The Power of Fundraising without “Fundraising”
Our Investment in FlipGive
We are pleased to announce one of our first investments in FVP I LP: FlipGive. We welcome Mark, Nick and team to the Framework family!
So, why did we invest?
In North America over 30M families participate in organized activities ranging from sports such as Football, Hockey, Soccer, and Baseball, to Cheerleading, Dance, and many more. Research shows that kids who are active in childhood sports have higher test scores, lower rates of obesity and adult medical care costs, earn more, and are more productive at work than those who don’t play sports as children.
But, the cost of these activities is rising at over 10% per year with average funding gaps of more than $2,000 per team according to our research. By 2025, we estimate the funding gap will approach $5,000 per team or on average another $500 per season per family.
At the same time, US Census Bureau data shows median household income doing something totally different; from 2008 to 2017 the median household income increased from around $57K to just over $61K representing an anemic year-over-year growth rate of 0.75%. In other words, the situation has become untenable as 60% of North American sports families spend between $1,200 to $6,000 per child annually with 20% shelling out over $12,000 on these activities.
At Framework, our goal is to back companies who can bring world-class solutions to markets experiencing tremendous friction. Alleviating these friction points unlocks enormous value for participants and can provide other valuable benefits as well. In the case of FlipGive, we deeply believe their fundraising platform is the single best solution to help reduce the financial burden associated with participating in organized activities. As a firm, we also believe that participating in these activities (especially at a young age) offers tremendous health and socio-economic benefits as participants enter adulthood. However, our investment was not made for altruistic reasons, rather, we believe that asking users to make simple and small behavioral changes that dramatically alter their financial well-being is an attractive investment opportunity. More importantly, with almost 600K users and millions in revenue FlipGive has only just begun to empower the people in this market.
How does FlipGive work?
Imagine your daughter joins a soccer team where the cost to play is $500. How would you go about paying for the season? Option 1: Pay for it directly from your pocket. Option 2: Fundraise by selling cookies, magazine subscriptions, frozen meat, or whatever other product you can think of.
FlipGive provides another option: raise funds by getting cashback on purchases you would make on day-to-day items regardless of whether you were fundraising or not. How? Once your team has signed up, invite all your team supporters (think Uncle Joe, siblings, and Nana) to register. Then, through an app, Chrome plugin, website, or digital gift cards, your network continues to purchase goods/services that they would already be buying, and the brands and marketplaces will automatically reward your team with up to 15% of the purchase price of your transactions.
With online shopping continuing to grow, and more and more transactions moving online or through digital payments, encapsulating large amounts of daily spend becomes easy with a percentage of that spend coming back to the team. Once the team raises over $100, teams can cash out and use that money to fund new jerseys, travel, team dinners, or other gear/services.
The value to online and physical brands is that traditional advertising is failing. Impact is virtually unmeasurable. But imagine that by partnering with FlipGive, you as a brand have the opportunity to directly engage with a hard-to-reach audience of household decision-markers year-round. Imagine the data, loyalty, and brand association benefits associated with hyper-customized and targeted campaigns that can be delivered to this audience. Not surveys or third-party research groups, just highly-valuable structured data that can help you establish more genuine connections with this hard-to-reach audience.
The benefits of using FlipGive are tremendous to both sides of the platform. In our view, FlipGive presents us with a unique opportunity to help eliminate the anxiety, discomfort, and friction generally associated with fundraising in order to broaden access to organized activities, while helping brands to increase engagement quality with a hard-to-reach audience.
Try it with your team instead of bottle drives, buying products for resale, or asking Grandma for money!
