GoFundMe Accused of Deceptively Adding 'Tips' to Donations in Illinois Lawsuit

GoFundMe has been accused of deceptively adding “tips” to donations that go to the company and not helping others.

The fundraising site has skyrocketed in popularity since it launched in 2010, helping strangers connect with grieving families struggling to pay for funeral costs or those who can’t afford to pay for medical bills after a tragic accident. Donors can send money to those in need through GoFundMe with a click of a button.

But when people go to donate to a charitable cause of their choice on the site, they are also hit with an automatic tip to the company that they can opt out of, a practice that a recently filed lawsuit claims is tricking donors into paying more.

“Once automatically added, GoFundMe makes the ‘tips’ difficult to remove, forcing consumers to hunt around for a way to remove them,” according to a lawsuit filed in a federal court in Illinois last month by Sandra Donovan of Illinois and Ebony Baker of Georgia, who have both made donations on GoFundMe.

The Independent, which obtained the lawsuit from ClassAction.org, has reached out to GoFundMe for comment.

The lawsuit also challenges how GoFundMe explains the tipping option on its site.

When donors go to pay on the site, the company has a blurb that reads, “GoFundMe has a 0% platform fee for organizers and relies primarily on the generosity of donors like you to operate our service.”

But the lawsuit argues that this description is “false,” adding, “In reality, completely unbeknownst to those who donate through its website, GoFundMe funds its services by charging charitable organizations hefty transaction fees on each donation they receive.”

GoFundMe says on its site that while it's free to create a fundraiser, the company charges “one small transaction fee per donation.”

The fee varies slightly depending on who creates the fundraiser. Individuals and businesses are charged 2.9 percent of the donation plus $0.30, while certified nonprofits are charged 2.2 percent of the donation plus $0.30.

“Donors act quickly, often emotionally, and with the reasonable expectation that their money will go where they intend—toward helping others, not toward undisclosed or preselected middleman fees like the ‘tips’ charged by GoFundMe,” the lawsuit claims.

Donovan and Baker “paid money they did not knowingly authorize, conferring an improper financial benefit on GoFundMe” because of the company’s business practices, the lawsuit argues.

Donovan and Baker's lawyers are asking the court to certify the case as a class action and are demanding a jury trial to stop GoFundMe's “deceptive conduct and return its ill-gotten gains,” according to the lawsuit.