If you’ve recently started a new business, the first question that comes to mind probably isn’t “How does GoFundMe work?”
After all, you may be looking to raise capital, not raising funds for charity.
However, even though you may know about GoFundMe as a platform for charitable fundraising campaigns, it can also be a useful tool to raise money for entrepreneurs and small business owners.
And capital is the lifeblood of any company.
According to the National Small Business Association, nearly 30% of businesses fail because they’re not able to secure the funds that they need.
Raising money can be a daunting task.
The prospect of having to pitch to a room full of investors may not be appealing.
Fortunately, crowdsourcing tools like GoFundMe allow you to conduct your own crowdfunding campaign from the comfort of your computer.
According to Crowdfunding.org, “Crowdfunding is a way to raise money for an individual or organization by collecting donations through family, friends, friends of friends, strangers, businesses, and more.
By using social media to spread awareness, people can reach more potential donors than traditional forms of fundraising.”
With this complete guide to GoFundMe, you can determine whether it’s the right platform to help you meet your fundraising goals and get your business off the ground.
What Is GoFundMe?
GoFundMe is a free crowdfunding site that helps you to meet all of your business and personal fundraising goals.
The company, founded in 2010, is based in San Diego.
The company website, www.gofundme.com, states that “your inspiration should be shared with everyone” because “that’s how change happens.”
There are more than 50 million donors on the site, based around the world.
Organizers have raised more than $5 billion in funding to date.
The company relies on three primary principles:
- Trust
- Speed
- Reach
The company has a Trust and Safety customer support team that helps prevent scams and achieve the GoFundMe guarantee for donors.
Donors can trust that their donation is safe and that it goes to the right place.
If something isn’t right, donors will receive a refund.
The company works around the clock to prevent fraud.
Additionally, campaign organizers will find that they can withdraw funds instantly.
GoFundMe does not place a hold on funds.
Lastly, GoFundMe helps organizers increase their outreach by connecting with their social network.
How Does GoFundMe Work?
The process of setting up a GoFundMe account is rather straightforward.
First, you start by creating your account. You can do this using your existing Facebook login or with your email address.
Then, you start your campaign by setting a goal for your fundraiser.
After that, you’ll write a description that tells your story to others.
You can then add pictures and videos to help establish a more personal connection.
After you’ve set up your GoFundMe page, you’ll want to share it across your social network.
You can send emails and text messages to friends and family members while also blasting a link to your campaign page across social media.
You can share it to your Facebook page, create an Instagram post, or send a tweet to your followers.
Once your donations start to roll in, GoFundMe makes it easy for you to process and manage payments.
You can accept donations, withdraw them to your linked bank account, and thank donors directly from your GoFundMe account.
How Much Does GoFundMe Cost?
GoFundMe is different from other crowdfunding sites because it does not charge a platform fee.
This fee means the parent company takes out roughly 5%-10% of each donation.
This is on top of the processing fees that companies charge so that they can process credit card payments.
GoFundMe made the switch to no platform fees in April 2018.
At the time, CEO Rob Solomon said, “We decided that there’s such good sentiment around GoFundMe the brand that we could remove the platform fee and rely on the generosity of our donor community.”
So what is the exact fee structure for GoFundMe?
There is a 0% platform fee for any personal campaign.
As a small business owner, any funds that you raise for your company would fall under the umbrella of “personal campaign.”
The only type of fundraiser that does not fall under this category is Certified Charity campaigns.
A Certified Charity campaign is one that an individual or group sets up on behalf of another charity.
For instance, imagine that you’d like to raise money for your favorite non-profit animal shelter on your birthday.
You can set up a Certified Charity campaign so that the funds go directly to the non-profit of your choosing.
These types of campaigns are the only type of fundraiser subject to a platform fee of 5%.
The only charge that donors are subject to is the payment processing fee.
As mentioned, this is the fee that payment processors like PayPal charge to run credit and debit card payments.
The GoFundMe transaction fees tend to vary by country.
In the United States, this fee is 2.9% of the total plus 30-cents per donation.
So, for instance, if someone donates $100 to your company, the transaction fee would be $2.90 + $0.30 = $3.20.
You would receive $96.80.
GoFundMe says that payment processors withdraw these fees in real-time.
This means that the campaign organizer is not required to pay anything.
How Much Does GoFundMe Take?
You can fundraise on GoFundMe for just about anyone and any cause.
You can raise money for yourself, family, friends, or strangers.
Campaigns commonly found on GoFundMe range from medical bills for cancer treatment to those for high school sports programs, and everything in between.
Unlike other crowdfunding sites, which have time limits to their fundraisers, GoFundMe campaigns never expire.
The campaign exists until you remove it or turn it off.
There is no limit to the amount of money that you can earn through this online fundraising site.
Additionally, GoFundMe will not punish you if you don’t reach your fundraising goal.
Other sites will not allow you to access your donations until you meet 100% of your goal.
This is not the case with GoFundMe.
You can access your funds whenever necessary, even if you haven’t hit your target yet.
Donors can also continue to contribute until you are well over your goal.
Tips on How to Get My GoFundMe Noticed
If you are a first-time campaigner curious about how to get your GoFundMe noticed, you’ll want to consider some of the following tips.
Draft a Quality Page
One of the best things that you can do to get your GoFundMe noticed is to draft a quality account page.
Start by coming up with a useful title.
The title should be something that tells a shareable story.
When people see this title, they should immediately want to click on your page to learn more about your cause.
Furthermore, you’ll want to include relevant details but also keep your page brief.
For instance, you’ll want to include things such as the first and last name of the beneficiary and why you’re raising funds for that person or company.
But, you also want to make the summary skimmable and easy to read.
Set and Adjust Your Goal
You should set a reasonable goal when starting your campaign.
You can always increase your goal after the fact if you realize that you don’t have enough money.
As such, it’s better to start small and gain some momentum to your campaign.
Doing so can increase “buzz” and attract other donors.
If your campaign is not going well, you can dial back your goal as well.
You should also make sure that you include a breakdown of funds in this goal.
This will make clear to donors what their money is going to, which helps with the reliability of your campaign.
Garner Coverage
Fundraisers can spread like wildfire across social media.
Hire a press-release service to draft a short write-up about your campaign.
This will give your campaign credibility and will make it appear more legitimate to investors.
Get Started With GoFundMe Today
An influx of capital could be what you need to take your company to the next level.
If that’s the case, consider starting a GoFundMe campaign today.
This crowdfunding platform is one of the easiest to use and will connect you with a broad array of donors that can help you meet your fundraising goals.
Also, be sure to check out other fundraising platforms like Kickstarter and Indiegogo, especially if you are involved with art or tech.
These crowdfunding sites are a bit more specific than GoFundMe and are geared to those conducting creative campaigns.
Regardless of which site you use, you should find yourself running a successful crowdfunding campaign in no time.
