How one startup pivoted to massively scale up charitable giving

July 26, 2011 (Active Ride Shop via Flickr)

Bright Funds wants to “democratize philanthropy,” said Rachel McMillan, the philanthropic startup’s NYC Client Success Manager. McMillan recalled the company’s CEO, Ty Walrod, using those words as she relayed them over a cup of cooling green tea.

Founded in 2012, the San Francisco-based startup is seeking to streamline charity and volunteering to make giving an investment, not an afterthought.

Initially, the startup allowed individuals to learn about and donate to any of the 1.5 million nonprofits that exist in the U.S. through their platform. “You could donate to a Hillary campaign or you could donate to a Trump campaign. There’s an agnostic sense about it,” McMillan said.

The platform also allows users the option to donate to their nonprofits of choice on a monthly basis and view their contribution history. All donations made through Bright Funds, no matter how small, are tax deductible too, so the platform generates a comprehensive “1-click tax report” of all the donations a user has made.

In terms of scale, simply targeting individuals isn’t the most impactful method of charitable giving.

Bright Funds had to think bigger: it decided to pivot to enterprise donation. In addition to allowing individual users to join and donate, they now target entire companies, giving all their employees the option to donate. Employees can now deduct donations from their salaries — if they opt in, of course.

At first, the company faced technical challenges implementing this form of payroll giving but was able to build on the foundation it had already created. Now, companies who work with Bright Funds kickoff with a two-week launch introducing the platform, letting employees know the flexibility they have to donate. Some companies match their employee’s donations as well.

“Make sure the opportunity you are pivoting towards significantly outweighs the original market,” Walrod said of Bright Funds’ decision. The company’s pivot accomplished product/market fit, which is startup lingo for providing a product or service that fulfills a need in a given market. They’ve gotten more than a dozen companies on board in NYC and many big name companies in San Francisco such as Thrillist, Mic and Foursquare.

Despite the positive results and the altruistic goal, Bright Funds is based on giving, which is not always a prioritized choice. That begs the question, is its business model sustainable?

From her experience with companies that have joined Bright Funds, McMillan’s gotten the sense that they’re truly interested in giving rather than seeking to put up a charitable front. Bright Funds creates a habit of philanthropy, making charity something people commit to, she said.

Millennials also play a role in Bright Funds’ sustainability, McMillan added. Gone are the days when giving could only be done by a person of means: many millennials want to help the causes they believe in, especially when doing so has never been easier.

“What can we do to help? That’s always the question,” said Sarah Mardam-Bay, a 24-year-old senior art director at New York-based healthcare marketing firm CDM Group. She’d like it if her company deducted her charity from her paycheck, organizing her giving and helping her feel like she’s made a difference.