Gofundme and Betterplace: How donation portals make money

These are heartbreaking blows of fate. A little girl has leukemia, so friends of the family are raising €40,000 to cover the additional costs of her treatment. A family lost everything in a house fire and now needs €30,000 to start over. Fundraising campaigns like this on platforms like Gofundme and Goodcrowd provide tangible help to people in need. That's why many are willing to donate money.

But despite all the gratitude for the straightforward assistance, what do the platform operators gain from this? Who is behind it? And is it all legitimate?

By far the largest fundraising platform in the world is the US company Gofundme. It was founded in California in 2010 and sold to a consortium of investment firms just five years later. These firms include the influential US venture capital firm Accel, which has been involved in building many other well-known technology companies, including Facebook, Slack, Spotify, Dropbox, and Etsy.

Gofundme could now be Accel's next big prestige project. Time magazine named the fundraising platform one of the 100 most influential companies in the world in 2025. Since its founding, Gofundme has raised $40 billion from 150 million people worldwide. According to the company, Germany is the fastest-growing market: more than €110 million was raised there in 2024, double the amount of the previous year.

What's moving the United States: RND's US experts provide context and background information. Every other Tuesday.

By subscribing to the newsletter I agree to the advertising agreement .

Betterplace, on the other hand, is a non-profit organization based in Berlin that, unlike Gofundme, is not allowed to generate profits. Furthermore, Betterplace is only allowed to collect donations that benefit non-profit organizations. For private donations, the parent company Gut.org founded the sister platform Goodcrowd, formerly known as betterplace.me.

Because both Gofundme and Goodcrowd handle private fundraising campaigns, they are not permitted to issue donation receipts for tax purposes. This is only possible if the donation is made to a non-profit organization.

For this reason, it's also difficult to verify the credibility of appeals for donations, says Burkhard Wilke, managing director of the German Central Institute for Social Issues (DZI), which awards a seal to reputable fundraising organizations. "Gofundme doesn't conduct any quality control. In our view, a donation therefore only makes sense if you know the person making the appeal," he advises.

Donation platforms charge fees for their services. Gofundme deducts a flat rate of 2.9 percent of the total amount at the end of a fundraising campaign, plus 25 cents for each individual donation. Goodcrowd deducts 2.7 percent of the total amount and 35 cents for each individual donation. An example calculation: With a donation total of €30,000 and 600 donors, €1,020 goes to the platforms in both cases.

Both Gofundme and Goodcrowd say that the fee income is primarily used to cover banking and transaction costs. But how do they pay their employees? Office rent? And the servers? In Gofundme's case, where does the return for the investment companies come from?

This funding also works through donations. For every transaction, a "voluntary contribution to Gofundme" or "voluntary support for Goodcrowd" is preset under the donation amount input field. For Gofundme, the amount is always 17.5 percent.

Voluntary contribution to Gofundme

Source: Screenshot RND

If donors do not change this voluntary contribution, they will not spend, for example, 100 euros on the fundraising campaign, but an additional 17.50 euros on the platform.

Goodcrowd works similarly. For every €100 donation, the website presets a voluntary contribution of €10.

While both platforms allow you to reduce the amount to as little as €0, donors must first realize that they're being asked to donate more than they originally intended, and they must actively decide against it.

Donation expert Wilke criticizes: "17.5 percent is steep, especially considering that there is no quality control." Nonprofit organizations typically spend 12 percent on advertising and administrative costs. "And they offer significantly more value."

When asked about the preset donation for the company, a Gofundme spokesperson said: "Should someone inadvertently make a voluntary contribution as a result of the donation, our team can refund 100 percent at any time."

But can a business model based solely on donations make investors happy? The Gofundme spokesperson speaks of a stable source of income. "Many people make voluntary contributions, some don't. But with several million people donating every month around the world, it's pretty reliable."