Here is a short description from the website:
"Fundable.org lets groups of people pool funds to make purchases or raise money. Similar to online auctions, Fundable's pages, called "group actions," are created by people who use this site. Each group action has a description of how much money needs to be collected and what it will do. Once enough pledges (not payments) have been collected, Fundable turns them into real payments and sends the total to the group action's organizer.
No one takes a risk when making a pledge: if a group action expires before reaching its total in pledges, Fundable deletes all pledges and never charges money. This lets you participate in a group purchase or fundraiser"
As the Business 2.0 article writes, this is the natural consequence of two important trends: the popularity of social-networking sites and growth of online fund-raising.
To be honest with you, I would have thought that this kind of site has no chance because I, as a user, never thought of wanting to go to a site to give money to others. But, obviously, there are lots of people who are wealthier and more generous than myself - so far they have collected nearly $70K in donations, despite an average gift size of $30. (Anyone remember MillionDollarHomepage?)
I think the challenge, just like any other new web service, is to prevent scams. This is a fund-raising site, so a couple of bad examples can totally ruin the reputation and recognition of the company.
I feel like here is another example for the need of a trusted online profile such as the one my company provides:)