Pick through the aftermath of a disaster and it is more than likely GoFundMe will be there.
In recent weeks, the crowdfunding platform has been channelling advice to victims of hurricanes Helene and Milton. After a devastating fire ripped through the Hawaiian resort of Maui last year, team members joined calls with emergency services and government staff. It was also in contact with those co-ordinating the consequences of the recent knife attack on young girls attending a Taylor Swift-themed holiday club in Southport in the UK.
In such emergencies, “we’re part of the response”, explains chief executive Tim Cadogan, because the online platform is often the easiest and quickest way for family and friends to raise money for victims before public funds can be made available. GoFundMe helps verify new campaigns, and eliminate copycat fundraisers and scams.
Not all GoFundMe cries for help are prompted by crises. One recent campaign has raised more than $3,000 towards a $5,000 goal to preserve a puddle that has formed around a fire hydrant in Brooklyn, where someone has been rehoming pet fish. But the group’s association with emergency fundraising — whether at large scale or for individual medical needs — is both a sign of its reach and a source of controversy.
Speaking on a recent visit to his native UK, Cadogan describes GoFundMe as “a storytelling platform”. He is himself a polished storyteller, with a ready supply of anecdotal evidence of GoFundMe’s work. He mentions that after the Financial Times interview, he is due to meet Esther Ghey, mother of Brianna, the transgender teenager murdered last year. The Peace in Mind fundraiser run by Ghey and the Warrington Guardian set a target of £50,000 and has so far raised more than £89,000. A separate GoFundMe campaign established to help the Ghey family raised £114,000.
“These are people who have been through things that are hard to even describe,” says Cadogan. His role in such meetings is “just listening to where they are in their life. And if we’ve played a role, [asking] what we did well, what we didn’t, what we could do better”.
Tuning in to the causes that the company enables is one way of motivating himself and the 650 staff who work for GoFundMe and Classy, which provides fundraising software for non-profits such as hospitals and charities and was acquired in 2022.
That such work is carried out by a private, for-profit company, backed by venture capital investors including Accel and TCV, troubles some critics, such as Nora Kenworthy, a professor at the University of Washington Bothell. She is the author of Crowded Out, about the consequences of crowdfunding medical needs, which is GoFundMe’s largest category. Kenworthy’s research suggests many medical campaigns fall short of their targets. Those that succeed tend to be run by better-connected and wealthier users.
In an email response to that criticism, Cadogan agreed that those with the most extensive network were likely to raise more, adding: “We’re working on ways to connect more fundraisers to people who could help, even if they don’t know the recipient.”
GoFundMe has also become a conduit for much bigger campaigns. After Russia’s invasion in 2022, the US state department partnered with GoFundMe to direct private humanitarian contributions to Ukraine. “The question is whether we want to leave that type of assistance up to a single private company with very little transparency, even if it’s doing things very well,” says Kenworthy.
Cadogan counters: “It’s a strange assumption that if you’re doing something good, you shouldn’t be a business.” Being a well-run company, he says, allows GoFundMe to invest in the necessary technology, people and systems.
GoFundMe does not reveal its detailed financial information, but in the UK, individuals pay a 2.9 per cent transaction fee plus 25p for each donation, most of which covers card-processing fees. Its biggest revenues come from voluntary “tips”, which donors can adjust down to zero if they wish, using an online “slider”.
Cadogan says he thinks it is “rather beautiful” that customers decide what to pay the platform. But introducing the slider was a commercial rather than an aesthetic move. Revenues dipped at first but the income generated by voluntary contributions now turns out to be highly predictable. Meanwhile, the volume of fundraising continues to increase — at 30 per cent a year in the UK, for instance, and 100 per cent in Germany. GoFundMe has generated $30bn in funds for users since 2010, $21bn of which has been raised since 2019, including through Classy. Mexico is the latest country to join the network.
Cadogan has a commercial background in internet search and online advertising, including as co-founder of ad technology company OpenX. In 2019, approaching 50, he set himself three criteria for his next challenge: it should involve consumer-facing products, like Yahoo where he had worked for five years before starting OpenX; it should be “something brand new” to “start that learning curve again”; and it should be “somewhere that had a social impact . . . that my kids are proud of”.
GoFundMe “was just kind of a slam dunk”, he says, with the faint American accent and turn of phrase he acquired after moving from the UK in 1996 to study for an MBA at Stanford University.
The learning curve was far steeper than he could have predicted. He started the new role on March 2 2020, as the pandemic approached. Within days, the company had gone remote and Cadogan did not meet another colleague in person for 18 months. He was also short of senior support. GoFundMe had vacancies for chief financial officer, chief technology officer, head of product and head of marketing. In addition, crowdfunders “needed us like never before”, recalls Cadogan. “The level of [business], the volume of it, was new. Small businesses, restaurants, bars, music venues . . . were furloughing their employees, and patrons would set up a [fundraising] campaign to help the employees they cared about. And we had tens and tens of thousands of these.”
Cadogan says the company operated “in a state of crisis” for more than a year. To cope, he drew on what he had learnt as the founder of a start-up, where “stuff happens and you just have to deal with it”. But he also tapped his extracurricular experience, as a volunteer with a search-and-rescue unit operating in the San Gabriel Mountains near his home north-east of Los Angeles, and as a one-time ultra-distance runner, “problem-solving as you go” while competing in 50- and 100-mile races.
Every rescue mission is a crisis for someone, Cadogan explains, and “the key you need in a crisis is to stay calm, to use a repeatable process and to adhere to that”.
Cadogan says his core investors are “very happy with what we’ve done”. GoFundMe has not raised funds from investors since 2015. Could it ever be a listed company? The chief executive says it could, although an initial public offering is “not on the immediate horizon”.
Listing has tested the purpose-driven business models of groups such as the crafts marketplace Etsy. But at GoFundMe, the interests of customers and shareholders are fully aligned, says Cadogan. “There’s never been a moment where I felt I had to make a decision for the business [versus the donors or fundraisers] . . . The company purpose is very simple: help people help each other . . . That’s it, that’s our job, we don’t have any other businesses”.
If the business does that, “we will continue to do well and be able to invest and build the business . . . It’s very clarifying,” he adds.
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