The Foundation Supporting the US Social Safety Net

Today, I’m diving into a conversation with Tim Cadogan, the CEO of GoFundMe, a prominent platform that enables individuals to raise funds for various causes, from medical bills to community projects. Tim stepped into the CEO role in March 2020, a pivotal time in the U.S. when GoFundMe began to play a crucial role in American culture.

The pandemic wasn’t the only factor reshaping fundraising platforms like GoFundMe. The political unrest of 2020 also positioned GoFundMe as a key player in significant global events. The platform has become a reflection of the challenges within the healthcare system, with medical expenses being the most common fundraising category across all markets where GoFundMe operates.

This intersection of social issues—wealth distribution, geopolitical conflicts, and the gaps in social safety nets—creates a complex environment for a for-profit company that must balance growth and profitability with its mission to help people. I had plenty of questions for Tim about how he navigates these challenges and makes tough decisions regarding the platform’s direction.

Let’s jump into the conversation with Tim Cadogan, CEO of GoFundMe.

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Tim Cadogan, welcome to the show!

Thanks for having me! I’m excited to be here.

GoFundMe holds a unique position in American culture, especially as a for-profit entity. I’m curious about your perspective on its role and the need for growth and returns. You took the helm during a time when the public’s perception of healthcare was dramatically shifting. How do you view the platform’s evolution from 2020 to now?

I started on March 2, 2020, just before the pandemic’s impact became evident in the U.S. We were already operating in 20 countries, and places like Italy were experiencing significant challenges. The pandemic created an urgent need for support, and we saw a surge in fundraisers, particularly for medical expenses and small businesses affected by shutdowns.

At our core, we help people help each other, whether it’s for serious life events or lighter causes like sports teams. The pandemic highlighted the need for community support, and we saw many individuals rallying to help local businesses and friends in need.

I believe this was a moment when GoFundMe became a vital part of American culture, similar to how Zoom became essential for business communication. Do you feel that GoFundMe has taken on that load-bearing role in society?

Absolutely. Our awareness and usage skyrocketed during that time. Before the pandemic, our unaided awareness was in the mid-30s; now, it’s around 70%. More than a third of American adults have used GoFundMe, and this trend is mirrored in other countries we operate in. It’s become a common way for people to express support and take action.

You mentioned that asking for help is a universal challenge. How does GoFundMe navigate the balance between being a for-profit entity and fulfilling a social good mission?

Help is a fundamental part of being human. We’ve found that people everywhere struggle to ask for help, but when they do, it opens the door for support. Our business model is designed to minimize fees, with only transaction processing fees applied. We also allow donors to choose whether to tip us, which aligns our success with the help we provide.

Is this voluntary tipping a stable revenue source for GoFundMe?

While it varies at the individual level, the aggregate behavior shows a steady average across millions of donations. Our growth is tied to helping more people connect and support each other, which is our primary focus.

What’s the average donation amount on the platform?

Currently, it ranges between $80 and $100, depending on the category and country. For our nonprofit fundraising software, donations can vary significantly, especially with recurring contributions.

How do you ensure that the platform remains a space for genuine fundraising rather than being exploited for scams?

We emphasize authenticity in fundraising. Most successful campaigns come from personal connections, making it difficult for scams to gain traction. We also have a robust trust and safety team to monitor and address any potential issues.

Let’s talk about platform moderation. GoFundMe has clear guidelines on what fundraisers are allowed. Can you share what’s on that list and how you make those decisions?

We have a straightforward set of terms of service that prohibits fundraising for illegal activities, including violent crimes. These guidelines are designed to protect the community and ensure that we maintain a safe platform for everyone.

There have been controversies regarding the moderation of fundraisers related to humanitarian causes. How does GoFundMe navigate these sensitive situations?

We work closely with payment processors to adhere to regulations and ensure that fundraisers meet necessary criteria. Our goal is to facilitate support while maintaining compliance with laws and regulations.

As we look to the future, what’s next for GoFundMe?

We’re focusing on enhancing our Smart Fundraising Coach, which has already shown promising results in helping users raise more funds and feel more confident. Our aim is to empower more people to ask for help and mobilize support effectively.

Thank you for sharing your insights, Tim. It’s been a pleasure discussing GoFundMe’s role in helping communities and navigating the complexities of being a for-profit platform.

Thank you! I appreciate the thoughtful questions and the opportunity to share our mission.