Selina Iglesias: Greene Publishing, Inc.
Over a span of years, GoFundMe has become a popular website for creating fundraising campaigns, whether someone is looking for donations to fund a road trip or a child's hefty cancer treatment bills. However, not all of the money donated falls into the hands of those in need.
For every donation you receive when having a campaign on GoFundMe, the company automatically deducts a five percent fee. These fees are deducted in real-time from donations, but the donors themselves are not charged any fees. In addition, the payment processors, or the bank, also charge a deduction fee, which varies depending on the location and campaign type.
Although there are no fees to sign up or create campaigns, when you create a GoFundMe account, a WePay account is automatically created for you during the sign-up process. That way, you can receive donations instantly. The payment processing fee for WePay is 2.9 percent per 30 cent donation. This is stacked on top of GoFundMe's five percent fee per donation, so the total fees are 7.9 percent per 30 cent donation.
Not many people are aware of the hidden fees behind GoFundMe, as the amount raised that is displayed on the campaign will always reflect the total amount of donations received before fees are deducted. This spells trouble for a lot of people desperately in need of funding for large amounts of money. Say a family member setting up a GoFundMe for a relative's cancer treatment. According to the Medical Expenditure Panel Survey from the Agency for Healthcare Research Quality, cancer care cost an average of $85,201 per patient in 2010-2011, and that number is steadily rising. The American Society of Clinical Oncology reports that the total annual cost of cancer care in the U.S. is projected to reach $175 billion by 2020, an increase of 40 percent from 2010.
If the family in need receives the donations they need, (for this situation, let's say they need $95,000 to fund the treatment), the fees will rack up. Five percent (GoFundMe's fee) of 95,000 is 4,750, so that estimates to about $5,000 given to GoFundMe. And there's still that added 2.9 percent from WePay; 7.9 percent of 95,000 is 7,505. So that's pretty much $8,000 pocketed by GoFundMe and WePay, $8,000 a family in need most likely doesn't have. And, we still haven't added the bank processing fee, which, as said before, varies between banks, campaign types and states.
The next time you want to donate money to a campaign, you might want to keep these fees in mind, and go the old-fashioned route by writing a check or putting money directly into a direct account instead.