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Business Operations Business Models

How Does GoFundMe Make Money (Business and Revenue Model)

The GoFundMe business model

How Does GoFundMe Make Money?
Here’s what you should know:
  • What is GoFundMe, and how does GoFundMe work?
  • How does GoFundMe make money?
  • Transaction Fees (Donation Fees)
  • Tips From Donors
  • GoFundMe’s Subsidiaries, Acquisitions, and Exits
  • GoFundMe’s profit and revenue
  • What is the GoFundMe business and revenue model?
  • GoFundMe’s funding and valuation

How does GoFundMe make money? Here is a full, in depth, breakdown of their two (2) revenue streams and the different products and services they offer, as well as the GoFundMe business model, their year over year revenue, and how GoFundMe works.

What is GoFundMe, and how does GoFundMe work?

GoFundMe is a for profit crowdfunding platform that allows individuals, businesses, and charities to raise money for personal reasons and or life events such as medical bills, funeral expenses, and more.

Founded in 2010 by Brad Damphousse and Andrew Ballester, GoFundMe has since helped raise more than $15 billion for organizers through its platform.

How GoFundMe works is: For organizers looking to raise money, they must first create an account by entering in some personal information and how much they would like to raise. Once / if the money has been raised, the person withdrawing the funds must then provide a 1) US social security number, 2) bank account information, and 3) a mailing address in one of the 50 states.

As for donors, no account is necessary. Donors can simply find a cause they would like to donate to, enter in the amount they would like to donate, key in their payment information, and click “Donate now”.

Some of GoFundMe’s competitors include Kickstarter, Patreon, FundRazr, Wefunder, Indiegogo, and other crowdfunding platforms.

GoFundMe App in Apple App Store | GoFundMe Business Model | How Does GoFundMe Make Money? | How Does GoFundMe Work?
Source: Apple App Store | GoFundMe

How does GoFundMe make money?

According to GoFundMe’s 2021 Giving Report, GoFundMe, to date, has helped organizers raise over $15 billion from more than 120 million donors worldwide.

So how does GoFundMe make money off of all those donations and donors?

Below is a breakdown of how much money GoFundMe makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here are the 2 ways of how GoFundMe makes money (in 2022):

GoFundMe has a revenue model that makes money in two (2) ways – transaction fees and tips from donors.

#1. Transaction Fees (Donation Fees)

GoFundMe makes the majority of its money by charging a transaction fee on every donation made through its platforms, GoFundMe and GoFundMe Charity.

As noted above, GoFundMe has helped organizers raise over $15 billion since its founding in 2010. Of which, GoFundMe collects a transaction fee on all of it.

The company offers its donation services to individuals, businesses, and charities. Each charged a different transaction fee, which you can see below.

GoFundMe Fees:

  • Individual / business: 2.9% plus $0.30 of every donation*
  • Charity: 2.2% plus $0.30 of every donation*
GoFundMe Fees | GoFundMe Business Model | How Does GoFundMe Make Money? | How Does GoFundMe Work?
Source: GoFundMe

Note: *The minimum donation amount is $5.

#2. Tips From Donors

In addition to transaction fees, GoFundMe also makes money by accepting tips from donors.

The way it works is; that at the time of the donation, donors also have the option of leaving a tip that goes towards supporting the GoFundMe platform. Below, we attached a gif example of what that looks like along with the tip amounts.

GoFundMe Tip Amount:

  • 0% to 25% of the donated amount
GoFundMe Tip Amount | GoFundMe Business Model | How Does GoFundMe Make Money? | How Does GoFundMe Work?
Source: GoFundMe

Note: Tips are optional and have no minimum.

GoFundMe’s Subsidiaries, Acquisitions, and Exits

To date, GoFundMe, Inc. has made a total of 3 acquisitions.

Acquisitions business model
Source: Crunchbase | GoFundMe

GoFundMe’s profit and revenue

GoFundMe has not reported any official reports in regards to company earnings.

Note: Because GoFundMe, Inc. is a privately held company, they are not required to make their annual reporting, such as Form 10-K’s, pubic.

What is the GoFundMe business and revenue model?

GoFundMe makes money through a few revenue models that they combine within their company, they are:

  • Fee for service (FFS) business model
  • Pay what you want (PWYW) business model
  • Mergers & acquisitions (M&A) business model

GoFundMe’s funding and valuation

According to GoFundMe’s Crunchbase profile, GoFundMe’s last reported round of funding took place back on July 2, 2015, from a Series A round that gave them a valuation of $600 million to $650 million at the time.