GoFundMe ... tipping!?

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rjbraun
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GoFundMe ... tipping!?

Post by rjbraun »

Sorry, don't mean to start yet another tipping thread, but I wanted to donate to a family who recently lost a relative (covid19, sadly).

When I went to donate via GoFundMe, I actually got prompted for a tip. I don't recall seeing a tip aspect in the past, though I'm also not a frequent user of GoFundMe. As I don't know the family personally, I don't have another way to support them.

This is the notice I get when I am ready to checkout with my donation:

TIP GOFUNDME SERVICES

GoFundMe has a 0% platform fee for organizers and relies on the generosity of donors like you to operate our service.

The site shows a dropdown option for tip amounts of 5%, 10%, 15%, or "other amount".

I'm pretty put off by this, but it's hardly the bereaved family's fault. The campaign was actually initiated by the pastor of the church where the deceased had worked for two decades.

Based on my quick google search, GoFundMe (GFM) seems to have started soliciting tips, maybe as of last year. Is the Bloomberg article accurate (and unfortunately the paywall prevents full access) -- is GFM really taking no cut for themselves, apart from 30 cents per transaction? That seems pretty surprising, but if they truly are taking nothing (or almost next to nothing), I guess I will need to evaluate whether to tip, and, if so, the amount.

https://www.bloomberg.com/news/articles ... -donations
Jags4186
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Re: GoFundMe ... tipping!?

Post by Jags4186 »

rjbraun wrote: Sat Apr 11, 2020 9:09 pm Sorry, don't mean to start yet another tipping thread, but I wanted to donate to a family who recently lost a relative (covid19, sadly).

When I went to donate via GoFundMe, I actually got prompted for a tip. I don't recall seeing a tip aspect in the past, though I'm also not a frequent user of GoFundMe. As I don't know the family personally, I don't have another way to support them.

This is the notice I get when I am ready to checkout with my donation:

TIP GOFUNDME SERVICES

GoFundMe has a 0% platform fee for organizers and relies on the generosity of donors like you to operate our service.

The site shows a dropdown option for tip amounts of 5%, 10%, 15%, or "other amount".

I'm pretty put off by this, but it's hardly the bereaved family's fault. The campaign was actually initiated by the pastor of the church where the deceased had worked for two decades.

Based on my quick google search, GoFundMe (GFM) seems to have started soliciting tips, maybe as of last year. Is the Bloomberg article accurate (and unfortunately the paywall prevents full access) -- is GFM really taking no cut for themselves, apart from 30 cents per transaction? That seems pretty surprising, but if they truly are taking nothing (or almost next to nothing), I guess I will need to evaluate whether to tip, and, if so, the amount.

https://www.bloomberg.com/news/articles ... -donations
If you want to donate why don't you mail a check instead of tipping a website...
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whodidntante
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Re: GoFundMe ... tipping!?

Post by whodidntante »

If this is someone you know well, you can send money via Venmo or Zelle or something with no processing fee. Of course, that won't show on the GoFundMe page, but I wouldn't care about that.
Normchad
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Re: GoFundMe ... tipping!?

Post by Normchad »

No way, no how am I tipping.

I'm really starting to hate all the go-fund-me stuff out there. Everybody sets them up for everything. In some cases, it's hard to even find what the "need" actually is.

It's just a way to beg for money right? Or to beg for money for your friend, family, etc, right? Very unseemly in my opinion.

there are charges involved. I'm not sure who gets what. I would much prefer to send an actual check and eliminate all the middlemen.

What I really want in life though is an anonymous way to give to charity. I am loathe to give them checks, because I just end up on a bunch of new feel bad mailing lists.
Normchad
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Re: GoFundMe ... tipping!?

Post by Normchad »

Ah, here it is. They do get paid. They don't need tips. They should fix their business model if it's not enough.
GoFundMe is a for-profit company. It charges a 2.9 percent payment-processing fee on each donation, along with 30 cents for every donation. That means if a campaign raised $1,000 through 10 donations of $100 each, GoFundMe would collect about $32. ..
drk
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Re: GoFundMe ... tipping!?

Post by drk »

Everything that goes into a site like GoFundMe costs money: development, hosting, databases, payment processing, security, etc. As I understand it, they do not withhold anything from the recipients of the funds, instead pushing the fees to the donors. It's not unlike a sales tax, if you think about it.
dukeblue219
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Re: GoFundMe ... tipping!?

Post by dukeblue219 »

Normchad wrote: Sat Apr 11, 2020 9:16 pm Ah, here it is. They do get paid. They don't need tips. They should fix their business model if it's not enough.
GoFundMe is a for-profit company. It charges a 2.9 percent payment-processing fee on each donation, along with 30 cents for every donation. That means if a campaign raised $1,000 through 10 donations of $100 each, GoFundMe would collect about $32. ..


The 2.9% is for the card processor, not Gofundme. They used to charge their own 5% fee for personal campaigns but dropped it. Now they only ask for voluntary contributions.

https://www.bloomberg.com/news/articles ... -donations
Last edited by dukeblue219 on Sat Apr 11, 2020 9:22 pm, edited 1 time in total.
TravelGeek
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Re: GoFundMe ... tipping!?

Post by TravelGeek »

Normchad wrote: Sat Apr 11, 2020 9:16 pm Ah, here it is. They do get paid. They don't need tips. They should fix their business model if it's not enough.
GoFundMe is a for-profit company. It charges a 2.9 percent payment-processing fee on each donation, along with 30 cents for every donation. That means if a campaign raised $1,000 through 10 donations of $100 each, GoFundMe would collect about $32. ..
The bulk of that presumably is covering the credit card merchant fees.
Normchad
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Re: GoFundMe ... tipping!?

Post by Normchad »

Well, they are a for profit company. If they can't figure out how to make a profit without begging for tips, maybe they shouldn't be in business.
Jags4186
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Re: GoFundMe ... tipping!?

Post by Jags4186 »

dukeblue219 wrote: Sat Apr 11, 2020 9:21 pm
Normchad wrote: Sat Apr 11, 2020 9:16 pm Ah, here it is. They do get paid. They don't need tips. They should fix their business model if it's not enough.
GoFundMe is a for-profit company. It charges a 2.9 percent payment-processing fee on each donation, along with 30 cents for every donation. That means if a campaign raised $1,000 through 10 donations of $100 each, GoFundMe would collect about $32. ..


The 2.9% is for the card processor, not Gofundme. They used to charge their own 5% fee for personal campaigns but dropped it. Now they only ask for voluntary contributions.

https://www.bloomberg.com/news/articles ... -donations
So their "business model" is essentially identical to the guy that tries to clean your windshield with dirty newspapers?
dukeblue219
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Re: GoFundMe ... tipping!?

Post by dukeblue219 »

Normchad wrote: Sat Apr 11, 2020 9:23 pm Well, they are a for profit company. If they can't figure out how to make a profit without begging for tips, maybe they shouldn't be in business.
They're being as transparent as they can. I don't see the outrage here. They are an intermediary that does fundraising. They take no cut but ask you, just like most charity websites, to help them cover their costs.

If you don't like it, just don't enter anything in the box.

It would be far more offensive to take 5% off the top of each gofundme without telling you, the donor, since they're usually for a family that lost their house, someone with cancer, etc.

This way all the money you give can go straight to the person in need. If you don't want to use Gofundme just send the person Venmo or whatever.
TravelGeek
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Re: GoFundMe ... tipping!?

Post by TravelGeek »

Normchad wrote: Sat Apr 11, 2020 9:15 pm
What I really want in life though is an anonymous way to give to charity. I am loathe to give them checks, because I just end up on a bunch of new feel bad mailing lists.
Perhaps a prepaid Visa or MasterCard debit card might provide the ability to anonymously donate.
Normchad
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Re: GoFundMe ... tipping!?

Post by Normchad »

TravelGeek wrote: Sat Apr 11, 2020 9:30 pm
Normchad wrote: Sat Apr 11, 2020 9:15 pm
What I really want in life though is an anonymous way to give to charity. I am loathe to give them checks, because I just end up on a bunch of new feel bad mailing lists.
Perhaps a prepaid Visa or MasterCard debit card might provide the ability to anonymously donate.
That's a really good idea. /I will look into that. Thanks!
TravelGeek
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Re: GoFundMe ... tipping!?

Post by TravelGeek »

dukeblue219 wrote: Sat Apr 11, 2020 9:26 pm
They're being as transparent as they can. I don't see the outrage here. They are an intermediary that does fundraising. They take no cut but ask you, just like most charity websites, to help them cover their costs.

If you don't like it, just don't enter anything in the box.

It would be far more offensive to take 5% off the top of each gofundme without telling you, the donor, since they're usually for a family that lost their house, someone with cancer, etc.

This way all the money you give can go straight to the person in need. If you don't want to use Gofundme just send the person Venmo or whatever.
Agreed. I am not a fan of most GoFundMe campaigns, but that’s because the cause is often a ridiculous one (IMHO). But operating a platform costs money and most here don’t work for free, I assume. The approach they are taking is a reasonable one and solves a problem. If I supported a cause, I would rather use my credit card at GFM than write a check and mail it to someone.
Last edited by TravelGeek on Sat Apr 11, 2020 9:37 pm, edited 1 time in total.
criticalmass
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Re: GoFundMe ... tipping!?

Post by criticalmass »

rjbraun wrote: Sat Apr 11, 2020 9:09 pm Sorry, don't mean to start yet another tipping thread, but I wanted to donate to a family who recently lost a relative (covid19, sadly).

When I went to donate via GoFundMe, I actually got prompted for a tip. I don't recall seeing a tip aspect in the past, though I'm also not a frequent user of GoFundMe. As I don't know the family personally, I don't have another way to support them.

This is the notice I get when I am ready to checkout with my donation:

TIP GOFUNDME SERVICES

GoFundMe has a 0% platform fee for organizers and relies on the generosity of donors like you to operate our service.

The site shows a dropdown option for tip amounts of 5%, 10%, 15%, or "other amount".

I'm pretty put off by this, but it's hardly the bereaved family's fault. The campaign was actually initiated by the pastor of the church where the deceased had worked for two decades.

Based on my quick google search, GoFundMe (GFM) seems to have started soliciting tips, maybe as of last year. Is the Bloomberg article accurate (and unfortunately the paywall prevents full access) -- is GFM really taking no cut for themselves, apart from 30 cents per transaction? That seems pretty surprising, but if they truly are taking nothing (or almost next to nothing), I guess I will need to evaluate whether to tip, and, if so, the amount.

https://www.bloomberg.com/news/articles ... -donations
GoFundMe operates the website, pays the people who create the website, maintain the website, ensure transactions are secure, and every other expense of operations. They used to charge mandatory fees as their business revenue. They stopped doing this for most donations and are completely transparent. Why be upset with the transparency? Websites cost money, and websites that collect personal information and are compliant with card payment industry requirements for cybersecurity, cost even more money to operate.

If you are offended that they pay to operate the website and would like to see some income in return, then you don't need to use the website. Send a check to your recipient if you feel like donating at all. If you appreciate that they exist and offer a platform that has allowed many people very much in need to receive funding easily, then feel free to contribute a buck or several bucks in return.

Oh, GoFundMe actually sends the full amount of the donation to the recipient after the transparent credit card processing fee, which is a pass through. Compare that to many actual charities like Goodwill with their "administration overhead" that take big cuts out of charitable donations before the end charitable recipient gets the remainder.
Normchad
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Re: GoFundMe ... tipping!?

Post by Normchad »

I have no problems understanding they have bills to pay. And to be fair, they are taking a cut. 2.9% plus 30 cents per transaction. I doubt it really costs 2.9% to do payment processing.


My beef is really about the tipping. And with most tipping, it is a business basically saying, we need you the customer to pay "extra" to make up for what we the business are doing badly. Either not being profitable, or not paying a reasonable wage to employees.

In this case though, to call it a tip is a bit much. What are they doing that is "above and beyond" that is deserving of a tip? Are they providing some amazingly good service? are they better than VENMO, or a check, or just using Visa?
Pomegranate
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Re: GoFundMe ... tipping!?

Post by Pomegranate »

Well, at least they want tip for smth. The latest trend is to tip a random server impacted by bar shutdown every time you drink at home :oops: . And of course they encourage to tip BIG :mrgreen:
TravelGeek
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Re: GoFundMe ... tipping!?

Post by TravelGeek »

Normchad wrote: Sat Apr 11, 2020 9:43 pm
What are they doing that is "above and beyond" that is deserving of a tip? Are they providing some amazingly good service? are they better than VENMO, or a check, or just using Visa?
They are removing the friction that comes with other methods of donating to a cause. If I were to come across a worthy cause right now while sitting on the couch surfing the web or reading my email, it would just take a few clicks after making the decision to contribute to make it happen. If I had to get up, go to my home office, unlock the safe, pull out the checkbook, write a check, then label an envelope, find a stamp, take the envelope to the mailbox... forget it, that generally wouldn’t happen.

If you get hung up on the word tip, just substitute donation. Or voluntary service fee. And if you don’t want to pay it, hey, there is no human looking at what you are doing. There are other sites that use a similar approach, and sometimes I “tip” and sometimes I don’t. My choice. I’d probably more likely bail out of the entire transaction if I was told at checkout time that there is a mandatory $5 fee to cover the expenses of running the service.

What annoys me about GFM is what Many people use it for. 99% of the requests I have receivedI would ignore whether they use GFM or USPS. Unfortunately that is probably also a result of removing friction from a traditional manual process.
Topic Author
rjbraun
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Re: GoFundMe ... tipping!?

Post by rjbraun »

Thanks for all the feedback. I agree with the post(s) that "tipping" is probably not the best word choice, imho, but I do appreciate GFM's transparency and will think about how to proceed.
rjbraun wrote: Sat Apr 11, 2020 9:09 pm As I don't know the family personally, I don't have another way to support them.
As for giving the family money directly, that's not an option as I don't know them personally.
NorCalHiker
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Re: GoFundMe ... tipping!?

Post by NorCalHiker »

Normchad wrote: Sat Apr 11, 2020 9:23 pm Well, they are a for profit company. If they can't figure out how to make a profit without begging for tips, maybe they shouldn't be in business.
One option is a Donor Advised Fund. I opened one for tax reasons after the 2017 tax bill and the anonymity is great.
Topic Author
rjbraun
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Re: GoFundMe ... tipping!?

Post by rjbraun »

Normchad wrote: Sat Apr 11, 2020 9:33 pm
TravelGeek wrote: Sat Apr 11, 2020 9:30 pm
Normchad wrote: Sat Apr 11, 2020 9:15 pm
What I really want in life though is an anonymous way to give to charity. I am loathe to give them checks, because I just end up on a bunch of new feel bad mailing lists.
Perhaps a prepaid Visa or MasterCard debit card might provide the ability to anonymously donate.
That's a really good idea. /I will look into that. Thanks!
I too have sought to give anonymously in the past and have indeed on at least a couple of occasions. Having said that I will add that it took an inordinate amount of time. Admittedly, maybe that was just me.

Both instances involved students, and I was able to identify someone at each school who would help to facilitate the transfer. While I didn't request that the school ask the recipient to acknowledge the gift, both times I got a very nice thank you note from the recipient (with the school serving as the go-between), so I felt quite certain the money arrived intact. In one case, the school even had the student acknowledge receipt of the amount (down to the number of gift cards and their denomination).

viewtopic.php?f=11&t=242501
Invest4lt
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Re: GoFundMe ... tipping!?

Post by Invest4lt »

Normchad wrote: Sat Apr 11, 2020 9:43 pm I have no problems understanding they have bills to pay. And to be fair, they are taking a cut. 2.9% plus 30 cents per transaction. I doubt it really costs 2.9% to do payment processing.
Your doubt is based on what? I’m guessing you have not have dealt with credit card processors. A 2.9% processing fee is quite reasonable. Many processors charge more, usually based on volume and banking relationships.
Iridium
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Re: GoFundMe ... tipping!?

Post by Iridium »

NorCalHiker wrote: Sat Apr 11, 2020 10:33 pm
Normchad wrote: Sat Apr 11, 2020 9:23 pm Well, they are a for profit company. If they can't figure out how to make a profit without begging for tips, maybe they shouldn't be in business.
One option is a Donor Advised Fund. I opened one for tax reasons after the 2017 tax bill and the anonymity is great.
DAFs are great but don't really play in the same space as GoFundMe. DAFs can't be directed to give money to individuals. They can only give to recognized charities.
FI4LIFE
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Re: GoFundMe ... tipping!?

Post by FI4LIFE »

Normchad wrote: Sat Apr 11, 2020 9:43 pm I have no problems understanding they have bills to pay. And to be fair, they are taking a cut. 2.9% plus 30 cents per transaction. I doubt it really costs 2.9% to do payment processing.


My beef is really about the tipping. And with most tipping, it is a business basically saying, we need you the customer to pay "extra" to make up for what we the business are doing badly. Either not being profitable, or not paying a reasonable wage to employees.

In this case though, to call it a tip is a bit much. What are they doing that is "above and beyond" that is deserving of a tip? Are they providing some amazingly good service? are they better than VENMO, or a check, or just using Visa?
As others have stated, they used to charge a flat fee of 5%. So if your friend's sister was in a car accident and you donated $100 on the platform, the family would only receive $95. This information was available on the website, but not readily apparent to the casual donator. I find this more distasteful than asking for a couple of dollars to keep the website going. The "tip" is much more transparent.

I have solicited donations for a coworker through GoFundMe and can tell you that it's ability to raise money is unbelievable. We performed several fundraising efforts for this person, including dinner and entertainment events which took 10's of hours to organize. One email alerting people of the GoFundMe campaign raised 5x the money of all the other efforts combined. It took 10 minutes.

My only word of caution is that I would not donate to a GoFundMe campaign unless I knew the organizer personally and knew them to be trustworthy. There is no system in place to keep that person from keeping the money for themselves and I have seen this happen.
Normchad
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Re: GoFundMe ... tipping!?

Post by Normchad »

Invest4lt wrote: Sat Apr 11, 2020 11:36 pm
Normchad wrote: Sat Apr 11, 2020 9:43 pm I have no problems understanding they have bills to pay. And to be fair, they are taking a cut. 2.9% plus 30 cents per transaction. I doubt it really costs 2.9% to do payment processing.
Your doubt is based on what? I’m guessing you have not have dealt with credit card processors. A 2.9% processing fee is quite reasonable. Many processors charge more, usually based on volume and banking relationships.
My doubt was informed by this: https://www.fool.com/the-ascent/researc ... s-america/

True though, I am not an expert here, and that’s why it’s a doubt. I would think a major platform like GFM could get lower rates.
GuyInFL
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Re: GoFundMe ... tipping!?

Post by GuyInFL »

Normchad wrote: Sat Apr 11, 2020 9:15 pm What I really want in life though is an anonymous way to give to charity. I am loathe to give them checks, because I just end up on a bunch of new feel bad mailing lists.
Donor Advised Funds are great for this.
Schwab and Fidelity have these as well as Vanguard.
drk
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Re: GoFundMe ... tipping!?

Post by drk »

Normchad wrote: Sun Apr 12, 2020 11:05 am True though, I am not an expert here, and that’s why it’s a doubt. I would think a major platform like GFM could get lower rates.
They can't. That's why payment processors are so highly valued by the market: they operate in a de facto oligopoly.
FishTaco
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Re: GoFundMe ... tipping!?

Post by FishTaco »

Normchad wrote: Sat Apr 11, 2020 9:15 pm What I really want in life though is an anonymous way to give to charity. I am loathe to give them checks, because I just end up on a bunch of new feel bad mailing lists.
You might try https://www.networkforgood.com/

I found out about them recently and haven't used them yet, but they allow you to donate to a charity, remain anonymous to the charity, and receive a receipt for your charitable contribution. They charge a 5% fee to the charity, but I figured it would be worth it to avoid all the mailing lists.
Normchad
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Re: GoFundMe ... tipping!?

Post by Normchad »

FishTaco wrote: Sun Apr 12, 2020 6:54 pm
Normchad wrote: Sat Apr 11, 2020 9:15 pm What I really want in life though is an anonymous way to give to charity. I am loathe to give them checks, because I just end up on a bunch of new feel bad mailing lists.
You might try https://www.networkforgood.com/

I found out about them recently and haven't used them yet, but they allow you to donate to a charity, remain anonymous to the charity, and receive a receipt for your charitable contribution. They charge a 5% fee to the charity, but I figured it would be worth it to avoid all the mailing lists.
thanks for the link! That sounds like exactly what I was hoping for. I'll look into it!
mbnc
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Re: GoFundMe ... tipping!?

Post by mbnc »

I've dealt with several payment processors at work. The fee of 2.9%+$0.30 is pretty common in my experience - I know for a fact that Stripe charges exactly that and wouldn't be surprised if that's who GoFundMe uses. Square's fee structure is variable, but that's one of the possible formulas and their others are pretty close.

Other payment processors we've dealt with would take 5% right off the top, so it could be worse. At my company, we just eat it as a cost of doing business, but GoFundMe can't really do that when their whole model is built around taking money from one person and giving it to another.

I find the new model much more transparent than the old one, where they would just keep a certain percentage for themselves without telling the donors. I suppose they could be upfront about the fact that their payment processor is taking a cut, but at least they let you specify how much you want to support them.
dboeger1
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Re: GoFundMe ... tipping!?

Post by dboeger1 »

I think people just need to get used to the idea that being for profit and soliciting tips/donations are not mutually exclusive. Yes, it's a bit unorthodox, but this is hardly the only example in the modern economy. Many social media content creators rely on tips, and in fact, facilitating them with prioritized messages and things like that is one of the main ways certain platforms make money. There are also companies which intentionally run their business at a loss for some time as a marketing tactic to build a following, and can potentially raise money through optional donations, such as the video game distribution platform itch.io. And lastly, there's nothing prohibiting a for-profit company from doing something just because they think it's the right thing. Many for-profit companies match employee charitable donations, offer paid volunteer hours, etc. That's really not any different than what GoFundMe is doing. Sure, asking for money may be a bit odd, but in today's highly dynamic information economy on the Internet, these ideas can sometimes be pretty natural.
Topic Author
rjbraun
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Re: GoFundMe ... tipping!?

Post by rjbraun »

OP here. Still thinking about GFM's business model -- not so much whether it's "good" or "bad", more just what it is.

I wonder if they ask the people running GFM campaigns to also contribute to expenses (i.e., "to tip").

While I've never run a campaign (and don't have any plans to), if I were running one, I think I would actually feel fine and maybe good about using some of the proceeds to pay GFM for their services / assistance. All the more so if the campaign succeeded in raising multiples of my target amount, as seems to happen in some cases.

Of course, I think it would be prudent to be transparent and reference this in the campaign summary. Something like, "all funds raised will go to <whatever cause>, though up to x% may be used to compensate GFM for the use of their fundraising platform (with maybe a reference to how they don't earn any compensation, assuming that is correct)."
criticalmass
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Re: GoFundMe ... tipping!?

Post by criticalmass »

Normchad wrote: Sat Apr 11, 2020 9:43 pm I have no problems understanding they have bills to pay. And to be fair, they are taking a cut. 2.9% plus 30 cents per transaction. I doubt it really costs 2.9% to do payment processing.
Really? What provider do you use that you’ve found to be significantly cheaper? 2.9% plus 30 cents is very reasonable for card not present transactions in general charges, especially including high transaction fee rewards and/or international cards.

It is a tip because they are asking to contribute if you find value in their service. If you don’t then don’t. If nobody does, the website will be out of business forever and you won’t have to worry about it.

By the way, many websites, commercial or not, ask for support to help pay for the site. (Scroll up).
sixty40
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Re: GoFundMe ... tipping!?

Post by sixty40 »

Normchad wrote: Sat Apr 11, 2020 9:33 pm
TravelGeek wrote: Sat Apr 11, 2020 9:30 pm
Normchad wrote: Sat Apr 11, 2020 9:15 pm
What I really want in life though is an anonymous way to give to charity. I am loathe to give them checks, because I just end up on a bunch of new feel bad mailing lists.
Perhaps a prepaid Visa or MasterCard debit card might provide the ability to anonymously donate.
That's a really good idea. /I will look into that. Thanks!
You can also use a donor advised fund such as thru Schwab or other financial firms. They will cut the check to the charity and it’s up to you to indicate who it’s from or just anonymous.
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