting relief from us or from the institutions that are supposed to be there. We shouldn't be the solution to a complex set of systemic problems."[32][33]
Official George Floyd Memorial Fund[edit]
After the murder of George Floyd, his brother Philonise Floyd established the fund "to cover funeral and burial expenses, mental and grief counseling, lodging and travel for all court proceedings, and to assist our family in the days to come as we continue to seek justice for George. A portion of these funds will also go to the Estate of George Floyd for the benefit and care of his children and their educational fund." One week after the tragedy and only four days after the start of the fund, it had already raised $7 million, putting it in ranking as one of the most highly funded GoFundMe campaigns to date.[34]
The $1K Project[edit]
Created by entrepreneurs and investors Alex Iskold and Minda Brusse in response to the novel coronavirus pandemic, The $1K Project uses individual GoFundMe pages to match specific donors with specific families who have been adversely affected by the pandemic. Donors agree to contribute a minimum of $1,000 per month for three months, for a total of $3,000 per family. Small-dollar donors can make contributions that are pooled together and then matched to a family. In August 2020, Andrew Yang's Humanity Forward Foundation committed to matching donations, dollar-for-dollar, up to $1 million. As of mid-October 2020, more than 800 families had been fully funded.[35][36]
Sweet Cakes By Melissa[edit]
In 2015, after the site suspended funding for the defense of Sweet Cakes by Melissa, a bakery that was fined for refusing to bake a cake for a same-sex wedding, GoFundMe announced that the site would no longer support legal defense funds on their platform.[23] As of November 2017 GoFundMe's terms and conditions allow for campaigns for certain kinds of legal defense.[24]
Help Chelsea Manning Pay Her Court Fines[edit]
Created by Kelly Wright to raise money to help former intelligence analyst and whistleblower Chelsea Manning pay $256,000 in court fines levied against her after her refusal to testify to a grand jury about WikiLeaks founder Julian Assange. Nearly 7,000 contributions ranging from $5 to $10,000 were made within two days.[37]
