GoFundMe, a crowdfunding platform founded in 2010, has started to make some changes in their protocol. These changes were made to help improve the overall look of their brand and help the users that are using their platform. Keep reading to find out what those changes are.
GoFundMe’s Decision to Change
Rob Solomon, GoFundMe’s CEO, states that their crowdfunding sites business model is “insane” — but is actively working. In November, the site announced that it wouldn’t take away a 5% fees of funds in the US. Instead, it would create a virtual tip jar to help increase the funds of the crowdfunding campaigns. This model has expanded to the UK and Canada.
What does this mean? Previously GoFundMe had taken out 5% of the transaction fees to help cover operating costs. However, they felt that this was disadvantageous to their business model. By creating an optional donation box, it helps users feel less pressured when donating to one’s crowdfunding campaign.
“My board of directors didn’t want me to change the model. However, we listened to the market and the customers and found out this was the right way to go,” Solon told CNBC during the Fort Knox podcast.
GoFundMe is funded by donations – now users are given a voluntary option to send a few extra dollars to the site. The site’s fee structure still charges a 5% fee for charities outside Canada and the U.S. and certified campaigns. This is so GoFundMe remain profitable while keeping their business transparent.
“Most of the feedback throughout the years have been, we love crowdfunding on GoFundMe, and while the 5% is fair, we want the money to go towards the cause” Solomon stated. “Upon hearing that, we decided that there’s a lot of good sentiment around the brand that we removed the platform fee and relied on the generosity of the donor community” he added.
Since its creation in 2010, GoFundMe had crowdfunded over $5 billion to national and local causes. For instance, campaigns such as the March For Our Lives (which was made in response to the Parkland Florida school shooting) has received over a million dollars in donations.
For those trying to create a crowdfunding platform, sites such as GoFundMe has made it possible. While making the platform is simple, you’ll need a dedicated SEO, design, and crowdfunding team to ensure that its a success.
“Ever since we launched GoFundMe, we received over hundreds of millions, almost close to a billion of dollars.” he responded “You’ll start to notice the patterns rather quickly. And you know the beauty of the internet is that you can test multiple ways to display that information.”
With sites like GoFundMe, anyone can create a crowdfunding platform and receive donations. But, the user’s cause can actually receive a benefit by using its platforms.
After a few news updates, Solomon has stated that GoFundMe would be creating donation software to send to nonprofits. Basically, with all of the innovations that GoFundMe has made, the site might be able to use their branding and business models to keep their loyal audience onboard.