A recent lawsuit has been filed against GoFundMe, alleging that the company misleadingly collects "tips" from donors, which are actually fees that go to GoFundMe itself rather than directly to the people or causes the donors intended to support. The lawsuit was filed in a federal court in Illinois by Sandra Donovan of Illinois and Ebony Baker of Georgia. They claim that GoFundMe automatically adds these fees at checkout, making it hard for donors to avoid them. This practice, they argue, contradicts the company's website description, which states that it charges a 0% platform fee for organizers and relies solely on donor generosity.
According to the lawsuit, GoFundMe actually funds its operations by charging transaction fees on each donation. These fees vary depending on the type of donor: individuals and businesses are charged 2.9% of the donation plus $0.30, while certified nonprofits are charged 2.2% of the donation plus $0.30. The plaintiffs argue that these fees are not clearly disclosed to donors, who often give in the heat of the moment, expecting their contributions to go directly to those in need rather than toward hidden or preselected middleman costs.
Donovan and Baker claim they unknowingly paid these fees, which they argue gave GoFundMe an unfair financial advantage. Their legal team is seeking to have the case certified as a class action, which would allow other affected donors to join the lawsuit. They are also requesting a jury trial to stop GoFundMe's alleged deceptive practices and to recover the money they believe was wrongfully taken from them.
The lawsuit highlights concerns about transparency in online fundraising platforms, where users may not always be fully aware of the financial mechanisms behind their donations. If successful, the case could set a precedent for how such platforms disclose their fees and ensure donors are fully informed about where their money goes.
Lawsuit Alleges GoFundMe Deceptively Adds Tips to Donations
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