"If GoFundMe can make money and do good deeds at the same time," says Neal Litvack, the organization's chief marketing officer, "that's probably a good thing."Īt GoFundMe's headquarters in Redwood City, Calif., 60 staffers in jeans and sneakers spend their days the way many other Silicon Valley startup workers do, tapping away at workstations spread out in a 9,000-square-foot, open-plan office inside a gleaming glass-and-steel building set back from a leafy street. The 135-year-old charity, where 90% of spending goes to programs, has only praise for GoFundMe's winning formula. You need a modern Internet company to do that." GoFundMe already channels more than twice as much as the Red Cross, which collected contributions of $604 million last year. "A for-profit in this space will perform better than a nonprofit. "Nobody's been able to really harness the power of the people to raise funds," says CEO Rob Solomon, 49, a UC Berkeley grad who grew up in Manhattan and Miami while his activist mother protested anti-gay-rights proponent Anita Bryant. The one million fundraisers pumping away on the site run the gamut from the Cure Sanfilippo Foundation to disaster relief for victims of the August Baton Rouge floods (6,400 GoFundMe campaigns have raised $11.2 million) to a couple who want help paying for their Prague honeymoon. GoFundMe's brass are unapologetic capitalists who see the profit motive as perfectly aligning with the company's objective: getting more people to give more money more efficiently to a vast array of "personal causes." Because GoFundMe's profits directly correlate with how much money it can persuade others to give away, the business is highly incentivized to increase the total amount people donate to others.
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It also imposes a 2.9% credit card processing fee plus 30 cents per donation. Like GoFundMe, Kickstarter takes 5% of the money it raises, though it doesn't collect if campaigns don't reach their goals.
GoFundMe is more than twice the size of the world's next-largest crowdfunding site, Kickstarter, which focuses on artistic projects and new products. For 2016 GoFundMe is projecting revenue of $100 million and an operating profit margin of more than 20%. Then it took just nine months to hit the second billion and only seven months to move a third billion in donations. In its first five years before the deal it channeled $1 billion in donations. After achieving a reported valuation of $600 million in a July 2015 venture capital deal, it hit a growth spurt. GoFundMe is not a philanthropy it is an increasingly valuable for-profit business prominent on FORBES' 2016 list of next billion-dollar startups. For hosting the O'Neills' appeal, it has reaped more than $100,000. It has also been very good for GoFundMe, which takes a 5% cut of the money raised on the site.
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