Running a nonprofit is harder than running a for-profit.
There, I said it.
While there are some similarities, there are some stark differences between the two.
While a for-profit can raise millions of dollars with zero revenue to show because they have a sizable user base, a nonprofit has to painstakingly search high and low for grants and hope to find donors that believe in their mission to stay afloat.
The lack of sustainable nonprofit funding is a huge problem that is holding organizations, who are tackling really big problems in the world, hostage.
It’s the biggest obstacle I hear from the social entrepreneurs and nonprofit leaders I’ve encountered over the years.
Luckily, there are some really interesting startups working on solving the problem.
Two companies in particular are very interesting (disclaimer: both are Startups Give Back partners).
I first came across GroundSwell when they launched their equity crowdfunding campaign.
I immediately reached out as I saw a partnership in the making. Luckily, they felt the same way.
The company is super interesting. They’re solving the lack of sustainable nonprofit funding problem by leveraging something many of us use on a daily basis: debit cards.
Currently, when you purchase an item using your debit card (a Triple Mocha Frappuccino from Starbucks, for example) a certain percentage of that transaction (fees) gets routed back to your bank.
As you can imagine, banks are racking up boat loads of cash from fees.
However, GroundSwell is changing the game.
They partner with nonprofits to create branded debits cards. It’s just like the card you have in your wallet or purse. But, instead of the fees going to banks, they go to nonprofits.
Every time you make a purchase, you help create a recurring revenue stream for a nonprofit!
Best of all, you don’t need to change an existing bank relationship. Your current bank can link to your GroundSwell powered card, and you can transfer funds to the card easily.
Funny enough, I came across Fundraise Up when they launched their equity crowdfunding campaign too.
There’s a running theme here.
Fundraise Up is an A.I. powered donation technology startup based in New York.
They’re breathing new life into the archaic donation technology that nonprofits use today.
I had a chance to connect with the CEO of Fundraise Up, Peter Byrnes, earlier this year. He gave me a demo of the product and I have to say, it’s one of the most user friendly technologies I’ve seen in a long while.
The design is elegant, and the technology gives nonprofits new capabilities that will help them further share their stories and, more importantly, increase donations.
Currently, Fundraise Up is seeing a 32% conversion rate for the donation pages that use their technology. The industry average is 15%. This means that the nonprofits who are using Fundraise Up see more website visitors complete a donation transaction than organization who are using another solution to collect donations.
I absolutely believe Fundraise Up is going to help a ton of nonprofits now and far into the future.
I love seeing technology companies use their talents to bring innovation to the nonprofit sector.
I can’t wait to see how companies like Fundraise Up and GroundSwell shake things up.