Summary: GoFundMe’s tepid disclosure of transaction fees on its donation checkout pages may mean donors might be unaware the full value of their donation isn’t reaching nonprofits.
Last year, many of us in the nonprofit sector remember the mild uproar over the discovery that GoFundMe (along with other nonprofit aggregator websites) had built donation pages for reportedly over 1 million+ nonprofit organizations without those organizations’ explicit consent. Those pages displayed the names of those organizations—and solicited funds on behalf of those organizations—without those organizations’ opt-in. Many fundraisers and nonprofit development professionals reacted in frustration to discovering that their organization had pages created for them without anybody asking to. It sparked meaningful conversations about the power of nonprofit organizations to manage their own brand and fundraising identity. GoFundMe reversed course, but attracted the attention of Attorneys General across the country.
But spending more time evaluating the anatomy of a GoFundMe donation page, other problems persist. GoFundMe has cemented itself as a critical pipe within our national fundraising infrastructure, and as such, deserves careful evaluation when it comes to ethical fundraising best practices.
We’ll go through a donation flow beat-by-beat to evaluate ethical concerns raised by GoFundMe’s current flow, particularly how it relates to tips and transaction fees. For the context of this article, we’ll focus on donation flows for verified nonprofit organizations.
Step 1: Organization Landing Pages
We’ll start with an organization landing page. Here, we can see that the “verified” National Immigrant Justice Center (NIJC) landing page clearly denotes that “donation minus transaction fees will go to the PayPal Giving Fund (PPGF),” as seen below. Spoiler alert: for donors, this is the beginning of the end for explicit clarity around transaction fees when donating to organizations or fundraisers.
As we just hinted, not all the landing pages for organizations are this explicit. Let’s check out the landing page for the American Cancer Society. Nothing on this page mentions the PayPal Giving Fund nor transaction fees.
Step 2: Fundraiser Landing Pages
GoFundMe, of course, mostly revolves around real people fundraising on behalf of organizations or causes. The American Cancer Society, according to its landing page, has had 134k+ fundraisers initiated on its behalf. Let’s check out a fundraiser page for the American Cancer Society. (We’ll remove descriptive components; that’s beside the point.)
Nothing on this page mentions transaction fees or the PayPal Giving Fund. It’s hard to overstate that GoFundMe’s primary currency is these fundraiser pages, which the entire site is designed to encourage the promotion and sharing of. Many people who end up on gofundme.com enter through these pages—as we imagine virtually everyone reading this article has at one point or another.
Step 3: The Donation / Check-Out Page!
The next step is to click “donate now” on fundraisers, which pulls up GoFundMe’s donate / checkout page. Here we see an option to Give One or Monthly, and a donate amount option. Everything seems normal!
Yet this is where it gets interesting. Below those fields we have a header that reads “Tip GoFundMe services.” Below that header we see the statement that “GoFundMe has a 0% platform fee for organizers and relies primarily on the generosity of donors like you to operate our service.” It then has a slider to select a “tip” amount. Mine was automatically set to 17.5%. (Note that some donation pages will allow you to see percentages only, some display percentages and tip amount.)
I want to pause for a second to focus on the tip disclaimer, that “GoFundMe has a 0% platform fee for organizers.”
PAUSE: The above statement is true! It costs nothing for me to set up a GoFundMe page. But GoFundMe’s pricing page makes exceedingly clear that’s not the only fee associated with a donation. For fundraisers run by individuals or businesses, the transaction fee is 2.9%+$0.30. For fundraisers on behalf of a “certified nonprofit” that fee is 2.2%+$0.30.
As if to double down on the point that the full donation amount doesn’t in fact reach the nonprofit, there’s an interactive widget on the pricing page to see how much money actually makes it to its final destination.
Importantly as well, transaction fees appear to be charged on all donations across the platform, per GoFundMe’s terms.
Step 4: Final Checkout
Now that we’ve reached the final step in our checkout process, we enter our credit card information. I’ve decided to enter a donation amount of $5, set the GoFundMe tip to $1, for a “total due today” of $6.00. Notice something?
There is virtually nothing prominent to indicate that my $5.00 donation is anything other than being delivered to the American Cancer Society in full. But we know that isn’t happening because that’s been made exceedingly clear on GoFundMe’s pricing page and terms.
This might seem like small potatoes, but let’s say I’m donating $1,000 to my buddy’s American Cancer Society triathlon fundraiser. That’s potentially $22.30 that I am (probably unknowingly) giving towards transaction fees and not the American Cancer Society. That’s something I deserve to be explicitly and prominently made aware of.
Importantly, there are only two itemized lines on my checkout list: Your donation, and the GoFundMe tip. Nothing about transaction fees. Importantly, GoFundMe doesn’t charge a transaction fee surcharge in the plain sense of the word—because the total amount stays the same. But it is (it would appear) actually subtracted from the amount you intended to donate.
Now, again, GoFundMe outlines how fees work plainly elsewhere on the site. But it feels to us somewhat, let’s say “against the spirit of transparency” that these pages are much less explicit about these fees within the actual donation checkout flow itself.
There are two disclaimers (in the fine print) below the “Donate now” button. The first says you agree to GoFundMe’s Terms of Service and Privacy Notice. It also says “learn more about pricing and fees.” The transaction fee is enumerated on both the Terms of Service and pricing and fees page. But there is a (in our personal opinion) lack of urgency in communicating that those items contain vital information about the immediate transaction occurring above.
The second disclaimer discusses the PayPal Giving Fund. It begins by saying that “Your donation may be sent directly to the nonprofit, if they have enabled GoFundMe Pay with us. If not, it will be sent to PayPal Giving Fund, minus transaction fees, and granted within 15-45 days, subject to its terms.”
PAUSE: It is worth acknowledging how the PayPal Giving Fund works here. We have previously written about how this shadowy “fund” (which operates as a DAF) and despite being a nonprofit organization, is fully-controlled by PayPal Inc. and has become essential piping for fundraising. PPGF partners with Meta, GoFundMe, and others to serve as the “routing” (if you will) infrastructure for actually getting donations to organizations. We’ve written extensively about how despite all of this being above board, there are concerns about narrow corporate control of charitable giving. But perhaps more importantly than all of the above, it is highly doubtful the general public has nearly any idea what the PayPal Giving Fund is or does, and how it relates to GoFundMe.
It appears here, in our reading, that the documentation is a bit of a circuitous choose-your-own-transaction-rules adventure. Basically it says: your donation might go to the PayPal Giving Fund and thus would succumb to transaction fees, or it might not!
If we gave a pop quiz to prospective donors to see how many successfully interpret whether or not their donation is routed on the backend through the PayPal Giving Fund (or not!) how many do you think would even understand the premise of the question?
So basically the “disclosure” of transaction fees on the donate page comes via a vague “Learn more about pricing and fees” link, or…an indiscernible and confusing question of how money is routed to organizations on the backend.
That is simply not good enough.
→ Donors deserve to know where exactly their money is going. If some amount of a donation made on GoFundMe is sent anywhere other than the intended organization, it is imperative that this is made exceedingly clear. Anything short of that disclosure risks decreasing donor trust.
*We want to add that, as with everything we research, there’s a chance we’re getting this wrong. Perhaps GoFundMe has magically waived transaction fees and they’re a thing of the past! But they still exist in the eyes of GoFundMe’s terms which state plainly in section 11.2 that “A Transaction Fee Is Charged on All Donations.” And if after hours of looking at all this we’re misunderstanding something, we’ll gladly admit to that mistake, but that’s evidence of an issue unto itself.
Why Does It Matter?
We can observe that GoFundMe makes a point of emphasizing how there is a “0% platform fee” right ahead of the tip ask. We can also observe that there is no mention of the separate transaction fee near that ask.
To be clear, there is absolutely nothing wrong with transaction or payment processing fees, or passing those fees onto consumers! But when that happens, our opinion is that donors should be made obviously aware.
At the very least, GoFundMe could simply add the language from its “Terms” where it states “A Transaction Fee Is Charged on All Donations” to its donation checkout pages. While we lack knowledge beyond what we can observe, I’d wager that would not be too technically challenging a hurdle.
Big picture: the behavior of donation platforms is finally seeing scrutiny. We applaud the National Council of Nonprofits’ Principles for Ethical Online Fundraising Platforms. It raises the absolutely critical questions of what consent, accountability, and transparency look like in online giving spaces.
Perhaps importantly, I’d like to call attention to the bullet under “Transparency” that reads:
“[Online fundraising platforms must] Disclose all fees, charges, and suggested ‘tips’ even if applied by a separate entity – in a font size equal to or greater than any other type on the page – at the donation point so that the donor can clearly see the net amount that the nonprofit actually receives.”
For its part, the Federal Trade Commission has published a business guidance resource that suggests that online giving portals directly address fees. “Are there any fees? Be clear about the total amount or percentage of a donor’s contribution that will go to the designated charity,” it writes.
Let’s check out what other platforms are doing. In the below example, Every.org offers expandable FAQs that you can toggle based on the payment type you choose! If you select the option to pay by card, you can expand the FAQ on the side that says “Are there any fees?” to read about the fees specifically applicable to that payment type! Switch to a different payment type, like Bank or Venmo—the FAQ that discloses the fees changes and adapts to what you’ve selected!
On the flip side, there are other organizations that have complex fee structures. GlobalGiving notes that on one end of the extreme, as much as 15% of a donation may end up going towards costs and not the charity. That’s definitely not great (and might be extremely off-putting to donors), but GlobalGiving’s model is more complex and enmeshed with supporting organizations themselves. However, like GoFundMe, GlobalGiving creates friction by requiring users to click out to a different page to read about fees applicable to the transaction they’re in the process of making.
From what we can tell, none of the three platforms (GoFundMe, Every.org, and GlobalGiving) provide the clear checkout itemized subtotal specifying what amount of a donation will actually make it to a charity versus be sent towards fees. All three also emphasize optional tips—though Every.org and GlobalGiving are charities themselves.
In short, there’s still room for improvement industry-wide.
What does disclosure look like in an ideal world? Check out what Give Lively is doing for their campaign pages. Putting in credit card information and a donation amount triggers an explicit indication of what amount of will end up going to charity, and the option to cover those fees. In one screenshot, you can see a donate page that explicitly shows what amount of a donation will go to transaction fees. On another donate page type, you can see the transaction amount explicitly denoted in their tip slider: giving users the option to cover the fees, add a tip, or do neither–simultaneously. Either way it’s meaningfully more clear.
Final Thoughts: Please Don’t Sue Us
We have absolutely nothing against GoFundMe (or any other mentioned platform). We’ve used it to donate in the past and will use it again to donate in the future!
But for too long the nonprofit tech space has been the Wild West, with no Sheriffs to enforce the rules. The pipes of small-dollar charitable giving are disturbingly narrow. Major donation platforms are being bought and consolidated by private equity, DAFs are increasingly important (see PayPal Giving Fund) but beholden to big corporations, and the advent of AI means that donor behavior is changing, and nonprofits’ ability to instill trust in the infrastructure is more important than ever.
We should all applaud holding the various components of the charitable sector to the high standards that donors expect and charitable organizations seek to maintain.