MINNEAPOLIS (WCCO) — In just 10 days, nearly 30,000 friends, and mostly strangers, have donated to the online fundraiser for the boy attacked at Mall of America.
That outpouring of support left viewers like Zach from St. Paul and Kathy from Stacy wondering: How does GoFundMe work? Good Question.
Since GoFundMe started in 2010, people have given each other more than $5 billion.
When someone donates, a 2.9% credit card processing fee is taken out. The rest goes to the cause.
GoFundMe also asks donors for a tip — an additional percentage on top of what they give. The company says that money goes to staff, technology and safety teams — basically keeping the site running.
Fundly, a competitor, works differently. It takes almost 8% from the donation itself, partly to cover the credit card fee.
Do GoFundMe money recipients have to pay taxes on the money that was raised? WCCO-TV talked with CPAs who said the answer is no in almost every case. This is because GoFundMe donations are considered gifts. Gifts aren’t taxed, but they’re also not tax-deductible. There are some different rules if one person gives more than 15,000 — but that rarely happens.
For example, the average gift for “Help for Landen” is $35. The beneficiary of the campaign can withdraw money as soon as GoFundMe verifies them. That usually happens within a day.
In Landen’s case, his family has been verified, so they could get the money now.