GoFundMe drops 5 per cent 'platform fee' for donors

But the fundraising platform will continue to implement a 2.9 per cent payment processing fee

The online giving platform GoFundMe has dropped its 5 per cent "platform fee" for donors who use its service.

The fundraising platform said today that it would continue to charge a payment processing fee of 2.9 per cent but would no longer charge a platform fee. 

GoFundMe said in statement that it now planned to rely on "voluntary tips" from donors to sustain its service.

The US-based platform, which was launched in the UK last year, said the new system had been piloted in the US and Canada.

Rob Solomon, chief executive of GoFundMe, said: "As we’ve rolled this new model out in the US, we've had a huge amount of positive feedback from our community.

"It’s a win-win move, and we think people in the UK will recognise the outstanding service we provide – and now we’re offering that service for free."

But Kirsty Marrins, a digital communications consultant, said she had doubts about how sustainable the new model would be and warned that undercutting other providers could devalue the service.

The move makes GoFundMe the only major fundraising platform not to charge a platform fee, GoFundMe said. JustGiving and Crowdfunder charge 5 per cent and Virgin Money Giving charges 2 per cent.

JustGiving and Virgin fees are taken from the Gift Aid they claim on donations for the charity, or from the donation if it is not eligible for donations, while GoFundMe does not yet claim Gift Aid on behalf of charities.

Marrins said: "While it's commendable that GoFundMe is dropping its platform fee, I feel this sends the wrong message.

"Platforms such as JustGiving and Crowdfunder charge a platform fee because it's expensive to run, maintain and improve their platforms. In JustGiving's case, it reinvests its profit back into the platform to help charities raise more money.

"What most people don't realise is that when a crowdfunding page goes viral, it takes a huge amount of resource to keep the website up and running – and, therefore, taking donations. It's expensive, which is why platforms need to charge a platform fee."

GoFundMe allows individuals and charities to set up fundraising campaigns.

JustGiving and Virgin Money Giving have paid-for facilities that allow charities to set up pages on their sites, receive money from others’ fundraising pages on the charity’s behalf and run multiple pages and campaigns.

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