GoFundMe Review

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Pros

• World’s largest charitable crowdfunding site
• No more 5% platform fee
• Nonprofit crowdfunding also available
• Can collect funds without meeting your funding goal

Cons

• Poor customer support
• Must give your SSN to withdraw funds
• Some campaigners have trouble withdrawing funds

Overview

GoFundMe: It’s the crowdfunding site whose meteoric rise is a sobering reflection on our frayed times. But what many don’t realize is that GoFundMe can be used to raise funds for business projects as well.

Touting itself as the world’s largest social fundraising platform with over $5 billion raised so far, GoFundMe stands at the confluence of escalating human need and social-media-fueled virality. Launched in May 2010 by Brad Damphousse and Andrew Ballester and headquartered in San Diego, GoFundMe is unique among crowdfunding platforms in that it does not operate on an incentive-based model. A GoFundMe crowdfunding campaign is not required to provide rewards of any kind to its backers, though it certainly can.

While GoFundMe offers the use of its platform to entrepreneurs, businesses, and individuals alike, GoFundMe’s brand is centered on viral charity, with personal and charitable causes accounting for most of the GoFundMe campaigns. In fact, crowdfunding for medical expenses has been a primary factor in the growth of GoFundMe and other crowdfunding sites. In effect, GoFundMe has become a sort of emergency stopgap measure to help plug the holes in America’s skimpy safety net.

While GoFundMe’s focus may be on helping people out of sticky situations, it hosts crowdfunding campaigns for business projects as well.

Considering the role GoFundMe plays in raising money for people in crisis, its 5% platform fee for campaigners had always come under criticism, opening the door for competitors to undercut them with charitable crowdfunding free of platform fees. On November 30th, 2017, GoFundMe announced a big policy change: They no longer charge a 5% platform fee. Initially, this policy only applied to US-based personal campaigns but has since expanded to Certified Charity nonprofit campaigns and to campaigns launched anywhere GoFundMe operates.

Bear in mind that ~3% of what you raise will still go to the payment processor.

In place of the platform fee, GoFundMe added a “tipping” option to all donation pages, hoping that these tips help offset the loss of fee revenue. These tips to GoFundMe are entirely voluntary — when you make a donation, you can choose “Other” in the tipping drop-down menu and enter $0 as your tip and your donation will still go through.

Let’s take a closer look at GoFundMe’s approach to crowdfunding.

Services Offered

GoFundMe provides a platform for users to solicit money from their friends, family, social media followers, and anybody who might be moved to action by their campaign. When you sign up with GoFundMe to set up a crowdfunding campaign, you’ll find that you can fundraise for the following purposes:

• Business & Entrepreneurs
• Medical, Illness & Healing
• Accidents & Emergencies
• Animals & Pets
• Creative Arts, Music & Film
• Volunteer & Service
• Non-Profits & Charities
• Celebrations & Events
• Babies, Kids & Family
• Funerals & Memorials
• Education & Learning
• Sports, Teams & Clubs
• Missions, Faith & Church
• Dreams, Hopes & Wishes
• Community & Neighbors
• Travel & Adventure
• Weddings & Honeymoons
• Competitions & Pageants
• Other

Essentially, as long as you don’t encroach on GoFundMe’s forbidden territory (see below), your campaign has a place on the site. You might note that the majority of categories given have to do with need-based causes. However, businesses and entrepreneurs can use GoFundMe for crowdfunding as well.

Numerous examples can be found in GoFundMe’s campaign lists of successful business project campaigns, from two students who used GoFundMe to raise $3K for their socially-minded waffle cookie company to a San Francisco restaurant that raised $50K to get out of debt to the veteran who raised $2K to start his own motorcycle repair shop. GoFundMe may be best known for crowdfunding campaigns related to personal/medical tragedies, but businesses folks can successfully use the platform as well.

Business Qualifications

GoFundMe is deliberately permissive regarding the sorts of campaigns it allows on its site. That said, there are a number of terms a campaign must comply with:

• No illegal activity
• Nothing fraudulent or misleading
• No controlled substances or related paraphernalia
• No weapons
• Nothing to do with investments, equity contracts, money service businesses, debt collection, or crypto-currencies
• No gambling
• No promoting hate, violence, harassment, discrimination, terrorism, or intolerance
• No dealing with entities under US sanctions
• No human trafficking/ransom/exploitation
• No porn
• No “offensive, graphic, perverse or sensitive content”
• Nothing in defense of or in support of anyone alleged to be involved in criminal activity
• No offering monetary rewards/gift cards
• No transactions for the sale of items before the seller has control or possession of the item
• No collection of payments on behalf of merchants
• No credit repair or debt settlement services

Additionally, in order to launch a campaign on GoFundMe, you must be a citizen of one of the following countries:

• United States (unfortunately, residents of Puerto Rico, Guam, American Samoa, the US Virgin Islands, and the Northern Mariana Islands cannot host a GoFundMe campaign)
• Canada
• United Kingdom
• Australia
• Austria
• Belgium
• Ireland
• Denmark
• Finland
• France
• Netherlands
• Norway
• Germany
• Luxembourg
• Portugal
• Spain
• Sweden
• Switzerland
• Italy

Note: You don’t need to be in one of these countries to donate to a GoFundMe campaign. You can donate from nearly any country on Earth with a few notable exceptions (China, Cuba, Iran, Sudan, Syria, and North Korea).

Terms & Fees

Here are the terms and fees for GoFundMe’s crowdfunding campaigns:

GoFundMe crowdfunding campaigns don’t prompt you to set a funding period. You are prompted to set a funding goal, but you’ll get to keep whatever you raise no matter how much or how little that ends up being. You can keep your campaign active indefinitely, and you can continue to raise money even after you surpass your funding goal. There’s no limit to the amount of money you can raise, either.

On the backer/donor end, GoFundMe makes the pledge that, unlike other crowdfunding sites, they will not charge your donors anything besides the payment processing fee. GoFundMe states on its site “Sites claiming to be ‘100% Free’ will charge your donors up to 15% and you’ll still need to pay 3% for processing. GoFundMe will never charge your donors anything.”

I should note that there are actually two different kinds of fundraising campaign one can conduct on GoFundMe. Most GoFundMe campaigns are considered Personal campaigns. This is something of a misnomer, as Personal campaigns include everything from personal causes to business fundraisers to raising money for a beneficiary. Certified Charity campaigns are fundamentally different. They let you set up a fundraising campaign for a charity of your choosing. Unlike donations to Personal campaigns, donations to Certified Charity campaigns are processed through the PayPal Giving Fund, which is a 501(c)3 public charity. This means that donors get a tax-deductible receipt when they donate and that the Campaign Organizer doesn’t even have to touch the money.

This raises an important point that donors can miss: A donation to a Personal campaign — the vast majority of GoFundMe’s campaigns — is not tax-deductible, as GoFundMe is not a nonprofit entity.

As stated earlier, GoFundMe campaigns don’t require you to offer rewards to donors. However, you can do so, and I’d recommend doing so if you possibly can, as it will increase your likelihood of raising significant amounts of money. You can set as many levels of reward as you want. Note that rewards can only be offered with Personal campaigns.

Other start-up business loan options if you need funds faster:

Application Process

Setting up a fundraising campaign with GoFundMe is simple and self-explanatory. You just enter the details of your campaign, your fundraising goal, and any reward levels you want to offer, and you can get your campaign live within the hour.

One thing I wasn’t thrilled with is that GoFundMe repeatedly and aggressively prompts you to connect your campaign to your Facebook page and to sign up using your Facebook account. In fact, to have your campaign appear in the Public Search Directory, you have to sign up using your Facebook account. This means that if you want your campaign to be publicly featured on GoFundMe’s site — and you almost certainly do — you’re required to have a Facebook account. As a conscientious objector to Facebook myself, I’d prefer that this wasn’t so.

Sales & Advertising Transparency

Though some users have complained about the fees taken by GoFundMe or about having their campaigns removed from the site for violating the terms and conditions, this information is, in fact, disclosed on GoFundMe’s site. It could be displayed in a more accessible way, though — particularly the conditions a campaign must meet in order to qualify for receiving funds.

Customer Service & Technical Support

GoFundMe doesn’t list a phone number to call for immediate support, but it does provide a contact form for getting in touch with customer service. GoFundMe touts its five-minute support guarantee — they promise to respond to your queries within five minutes, which is a faster response time than many rivals provide. Unfortunately, there is no live chat.

Beyond that, the site answers some basic questions about the service in its help pages, though a lot of pertinent information can only be found in GoFundMe’s terms page, the link to which is rather inconspicuously located.

User Reviews

Negative Reviews & Complaints

Reviewers and users of GoFundMe have reported a number of serious issues with the company. A PCMag review of GoFundMe noted that in order to actually withdraw the funds you’ve raised, GoFundMe makes you give them your full social security number. Given the near-daily revelations of massive data breaches targeting our personal information, this is a major point of concern.

Perhaps more concerning are the numerous reports from people who have found it nearly impossible to collect the funds they’ve raised via their GoFundMe campaigns. Some report that when they go to withdraw funds, GoFundMe just responds with repeated requests for more information and that customer service is inadequate to resolve the situation. One user described the customer service thusly: “You can only contact by email and they respond with automated BS messages. You reply to that and then they don’t reply.” Still others report problems with WePay, GoFundMe’s payment processor.

What makes these reports particularly troubling is that they usually come from people dealing with tragedy and already struggling to cope. One would think GoFundMe would have an expedited way to resolve such disputes when people’s lives are on the line.

Beyond concerns with GoFundMe’s practices, other studies indicate broader problems with the idea of using crowdfunding sites to alleviate human suffering. A NerdWallet study titled “Seeking Medical Debt Relief? Crowdfunding Rarely Pays Off the Bills” found that the average amount donated to a GoFundMe medical campaign was $80 — better than nothing, certainly, but not enough to make a big dent in the bills for any major medical procedure.

Other dangers may not be apparent to GoFundMe users at first glance. The case of a mother who used GoFundMe to raise funds for a sweet 16 party for her terminally ill daughter illustrates these dangers. Just before attempting to withdraw the funds raised, she was informed that should she do so, she would lose her SSI eligibility, which was her sole means of paying for medical care for her daughter.

This isn’t a problem with GoFundMe per se (though they should attempt to make people aware of such hazards), but it shows how GoFundMe isn’t a panacea for helping those in need.

Positive Reviews & Testimonials

Reviewers have taken note of the positive aspects of GoFundMe as well. That PCMag review mentioned earlier praised GoFundMe’s policy of allowing people to keep what they raise regardless of whether they meet their funding goal, along with the platform’s user-friendliness and its social media integration. Feedback on GoFundMe from users includes many positive experiences as well. Many campaigners have found GoFundMe to have been of great help to them personally.

GoFundMe currently gets an average user rating of 9.5 out of 10 on Trustpilot based on 1,800 reviews, which is quite impressive for a public-facing company doing as much business as GoFundMe.

Final Verdict

GoFundMe has grand ambitions, and for those helped by its particular conception of crowdfunding, it has proven an invaluable resource indeed. However, for the entrepreneurs reading this, I should note that Kickstarter may be a more fitting platform for tech and creative projects, due to a greater level of support provided by the company and a pool of backers more inclined to fund business projects. Of course, Kickstarter is famously selective in deciding what business projects it allows — an entrepreneur rejected by Kickstarter may well sign up with GoFundMe and have a successful campaign.

For a society that chooses to make one’s ability to receive needed medical care contingent on one’s ability to pay — even if one is a child — GoFundMe is far from a comprehensive solution to the yawning chasm of human suffering in our fair land that grows wider by the day as trickle-down atomization takes its ceaseless toll.

I would be remiss, however, if I didn’t acknowledge that for those who have used GoFundMe successfully to cover the costs of emergencies and tragedies, the platform has been a godsend. Due to the fact that there are numerous such cases, the folks at GoFundMe should be recognized for their efforts to promote viral charity. Furthermore, GoFundMe’s decision to waive the 5% platform fee signals a willingness to respond to the needs of users. However, as some of the horror stories show, it would behoove GoFundMe to be a bit more attentive to those who have been forced by cruel circumstance to rely on its crowdfunding platform to cope with the unthinkable.

At this point, we kind of have to root for GoFundMe. Any one of us may be forced to rely on them for survival someday.

Other start-up business loan options:

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