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Facebook is getting into crowd funding. What does this mean for GoFundMe?
Facebook is now trying to take over the crowd funding world by pushing forward a feature within their website and app that allows users to set up a sort of GoFundMe page for anyone to see. Large corporations like GoFundMe and Kickstarter have been the "go to" platforms if you wanted to get funding, but normally it was for a business idea and not something personal.
Facebook introduced this new feature in March which allowed it's users to donate money for specific things like emergencies, disasters, medical bills, funerals, etc. Basically something that needed money quick because it was unexpected. But now we're seeing that the launch of that feature was only a beta test for what they were actually planning to do, crowd funding everything! Basically if you're over 18 you can set up what's called a "FundMe" page which is linked to your account where the community can donate to you. This feature is also expanding into teams who need funding to purchase jerseys, uniforms and equipment to someone who wants to set up a community garden in their town. These are good ideas for crowd funding, but I'm sure it will get abused sooner rather than later.
Facebook claims it will vet each FundMe page within 24 hours after the submission to make sure that nothing breaks the TOS set in place. If the request is legitimate and not something like "I need $500 for new rims on my 69 Impala" then you should be able to get your FundMe page live. Facebook is sure to siphon a good amount of users from both GoFundMe and Kickstarter, but how much siphoning is unknown at this moment. Facebook stated that they are not doing this to make money off of the charity of others, they simply launched this feature to help users out in a time of need.
Though Facebook’s tool threatens to eat up GoFundMe's community, the company was quick to assure its users that they are not out to make a profit from charity.
Facebooks exact statement:
Facebook’s goal is to create a platform for good that’s sustainable over the long-term, and not to make a profit from our charitable giving tools
Even though Facebook doesn't want to make money from this, they will still need to be paid for the service. They will be charging 6.9% of the total funding and $0.30 per "FundMe" campaign launched. This is slightly lower than GoFundMe's 7.9% and $0.30 per donation on the page. Facebook says that the payments will go towards background checks and fraud/security protection, which is understandable. They're going to make millions every month because of this, but how many people will be running the service on the back end? I'm sure Facebook will profit off of this, but they can't say they're intend to because they will make them look greedy lol.
We all know that Facebook has never been the one to think of their own ideas and run with them. They will copy a successful business model, which is already working, and they will use their massive numbers to make it successful for themselves while killing the other businesses with the original idea.
A good example of this is when Facebook launched it's "Stories" feature which was an obvious rip off of SnapChat. It also launched something called Facebook Places which can be assumed a rip off of Foursquare and then it copied twitters hashtag feature.
It's unclear if Facebook will start to block/ban GoFundMe links from their advertising platform because technically that's the competitor. It would be a smart move on facebooks part, but it would also make them look bad since people want to pay to get some funding. It's facebook vs. GoFundMe, not Facebook vs. the people with GoFundMe accounts.
We can't really do anything about this so we'll just have to accept what is going to happen and work around it. You never know if the Facebook FundMe pages will be a huge success and help get you funding quicker than a GoFundMe page, only time will tell
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