SAN FRANCISCO (KGO) — 7 On Your Side is following a story we first brought you last month about a controversial new product GoFundMe launched to solicit donations for nonprofits. Since our story aired, the company apologized and issued changes.
But there’s still concern about another feature on the platform. GoFundMe used to charge a platform fee to cover the costs of running their business. However, in late 2017, the company removed that platform fee and shifted to an optional tipping model.
And some 7 On Your Side viewers argue that model can be unfair and misleading.
Brenda’s nephew has stage 4 pancreatic cancer and has been in the hospital for the past month. She says she and her husband donated $2,000 to a GoFundMe page the family created to support him.
“We donated and then we checked our Costco Visa account, and it showed an extra?… $330! Extra. And we didn’t donate that,” Brenda said.
Brenda says they missed any mention of a tip when donating the money and would have opted out, if they had seen it.
“We were upset and we think it’s unfair,” she said.
Brenda’s daughter Cyndi helped her dispute the charge with GoFundMe.
“I was pissed and felt like my parents were taken advantage of… not just them. Anyone that has done this,” Cyndi said. “You can’t call them directly. You can only reach out to them online… where you can request a refund of the tip.”
MORE: GoFundMe created 1.4M donation pages for nonprofits; some Bay Area organizations had no clue
Cyndi says after the vetting process, GoFundMe did refund her parents the roughly 16.5% tip, amounting to $330.
But to her, it raised a valid question: why doesn’t GoFundMe proactively avoid this and make tipping an opt-in experience?
We asked GoFundMe and here’s what we found.
The company confirmed to 7 On Your Side that optional tipping will remain preset for individual fundraisers, fundraisers benefiting nonprofits, and direct donations to nonprofits that have opted in and both claimed and verified their pages.
Krista Lamp, the senior director of Nonprofit Communications at GoFundMe, told 7 On Your Side back in October: “These completely optional contributions really make it possible for us to offer our fundraising tools, our customer support, and really support our global team of trust and safety experts.”
In a recent statement sent to our team, GoFundMe wrote: “GoFundMe does not charge a fee to start a fundraiser. Instead, we rely on optional tips from donors, which help power the platform.”
Adding: “We’ve made it a priority to effectively communicate about the optional tipping model to our customers, and the data reflects that it’s an easy-to-navigate experience — the vast majority of our donors interact with our tipping slider, and in many cases, do move it to zero. We are glad to give donors that choice. This model is unique because it lets donors decide how valuable our service is and tip accordingly.”
“To me, it sounds like they’re kind of preying on people that are going through hard situations, and that’s wrong,” Cyndi said.
MORE: GoFundMe created 1.4M donation pages for nonprofits; some Bay Area organizations had no clue
Like Cyndi, other viewers expressed disappointment.
“I’m a believer in opt in… not opt out…” user Dave Dornlas told 7 On Your Side during our previous report.
GoFundMe also deducts a transaction fee from the beneficiaries, which the company says is used to pay their payment processors to safely deliver funds. It is 2.9% + 30 cents for individual fundraisers and 2.2% + 30 cents for nonprofit fundraisers in the U.S.
GoFundMe says in the “rare instance” someone leaves an optional tip without intending to, they can reach out to their customer service team to get a refund.
Take a look at more stories and videos by 7 On Your Side.
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