Donation Economics

April 26, 2020

Instead of charging a flat transaction or ‘platform fee’ several web platforms have switched to donation / tipping systems.

Examples :

GoFundMe no longer charges a flat ‘service fee’. Instead, at checkout the donator can select a ‘tip’. These tips start at $1 recommended.

BandCamp Artists have the option of enabling ‘Name Your Price’ on their album sales. Their fans can enter a price or download it completely free.

What are the implications of this?

The ‘recommended’ or ‘minimum’ tips could be higher than a flat platform fee.

Their revenue shifts to being based on ‘social obligation’ rather than a price.

It is possible that their revenue is actually much higher with the 'name your price' model then a flat fee