Jennifer Sieg explores Gofundme’s transformation as Brits begin to use the platform to support small businesses with a purpose.
If there’s one thing Britain’s entrepreneurial ecosystem has figured out, it’s how to leverage the power of community.
Since the pandemic, small businesses have faced more unprecedented challenges than one could count: store closures, furloughs, insolvencies, you name it.
Tim Cadogan, chief executive of global crowdfunding platform Gofundme, joined the company at the height of the pandemic and has been at the forefront of its transformation over the past four years.
The British-American entrepreneur joined Gofundme in 2020, just a decade after it was founded, and now runs its operations across some 20 countries.
Gofundme is widely known for being the go-to platform if you’re someone looking to raise money for a charity walk, an unprecedented vet bill – one of the top five categories in the UK – or a charitable project for a local volunteer programme.
The platform is also being increasingly used for start-up fundraising.
Cadogan, who is speaking to Ambition AM during one of his routine visits to London, says the platform’s business category took off during the pandemic and has since seen a steady growth rate.
It’s something he believes to be a strong sign of giving among the British public, who donated a record £13.9bn to charity in 2023.
“We saw a lot of fundraising, particularly the early phases of the pandemic, for particularly businesses like restaurants, some hotels, music venues, bars and so on, where they were furloughing employees,” he says.
“That was a really big spike that’s obviously gone away, but now what we see is a more regular stream of generally smaller businesses, local businesses [or] someone trying to get started.”
Innovative businesses doing innovative things
Around 2m fundraisers have been started in the UK, with over 15m Britons now using Gofundme.
According to the platform, the average value of donations for business fundraisers in the UK are 20 per cent higher than that of a charity. Although most businesses using the platform do tend to have some sort of charitable or social impact element to lean on.
It’s a trend some businesses have caught onto, with some rather unique campaigns and business strategies surfacing over the years.
Bristol-based prosthetics manufacturer Open Bionics, for example, created an entirely new role focused solely on customer success when it comes to families needing to crowdfund to afford one of its flagship ‘Hero Arms’.
Sarah Lockey, head of customer success at Open Bionics, says the need for the role became clear once the firm noticed growing demand for the product, yet a lack of support available for those who needed it.
Gofundme chief executive Tim Cadogan visiting the Open Bionics team.
Lockey uses the techniques gained from her lifelong experience of fundraising, which she did to support her daughter and the loss of her hands from Meningitis.
“I’ve been there as a parent, and I know how daunting it can be, and how it can be a massive struggle,” she says.
Open Bionics crowdfunds through its charity vertical, the Open Bionics Foundations, which receives the amount raised per campaign and pays for the individual’s product thereafter.
This helps avoid any concerns around fraudulent activity, which has become a worry among various crowdfunding platforms such as Gofundme over the years.
To date, Lockey and the business have raised a total of £354,203 in the UK through 53 fundraisers.
Another business success story is the start-up Beech Band, founded this year, which set up its Gofundme campaign just last month and has since raised nearly £18,000 of its £20,000 goal.
The start-up is on a mission to build a low-cost tapping sensation device to help people with Parkinson’s and similar conditions communicate.
The community-driven campaign most recently attracted a formal investment from Parkinson’s UK, which will help the device roll out into more testing stages.
Carl Beech, founder of Beech Band, says he decided to begin his journey with Gofundme because the platform connected the brand with the right audience: “helping people before profits is our approach.”
The common denominator
While Cadogan continuously stresses the fact that anybody can use Gofundme for “almost anything in your life,” he does say community is core for any successful campaign.
“If you’re a local business, or situated in a community where you want to build that support… it builds an emotional connection with people in your neighbourhood community – I think that’s the most powerful component,” he says.
Because donation-based crowdfunding is no way to raise the institutional capital a business would need to properly scale, Cadogan says there are lessons to be learned from the act of asking people for money. Whether that be with the incentive of offering a financial or emotional reward.
“I obviously run a company that enables a tremendous amount of fundraising, but I also have been a start-up founder, and I’ve done probably 200 pitches myself,” he says.
“It is hard for people, because most of us don’t like asking for help. It’s an emotionally difficult thing to do, but to be an effective fundraiser… you have to be a bit pushy.”