Editor’s note: A previous version of this article incorrectly stated that GoFundMe benefits from a processing fee. This fee is, in fact, collected for a third party. GoFundMe operates a free platform, and donors have the ability to give it a voluntary tip when making a donation to a campaign.
We apologize for the error.
VANCOUVER (NEWS 1130) – The record-setting GoFundMe page for the families of victims and survivors of the Humboldt Broncos bus crash has become a focal point for the love and support being offered by Canadians, but it has also generated roughly $275,000 in service fees.
Fifteen people were killed when a semi crashed into the Junior A hockey team’s bus in northeastern Saskatchewan last Friday. Fourteen others were injured, some critically.
While GoFundMe no longer charges a five per cent platform fee, a third party payment processing fee of 2.9 per cent plus 30 cents from every donation is collected — regardless of the circumstances of the fundraiser.
“It’s expensive to operate a business like this,” says GoFundMe CEO Rob Soloman. “The credit card processing fees that we charge are very standard; they’re what all e-commerce sites for the most part charge.”
Users are also given the option to “tip” GoFundMe during the donation process as a way to “maintain and improve” the platform.
“We have to provide great service and there’s the trust and safety component as it relates to this campaign in particular. We’re teaming up with the world’s foremost experts in how to distribute funds in this type of situation, and we’re making sure the funds go to the right people in the right way,” Soloman adds.
Don Heider, founder of the the Centre for Digital Ethics and Policy at Royal University in Chicago, argues that the ethics of charging people for their charitable donations are questionable.
He notes that in the past, fundraisers for the victims of tragedy were run through local banks, which typically waived service fees for ethical reasons. This approach also allowed for an administrator to manage the funds and ensure they were used properly by the recipients.
“Most bankers, accountants and financial planners are trained in how to ethiocally handle funds and make sure they go to the right people and places,” Heider says.
However, he points out bringing a bank onboard can sometimes take days, “and in this digital age, that seems like a lifetime.”
GoFundMe allowed Humboldt hockey mom Sylvie Kellington to set up a fundraiser mere hours after the crash, and collect hundreds of thousands of dollars from all over the world in less than a day.
Heider suggests the company could be more transparent in the way it collects fees, and offer lower rates if the fundraiser is prompted by tragedy.
The Humboldt Broncos fundraiser is the largest crowdfunding effort in Canadian history, with over $8.6 million raised as of 12 p.m. PT Wednesday.