Everyone wants to better the world, but the mark of a true social entrepreneur is action. By Susan Cooney (Founder & CEO, Givelocity)
Social entrepreneurs employ strategies and tactics used for starting a commercial business – raising capital, acquiring customers, developing a marketing plan, the essential parts of creating any start-up – and apply them to companies that improve society in some way. It’s a commitment to the triple bottom line: social, environmental and financial.
As a social entrepreneur, I’m using technology, innovation and community to create a new ecosystem for giving, and this is my story.
The Growth of Tech
I rode the first tech bubble from the late 90s into the 2000s. I was a part of the founding team, alongside Tony Hsieh of Zappos fame, at LinkExchange, helping grow the banner advertising network to more than 800,000 sites. This meteoric growth led to a $265 million purchase by Microsoft in 1998. Next, I joined forces with the founding team of PayPal, helping coin that iconic name and navigate the early years of online and peer-to-peer payments. PayPal was purchased by eBay for $1.5 billion in 2002. I helped these companies make millions, but I didn’t feel satisfied.
These skills I was honing helping for-profit companies grow seemed like they could be used to support non-profits and NGOs, helping them become scalable and sustainable – real value-driven organizations. After all, I thought, isn’t a company’s role in improving quality of life just as important as making products to help us enjoy it? In fact, companies rely on people from their communities to grow their businesses and drive profits, so why shouldn’t they be putting more back into those communities?
The Cost of Fundraising
It is commonly reported that community philanthropy in the United States began about 100 years ago. The Rockefeller Foundation was established in 1913, and then in 1914, Frederick Goff, a banker from Cleveland began what we now know as the Community Foundation. Just over a century later, philanthropy feels like an ages-old industry that, in a lot of ways, still employs age-old strategies. Nonprofits spend on average 10 percent of the funds they raise on marketing to … raise more funds. How does that make sense? Based on projected charitable giving in the United States in 2013, that would mean these organizations spend approximately $31 billion on fundraising alone each year. That doesn’t feel good.
Couldn’t the marketing, development and process automating skills used by successful commercial companies translate into charitable fundraising? With today’s social tools, connectedness and technology, can’t we find a better, more cost-effective way to give?
The Aim of Social Entrepreneurship
I began using the creative problem-solving, product/market matching and B2C skills I’d sharpened with Silicon Valley startups to solve the problem of sustainability and scalability in charitable giving. I knew at the social enterprise I launched last year, Givelocity, we needed to look at supply and demand, market penetration and product adoption metrics to create a better solution for charitable giving in the United States. After performing a SWOT analysis to understand the pain points in philanthropy, I realized that giving is typically a singular behavior. We each have our own, often emotional, reasons, for why, where or how much we give. I needed to figure out what drove this market to spend money or time for something they cared about.
Givelocity is a community of like-minded donors that makes online philanthropy more sustainable, scalable and transparent, and therefore more impactful. This online community for shared giving allows donors to contribute as little as $1 per month to their favorite categories of social, environmental or other causes. They’re invited to, build or “move-in” to neighborhoods, choose a pledge amount and vote with others who care about the same types of causes – collective giving based on natural affinities.
With any new company, the going is slow, but we successfully raised a first round of funding, got our product to the market and have already managed to double the average monthly amount raised for charity. I credit these early stages of success to the wealth of knowledge my team and I gained in tech startups that, as more people are finding out, is applicable to any industry.
I am investing the start-up expertise, Silicon Valley connections and experience raising capital that I developed working for several early-stage, genre-defining companies and using it to turn the philanthropic world on its ear. That’s my social entrepreneur story.
Are you looking to become a social entrepreneur?
About the blogger: Susan Cooney is the founder & CEO of Givelocity, an online community for shared giving where members pledge to donate as little as $1 a month and create or join communities, or “neighborhoods,” built around shared causes. She also co-founded and served as VP of Marketing for remote PC repair service pioneer PlumChoice.