GoFundMe has risen to the arguable top of the crowdfunding heap in recent months, becoming the platform that springs to mind and headlines for grassroots funding.
The key, as a recent Forbes article notes, is the fact that the company has had a key differentiator in the form of the uniquely personal nature of the campaigns — for any manner of causes a would-be fundraiser deems worthy, while peers, such as Kickstarter, have championed creative or art-centered activities. Other more recent models have included equity crowdfunding, and activity has expanded to focus on small corporations and geographic reach.
The movement towards the personal — say for cancer awareness or community programs— has helped GoFundMe to bring in $1 billion in donations for the past 12 months, and that is, according to CEO Rob Solomon, up triple digits from the year before. The intersection of crowdfunding and personal beliefs has helped GoFundMe break away from the pack, with a business model that has a 5 percent fee in place, in addition to credit processing fees, translating into a revenue run rate of more than $50 million, which is as much as 10 times its peers. Forbes estimated that Kickstarter has raised a relatively sedate sum of $540 million through the past 12 months. Indiegogo has raised $750 million since its 2008 inception. That company’s business model expanded into personal causes with a funding platform that was recently unveiled, known as Indiegogo Life, which relies on card processing fees.
Nonetheless, people do not seem to mind the fees charged against their pledges by GoFundMe, with nearly 12 million donors to 1 million campaigns in the last 12 trailing months.
[bctt tweet=”Nonetheless, people do not seem to mind the fees charged against their pledges by GoFundMe.”]
Yet, the market may become a bit segmented moving forward, Tilt CEO James Beshara told Forbes. He said that crowdfunding could divide in a way that would have Tilt fund an event such as a local barbeque, GoFundMe help a local business,and Kickstarter help launch a new book.
Solomon, the GoFundMe executive, said the $300 billion nonprofit space holds opportunity, and the company had raised money as recently as this past summer. “We think we can do in the giving space what LinkedIn has done for jobs, what Facebook and Twitter have done for communication and what Netflix has done for entertainment,” he told Forbes in an interview.
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