Only donations made towards a certified charity campaign are considered to be tax-deductible and will be issued tax receipts at year end by PayPal Giving Fund. In order to create a certified charity campaign, the charity’s name or EIN needs to be provided to GoFundMe. Unlike with a standard GoFundMe campaign, the funds raised are not collected by the campaign organizers, but rather they are distributed directly to the certified charity through the use of PayPal Giving Fund. Donations made towards standard GoFundMe campaigns are generally not eligible as a tax deduction as they are given to individuals and not registered charities.Ĭertified charity campaigns raise money for a 501(c)(3) or other registered charity. With a standard GoFundMe campaign, most organizers are individuals, and they can withdraw the funds raised for their cause and deposit them in their own personal bank accounts however frequently they choose. There are also two different types of campaigns available: either a standard GoFundMe campaign or a Certified Charity campaign. On GoFundMe, you can raise money for an individual, a group of individuals or an organization. It merely facilitates the means for individuals to receive funds from unrelated donors. GoFundMe is not a broker, financial institution or 501(c)(3) charitable organization.
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Other individuals may then use the platform to donate to the campaigns of their choice. They can create their own websites, upload photos and videos, and then share the website through email and various social media platforms. GoFundMe enables individuals in need to establish their own campaigns to fundraise for their personal causes.
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GoFundMe operates as an administrative platform, essentially acting as the middleman between individuals needing financial assistance and the donors who are willing to help. The ability to contribute directly to people in need, as opposed to their business products, has also caused confusion around the deductibility of such amounts as charitable contributions.
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This focus on individual causes has contributed to GoFundMe becoming the largest crowdfunding platform on the internet. Unlike its predecessors, GoFundMe focused on making financing available for personal needs, such as medical expenses and tuition. Although there were several other crowdfunding platforms available at the time, the existing platforms focused mainly on funding for the creation of businesses or tangible products. GoFundMe was launched in May 2010 in an effort to create a platform for individuals to fund their personal causes. GoFundMe Donations May Have Tax Consequences October 1, 2020