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Why GoFundMe's Business Model is so successful?

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GoFundMe’s Company Overview


GoFundMe is a leading crowdfunding platform that allows individuals, groups, and organizations to raise funds for their causes or projects. Founded in 2010 and headquartered in Redwood City, California, GoFundMe provides a digital space where people can share their stories, inspire support, and rally around common goals. The platform has been instrumental in helping people fundraise for various needs such as medical expenses, education costs, volunteer programs, youth sports, funerals and memorials, and even for animals and pets. By creating a unique blend of technology and empathy, GoFundMe has revolutionized the way people give and receive help in times of need. GoFundMe's business model is based on providing a platform where users can create fundraising campaigns for free. The company doesn't charge platform fees to organizers. Instead, it relies on voluntary tips from donors to support the platform's maintenance and development. The platform's easy-to-use interface, coupled with social media integration, makes it simple for users to share their campaigns and attract donations. When it comes to its revenue model, GoFundMe primarily relies on optional tips from donors. When making a donation, donors are given the option to add a small amount as a tip to GoFundMe. These tips are used to cover the costs associated with maintaining the platform, including technology development, customer service, and security. This model allows GoFundMe to provide its platform free of charge to campaign organizers, ensuring that more of the funds raised go directly towards the cause or project. Additionally, GoFundMe also makes money from processing fees, which are a small percentage of each donation.

https://www.gofundme.com/

Country: California

Foundations date: 2010

Type: Charity

Sector: Financials

Categories: Crowdsourcing


GoFundMe’s Customer Needs


Social impact:

Life changing: motivation, affiliation/belonging

Emotional: provides access

Functional: connects, informs, simplifies


GoFundMe’s Related Competitors



GoFundMe’s Business Operations


Collaborative consumption:

Collaborative Consumption (CC) may be described as a collection of resource circulation systems that allow consumers to both get and supply valued resources or services, either temporarily or permanently, via direct contact with other customers or through the use of a mediator.

Community-funded:

The critical resource in this business strategy is a community's intellect. Three distinct consumer groups comprise this multifaceted business model: believers, suppliers, and purchasers. First, believers join the online community platform and contribute to the production of goods by vendors. Second, buyers purchase these goods, which may be visual, aural, or literary in nature. Finally, believers may be purchasers or providers, and vice versa.

Crowdfunding:

Crowdfunding is the technique by which a large number of people contribute to a project. Contribute modest sums of money to support a new business endeavor. Crowdfunding leverages the ease of accessing vast networks of people, connecting investors and entrepreneurs through social media and crowdfunding websites. It can increase entrepreneurialism by widening the pool of investors further than the traditional ring of owners, relatives, and venture capitalists.

Digital:

A digital strategy is a strategic management and a business reaction or solution to a digital issue, which is often best handled as part of a broader company plan. A digital strategy is frequently defined by the application of new technologies to existing business activities and a focus on enabling new digital skills for their company (such as those formed by the Information Age and frequently as a result of advances in digital technologies such as computers, data, telecommunication services, and the World wide web, to name a few).

Donation-based:

Crowdfunding for charity purposes is a collaborative effort by people to aid charitable projects. Civic crowdfunding is a kind of charity crowdfunding in which money is collected to improve public life and space.

Embedded social enterprises:

The built-in social model is predicated on the premise that everyone wants to do good and lose weight in their awareness in a highly consumerist society. Toms Shoes was the first business to establish a successful strategy for include contributions in the value of its bids. Concentrating on shoe sales, the company gained notoriety in the media and its consumers when they announced that another team is given to a charity for every pair of shoes bought.

Online marketplace:

An online marketplace (or online e-commerce marketplace) is a kind of e-commerce website in which product or service information is supplied by various third parties or, in some instances, the brand itself, while the marketplace operator handles transactions. Additionally, this pattern encompasses peer-to-peer (P2P) e-commerce between businesses or people. By and large, since marketplaces aggregate goods from a diverse range of suppliers, the variety and availability are typically greater than in vendor-specific online retail shops. Additionally, pricing might be more competitive.

Peer to Peer (P2P):

A peer-to-peer, or P2P, service is a decentralized platform that enables two people to communicate directly, without the need for a third-party intermediary or the usage of a corporation providing a product or service. For example, the buyer and seller do business now via the P2P service. Certain peer-to-peer (P2P) services do not include economic transactions such as buying and selling but instead connect people to collaborate on projects, exchange information, and communicate without the need for an intermediary. The organizing business provides a point of contact for these people, often an online database and communication service. The renting of personal goods, the supply of particular products or services, or the exchange of knowledge and experiences are all examples of transactions.

Sharing economy:

The sharing economy eliminates the necessity for individual asset ownership. The phrase sharing economy is an umbrella word that encompasses various definitions and is often used to refer to economic and social activity that involves online transactions. Originally coined by the open-source community to refer to peer-to-peer sharing of access to goods and services, the term is now occasionally used more broadly to refer to any sales transaction conducted via online marketplaces, including those that are business to consumer (B2C) than peer-to-peer.

Social stakeholder:

Social responsibility will only be accurate if many managers embrace moral leadership rather than immoral leadership, organizational management, and business ethics that engage morals and values in corporate governance. In a nutshell, it addresses the concept of who or what really matters.

Transaction facilitator:

The business acts as an acquirer, processing payments on behalf of online merchants, auction sites, and other commercial users for a fee. This encompasses all elements of purchasing, selling, and exchanging currencies at current or predetermined exchange rates. By far the biggest market in the world in terms of trade volume. The largest multinational banks are the leading players in this industry. Around the globe, financial hubs serve as anchors for trade between a diverse range of various kinds of buyers and sellers 24 hours a day, save on weekends.

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