Trust is paramount for donors: trust that your organization is keeping expenses low, using secure giving platforms, maintaining strong internal controls and compliance, keeping their personal identifying information private, and funding programs and projects that have the greatest potential for impact.
When donor trust is broken, it can permanently tarnish your organization’s reputation and cause support to dry up.
The recent GoFundMe nonprofit scandal has unnerved organizations, regulators, and donors alike, as it exposed deceptive hidden fees (raising concerns about alleged GoFundMe fraud) and highlighted what some companies feel they can do with publicly available data.
What GoFundMe Did
GoFundMe created 1.4 million unauthorized charity pages for nonprofit organizations, using publicly available IRS information. They were not always accurate. This alleged GoFundMe fraudulent practice allowed pages to accept donations, remain searchable, and operate with hidden fees: GoFundMe’s credit card fee, a $0.30 per transaction fee, and a default 14%-16.5% donor tipping model that was routed to GoFundMe. In some cases, these unauthorized charity pages ranked above organizations’ actual websites in search results, siphoning intended donors to unaffiliated donation pages.
Why This Qualifies as Fraud and What Regulators Are Saying
GoFundMe, after immediate, intense pushback from the industry and its leaders, walked back these unauthorized actions, apologized, and removed unclaimed pages. This severe misstep has prompted a coalition of 24 Attorneys General and regulators to demand swift action from GoFundMe. GoFundMe allegedly violated state charitable solicitation and consumer protection laws. There is also a pending class action lawsuit against GoFundMe lawsuit that nonprofits are watching closely. are watching closely, as a class action moves forward against the platform.
The GoFundMe Scam Pattern: This Isn’t the First Time
There is a history of GoFundMe fraud through individual crowdfunding fundraisers, with bad actors claiming to raise money for individual hardships or as scam disaster relief. While some notable GoFundMe scams have been addressed, it’s possible that some nefarious personal crowdfunding has gone unchecked, given that the platform processes an estimated $50 million a week for individual crowdfunding.
Given its size, GoFundMe fraud hurts overall giving and erodes donor trust, regardless of whether your organization has a relationship with GoFundMe.
What This Means for Your Donors
Due to this industry-wide threat, donors are now confused about where their money goes. GoFundMe’s hidden fees also decrease the actual gift amount nonprofit’s receive compared to what donors were charged. Organizations also cannot access donor information with GoFundMe’s unauthorized charity pages, making stewardship and long-term relationship building impossible. This loss of trust causes real, long-term damage to fundraising.
GoFundMe’s hidden fees have made credit card and software fees now seem unnecessary and suspicious. Yet, security, compliance, transactions, and technology staffing do cost money. Trustworthy technology is worth paying for, but your organization should not face excessive fees.
What to Look for in a Fundraising Platform
When evaluating GoFundMe alternatives, full control of your nonprofit’s fundraising and donor relationship management should be paramount.
Your safe fundraising platform should offer:
GiveSmart by Momentive Software offers a GoFundMe alternative for nonprofits. We power the full giving experience, from event fundraising to Giving Days and peer-to-peer campaigns. We are committed to transparent, secure technology with donor privacy built in from day one. Connect with our fundraising experts to learn how GiveSmart brings on better for organizations and their donors.
FAQ
Is GoFundMe safe for nonprofits?
In light of recent events, there are serious concerns about GoFundMe’s safety for nonprofits. GoFundMe allegedly created 1.4 million unauthorized charity pages using publicly available IRS information — pages that weren’t always accurate, could accept donations, and operated with hidden fees. Until these practices are fully resolved and regulatory oversight is in place, nonprofits should proceed with caution and ensure they have full control over any platform representing their organization.
What did GoFundMe do to nonprofits?
GoFundMe allegedly created unauthorized charity pages for nonprofit organizations without their knowledge or consent, using publicly available IRS data. These pages could accept donations, remain searchable, and in some cases ranked above organizations’ actual websites in search results — siphoning intended donors to unaffiliated donation pages. After industry pushback, GoFundMe apologized and removed unclaimed pages.
Did GoFundMe get sued?
Yes. A coalition of 24 Attorneys General and regulators demanded swift action from GoFundMe, alleging violations of state charitable solicitation and consumer protection laws. There is also a pending class action lawsuit that nonprofits are watching closely.
What are GoFundMe’s fees for nonprofits?
GoFundMe’s unauthorized charity pages included several fees: a credit card processing fee, a $0.30 per-transaction fee, and a default tip for donors ranging from 14%–16.5%. The tip, set by the platform, was routed to GoFundMe itself— not the nonprofit. These layered fees were not always clearly disclosed to organizations or donors, raising transparency concerns for nonprofits focused on directing donations to their missions.
Can GoFundMe create a page for my nonprofit without permission?
They did, though they’ve since reversed course. GoFundMe allegedly created 1.4 million unauthorized charity pages without organizational consent, using publicly available IRS information. Ethical fundraising platforms should require explicit nonprofit consent before launching donation pages or integrating new tools — consent is both a legal safeguard and a sign of respect.
What is the GoFundMe tip, and where does it go?
With GoFundMe’s donor tipping model, a tip for GoFundMe was automatically added during checkout. This tip, set by default to 14%–16.5%, is paid to GoFundMe rather than the nonprofit. Donors sometimes assume their total donation goes to the cause, not realizing a portion is retained by the platform. This misunderstanding about where each part of their donation goes can cause confusion or lead donors to abandon their donation mid-process.
What is the best GoFundMe alternative for nonprofits?
When evaluating alternatives, look for platforms that put your organization in control. A safe fundraising platform should offer opt-in, consent-based fundraising pages; controlled staff access; upfront fee transparency; branding and customization options; and donor data reporting and communication tools. It’s also worth asking potential platforms about their support hours, what features are included in the base fee, whether donors can voluntarily cover credit card fees, and how frequently the platform is updated. GiveSmart by Momentive is one such alternative, built around transparent pricing and nonprofit-first data practices.
How do I remove an unauthorized GoFundMe page for my nonprofit?
Following significant industry backlash, GoFundMe removed unclaimed unauthorized pages. If you believe an unauthorized page still exists for your organization, you should contact GoFundMe directly to claim or request removal of the page.
