Friday, January 14, 2022

Fundraising Consolidations

Yesterday, GoFundMe, the nearly-ubiquitous crowdfunding platform, announced that it was acquiring Classy in an all-stock deal.

As best I can tell, GoFundMe allows both individuals and organizations to solicit money. While GoFundMe does allow charities to ask for money, my impression is that individuals looking for help with medical bills and other emergencies is a big part of what it does.

Classy, by contrast, appears to focus exclusively on putting donors together with nonprofits. I confess that I hadn't heard of them until this morning, but the acquisition announcement says that over its 10-year life, Classy has helped put $4 billion in the hands of nonprofits (including $1.1 billion last year).

I confess that I don't have any sense of who benefits from this kind of consolidation in the nonprofit fundraising sector. Is it good for charities? for donors? for shareholders of the two companies?  (If you have thoughts, I'd love to hear them in the comments or in emails!)

It will, however, be interesting to watch what happens as GoFundMe starts to focus on nonprofit fundraising in a serious way.

Samuel D. Brunson

https://lawprofessors.typepad.com/nonprofit/2022/01/fundraising-consolidations.html

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Comments

https://clickandpledge.com/ has been around for quite a long time - focused on giving to charitable nonprofits. I've heard of several others, and a search on "click to donate" will turn up a flurry. Lloyd Mayer (Notre Dame Law) has done quite a lot of research on crowd sourcing and its overlap with charitable activities.

Posted by: Putnam Barber | Jan 15, 2022 8:01:24 AM

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