Crowdfunding transformed the ways that we raise money for specific causes. Companies would often run fun events, like concerts, auctions, or competitions that would help them to raise money for charitable organizations. Non-profits would use these ideas to help them meet their budgetary needs. GoFundMe made it possible to reach out online to raise these funds without the administrative expenses of hosting an event.
The process of GoFundMe is rather simple. When the site became a reality in May 2010, people could put up a campaign which allowed them to raise money for a specific cause. Then they could use their social platforms, digital networking, and other forms of outreach to encourage almost anyone in the world to make a donation.
Companies are not the only ones who can raise money on this site. Individuals can start a campaign for virtually any purpose as well. That makes it possible to raise money for unexpected expenses, medical bills, and other issues that might normally drive someone toward bankruptcy.
There are plenty of advantages and disadvantages to consider, so here are the pros and cons of GoFundMe to look at if you’re thinking about starting a campaign today.
List of the Pros of GoFundMe
1. It is the only site with a funding guarantee.
When you choose GoFundMe, then your donation is protected. As the site says, “It takes a leap of faith to help someone else.” If something isn’t right with the campaign that you choose to fund for some reason, then you’re going to get your money back. The platform also works hard to ensure that the beneficiaries of each crowdfunding effort receive the funds that people are donating to them. If the money isn’t delivered to the correct person, then the company will donate the missing amount. There are some restrictions and requirements that apply.
2. You receive the donations quickly on this crowdfunding platform.
GoFundMe works hard to ensure that the communities, families, and individuals who require support can receive it quickly. Most organizers can withdraw funds immediately once they come through the donation page. Other platforms place holds on these funds which can last from 7 days, going up to 30 days.
One example of this advantage happened when money was being raised in response to Hurricane Harvey. Over $27 million from individual donors made it to the people impacted by the storm in the first 30 days of the campaigns being run to support them.
3. It offers you access to useful fundraising tools.
One of the unique elements of GoFundMe is that it is a social experience just as much a fundraising one thanks to the tools that are available to campaign organizers. There is a mobile app available that makes it simple to share and donate wherever you have a data connection. Sharing functions integrate with Facebook so you can contact your entire network about your campaign with only a couple of clicks. There are options for beneficiary management, team fundraising options, and even a way for people to leave notes about what they think or feel to help the entire process be highly therapeutic.
4. There is a 0% platform fee associated with GoFundMe.
When you start a campaign on GoFundMe, then you are not charged a platform fee when creating a personal campaign. This advantage applies to those who start such an effort in U.S., Canadian, or British currencies. Some European countries gain this advantage as well. There is a standard transaction fee of 2.9% plus $0.30 which applies to all credit and debit card donations that you receive.
Although that means you are paying 2.9% (and some extra) to receive your funds, it is still competitive when compared to the platform fees and transaction costs that other platforms like GoFundMe charge when transferring money.
5. There are never any time limits or deadlines for campaigns.
When you choose to use this platform for your crowdfunding activities, then there are never any time limits or deadlines that you need to worry about to receive your funding. If people send money to you, then you’ll get to withdraw it so that whatever needs you have can be quickly met. Your campaign stays live until you make the decision to turn off donations or removing the listing altogether. Many people choose to let their campaigns stay active because it allows them to refer back to the support they received when they were struggling.
6. GoFundMe does not require you to meet any goals.
Reaching a specific goal for your campaign is never required if you’re trying to raise money for a personal or charitable cause. You will keep every donation that you receive (less the credit card processing fees). Your campaign still receives donations after you reach the goal as well, with the progress meter showing people that you received the amount that you want. If you continue to keep the page active, then you will keep having the ability to withdraw money whenever it comes to you in support.
7. It offers a recognizable name in the world of crowdfunding.
There are several crowdfunding platforms available today that people can use to raise funds for a variety of needs. GoFundMe is in a classification with Kickstarter and Indiegogo that people instantly recognize. That can make it easier for some campaigns to receive the funds that they’re trying to raise. Although there isn’t an independent community like other platforms have for sharing purposes, you can still get enough word out about your campaign to raise a significant amount at times.
8. You can raise money for almost anything on GoFundMe.
GoFundMe offers a unique opportunity to fund some strange causes if that’s what you want to do with your money. There are fewer restrictions on the types of campaigns that are valid on this platform compared to others. A 2017 campaign by rapper B.o.B. wanted to prove that the Earth is flat. Someone tried to purchase Dave Grohl with their campaign, and one family even set up an appeal for a family vacation that raised nearly $10,000 for a trip to Disney World.
In total, GoFundMe has helped to raise over $2 billion for personal causes that have helped most people take care of medical debt, save lives, or provide for families who suffer an unexpected loss.
List of the Cons of GoFundMe
1. There is no guarantee of success with this platform.
Just because you start a campaign on GoFundMe does not mean you’re going to receive the money that you need. This website has helped to raise more money online for causes than anyone else, but that also means you are dealing with a lot of competition. People must find your campaign page to make the donations that you’re trying to raise for an authorized cause. If no one can find it, or if your social network isn’t very large, then it can be a struggle to generate enough attention to get the funds that you might desperately need.
2. Some countries are not supported right now.
You are eligible to start a GoFundMe campaign in one of 19 countries right now. The complete and current list is available on the platform’s support page at any given time. All of the countries at this time are either in Europe or North America – with the exception of Australia. If you do not live in one of the supported countries, then you cannot create a campaign. Your only option in this situation would be to ask someone from a supported nation to raise the money on your behalf instead.
3. Campaign organizers must meet specific withdraw requirements.
You cannon withdraw money from a GoFundMe campaign if you do not meet specific information requirements. In the United States, that means you must supply an ITIN or SSN, have a valid U.S. mailing address, a phone number based in the country, and a bank account that is in your name. Eligible organizers must be at least 18 years of age. Some countries require a government-issued ID, like a passport or a driver’s license, before you can withdraw from this platform.
4. There is a privacy issue with your SSN for Americans to consider.
You cannot withdraw money from GoFundMe if you do not provide the platform with your Social Security number. The reason for this involves the responsibilities you have for taxes on the money. Although most campaigns treat the funds as a “personal gift” that is usually not taxed as income, there are times when the funds are actually taxable. It depends on how the funds are used, how much you receive, and other unique situations.
Casey Charf raised nearly $50,000 on GoFundMe in 2015, and then discovered that she owed $19,000 to the IRS in taxes. It is essential that anyone who raises a significant amount of funds through crowdfunding consult with a tax professional to determine what their responsibilities in this area will ultimately be.
5. You must build your community on GoFundMe.
GoFundMe wants you to leverage the power of social media to build a community around your fundraising efforts. They offer this suggestion because there isn’t a chance to create one through the platform. Your campaign will send links to your fundraiser when you send messages or embed widgets on your blog or website. You can also create blogs or websites about your efforts to take advantage of optimization efforts. At the end of the day, however, you’re receiving zero support from the team here because you’re using their automated features.
6. There are limited customer service options available.
If you encounter a problem with GoFundMe, then you can only use their contact box that is available on their platform to initiate a customer service issue. There is no way to contact them by phone or in-person to resolve issues. The platform asks that you review their troubleshooting content if you are having problems with your campaign experience for some reason. You must provide them with your bank information to withdraw the funds as well, which may not be suitable for some families.
7. GoFundMe sometimes (reportedly) requires donor identification.
A recent review of GoFundMe on Consumer Affairs notes that donors kept trying to offer money to a charity fund, but their efforts were being denied. The money would just go back to the individuals without an explanation as to why that was happening. Some donors reportedly received emails from the platform asking for a government ID to verify their identity before accepting a donation in the first place, and then refunds were still issued anyone. Although most people can donate with a credit or debit card without much else, there may be times when this may not be possible.
8. Recent changes are not reflected in online reviews.
There was a time when GoFundMe charged a 5% platform fee on the campaigns that were run. That cost has disappeared thanks to disruptors like YouCaring which shifted the emphasis on personal crowdfunding to the individual instead of the fundraising brand. You can still find numerous reviews online that show these costs as a disadvantage when they no longer exist. Make sure that you take the time to read through the current terms of service offered by the platform to ensure that you have the full picture of what to expect.
9. You do not have the option to donate anonymously with GoFundMe.
If you want to minimize your personal imprint on a campaign where you send a donation, it is possible to restrict the general public from seeing who you are. The amount that you send someone will still appear on the primary campaign page, but it will be listed as “anonymous.” The campaign organizer still receives your information when you send a donation. There is no way to hide your information from the organizer and the beneficiary, so you cannot stay completely anonymous with your funding.
The pros and cons of GoFundMe generally balance toward the favorable side as it offers individuals and non-profits an opportunity to raise money when they need it. You will find numerous listings for medical bills, memorial funds, and other unexpected expenses. Although there are a few disadvantages to consider, careful planning can often reduce their impact. If you want a fast and (mostly) free method of fundraising, then this platform can meet your needs.
Blog Post Author Credentials
Louise Gaille is the author of this post. She received her B.A. in Economics from the University of Washington. In addition to being a seasoned writer, Louise has almost a decade of experience in Banking and Finance. If you have any suggestions on how to make this post better, then go here to contact our team.