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GoFundMe is one of the most widely used crowdfunding platforms in the world. However, not much is known about the GoFundMe business model, including how the organization operates to generate money and profit, as well as to keep its business up and running.
In 2021 alone, over 15 million messages of thanks were sent back and forth by the donors who stepped up to help during the global crisis. Not only that, but since 2010, this platform has garnered over $15 billion in donations, solidifying its position as the world’s largest online crowdfunding platform.
For such reasons, we’ve compiled the following article to shed more light on GoFundMe’s business model, including this organization’s history, strengths, weaknesses, competitors, and sources of revenue, just to mention a few.
GoFundMe is a crowdfunding platform founded in 2010 by Brad Damphousse and Andrew Ballester. It was initially intended to be a way for people to raise money for personal causes, such as medical or educational expenses.
The platform quickly gained popularity and has since evolved into one of the world’s largest crowdfunding sites. In addition to personal causes, people can also use GoFundMe to raise money for charitable organizations, small businesses, and other reasons.
GoFundMe has a reputation for being user-friendly and easy to use, contributing to its popularity. It allows users to create a campaign page, share their stories, and accept donations from friends, family, and other supporters. The platform also offers a variety of tools and resources to help campaign organizers reach their fundraising goals.
In 2017, GoFundMe acquired CrowdRise, a charitable fundraising platform, allowing the company to expand its reach and offer more options for people seeking to raise money for good causes.
Today, GoFundMe is a significant player in the crowdfunding industry, with millions of users and dollars raised on its platform. It continues to evolve and adapt to meet the needs of its users, making it a popular choice for people looking to raise money online.
As of 2022, GoFundMe is owned by a group of investors, including Accel, Technology Crossover Ventures, Iconiq Capital, and Stripes Group. Although Brad Damphousse and Andrew Ballester founded the company, it’s yet to disclose any specific ownership details.
According to GoFundMe’s official webpage, the company’s official mission is, “o provide fast and effective support to people impacted by disaster, and to fund education and other charitable initiatives.”
GoFundMe works as a crowdfunding platform where people tell their stories and set a fundraising goal they wish to accomplish. These stories are then shared with friends and social media users through texts, emails, and social media.
This platform allows individuals and organizations to create fundraising campaigns for various causes, such as personal emergencies, medical expenses, and charitable causes.
Here’s how it works:
GoFundMe makes money by charging a fee for its crowdfunding platform services. When someone donates to a campaign on GoFundMe, the company deducts a fee from the total amount. The following are ways through which GoFundMe makes money:
GoFundMe charges a 2.9% + $0.30 fee for every donation made on its platform. This fee covers the donation’s cost and is similar to that of other online payment processors, such as PayPal.
This fee is taken from the donation amount before the funds are transferred to the campaign organizer. For example, if someone donates $100 to a campaign, GoFundMe will charge a fee of $3.20, and the campaign organizer will receive $96.80.
GoFundMe also charges a 5% fee for its services. This fee is separate from the donation fee and is not applied to donations made by the campaign organizer. The platform fee covers the cost of maintaining and improving the GoFundMe platform.
GoFundMe also offers several additional services and features that campaign organizers can use for an additional fee. For example, organizers can use GoFundMe’s “Boosted Campaigns” feature, which promotes their campaign to a larger audience, for an additional fee.
It’s important to note that GoFundMe is not a registered charity and does not provide tax-deductible receipts for donations. Donations made through GoFundMe are considered personal gifts and are not tax-deductible.
The GoFundMe Business Model can be explained in the following business model canvas:
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GoFundMe customer segments consist of:
GoFundMe value propositions consist of:
GoFundMe channels consist of:
GoFundMe customer relationships consist of:
This fundraising platform generates revenue through the following streams:
GoFundMe key resources consist of:
GoFundMe key activities consist of:
GoFundMe key partners consist of:
GoFundMe cost structure consists of:
A SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis is a tool used to evaluate the internal and external factors that can impact a business or organization. Here is a detailed SWOT analysis of GoFundMe:
In conclusion, GoFundMe’s business model has proven to be a successful and popular way for individuals and organizations to raise money for various causes. By allowing users to create and share fundraising campaigns on its platform easily, GoFundMe has become a go-to destination for those seeking to fundraise for personal or charitable endeavors.
While the company charges a small fee for its services, it has also implemented various features and options to ensure donors can give with confidence and trust. GoFundMe’s innovative approach to crowdfunding has made it a valuable resource for those looking to make a difference and achieve their fundraising goals.
Business Model Examples and Types Using the Business Model Canvas for Detailed Analyssis
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