Bright Funds: Targeting The New Philanthropist

This is a piece put together for a local nonprofit, which is targeting the millennial demographic for donations. Bright Funds is an emerging company poised to make a huge impact for both nonprofits and donors alike, with its revolutionary online platform.

BRIGHT FUNDS

Millennial Strategy – Direct Targeting / Time Horizon: Now – 3+ Years

In an effort to sustainably tap into the heaviest concentration of wealth and philanthropic vigor within the millennial generation, one of the best places for Saving Moses to focus its time and energy is with up-and-coming company called Bright Funds, Inc. Founded in 2012 and based out of San-Francisco, Bright Funds was created to inspire and engage the next generation of donors to become strategic philanthropists through its own revolutionary online platform. Whether operating as an individual philanthropist or giving charitably through one’s employer, the next generation of donors will most certainly be leveraging Bright Funds’ online services and platform technology on a global scale to participate in the booming and expansive world of impact investing (Quinn, 2015).

As co-founder and CEO Ty Walrod recently noted in a Bloomberg radio interview, there has been an epic paradigm shift in the way people think about giving. Whereas in the past, donors would take a general bottom-up approach and give to select organizations with minimal accountability and connection, millennials of the current generation are centering their charitable energy and attention more holistically on the causes that resonate most with them, and where rewarding impacts and outcomes can actually be realized (Quinn, 2015).

Bright Funds works in two critical ways to address this shift. In serving its own business needs, Bright Funds partners with leading global companies, where nonprofits like Saving Moses can readily tap into a swelling and sustainable donation pool. As we know, the workplace is changing as millennials view their jobs, careers, and employers completely differently than previous generations (Horowitz, 2015). In order to attract and retain talent within the millennial generation, employers are having to pay far greater attention to their employee’s needs and the issues they care most about (Scott, 2015). In partnering with Bright Funds, companies can easily join in and help their employee’s causes, while magnifying the impact they are having through the Bright Funds platform (Quinn, 2015).

While many companies take on their philanthropic and corporate social responsibility (CSR) efforts in-house, few are able to build an impactful program around all of the wide-ranging causes their employees are focused on. For a small fee (7.5% of each transaction processed), companies of all sizes can cater to employee’s causes through Bright Funds’ platform technology. In including the additional costs to actually move money to the charities themselves, Bright Funds is saving nonprofits roughly half of what it would cost them to raise money through traditional mediums (Quinn, 2015). In fact, many times, larger companies will not only match charitable employee donations, but pick up any fees associated with Bright Funds’ services so that respective nonprofits receive 100% of its donations and employees are kept happy knowing their employers truly support the causes and issues they care most about (Quinn, 2015).

On an individual level, thousands of new donors (and growing) are able to effortlessly take philanthropic action and get an unparalleled giving experience through the Bright Funds platform. In an effort to align itself with the millennial aspiration to impact overall causes versus a single dedicated organization, Bright Funds is actually structured closely to the classic mutual fund business model. Rather than donate to one single nonprofit or invest in a single company’s stock, Bright Funds allows its users to buy into individually created “community funds” or into the company’s very own proprietary “Flagship Funds,” which much like traditional mutual funds, give the new generation of philanthropists an opportunity to “invest” in a basket of best-in-breed charities dedicated to specific causes, such as education, poverty, or even, saving babies lives (Quinn, 2015).

Within a very crowded field of roughly 1.5 million operational nonprofits worldwide, Bright Funds has initially narrowed its focus to 50 nonprofits spread across six actively managed Flagship Funds:  Improve Education Fund[1]; Alleviate Poverty and Promote Economic Growth Fund[2]; Protect the Environment Fund[3]; Provide Clean Water, Sanitation, And Hygiene Fund[4]; Improve Global Health Fund[5]; and Uphold Human Rights Fund[6](Bright Funds, 2015). Nonprofits that are being considered for inclusion in a Flagship Fund are highly scrutinized and carefully vetted by the Bright Funds team for impeccable financials and successful track records. By screening nonprofits through a composite score based on assessments from third-party ratings companies like GiveWell, Philanthropedia, Charity Navigator, CharityWatch, Universal Giving, and Guidestar, Bright Funds assures all of its Flagship Fund “investors” that their charitable giving is being used in the most efficacious way possible to address the cause(s) most important to them. Not only is each dollar donated going further, but in return, Flagship Fund donors are regularly getting back detailed reporting from Bright Funds on how their donations are actually making a difference to their respective cause(s) (Bright Funds, 2015). Individual users of Bright Funds are not only empowered to give within Bright Funds’ centrally-organized, 100% tax-deductible online vehicle, but can take tremendous comfort in knowing that any “investment”’ into a Flagship Fund is not only not being wasted, but is actually making a positive impact across various target areas with verifiable results (Bright Funds, 2015).

Outside of the Flagship Funds, individuals can actually take even more personal ownership over their charitable enterprises. Again, much like investing in stocks within the financial services world, individuals can not only shop around and donate to individual charities featured on the Bright Funds platform, but perhaps more interestingly, can create their own “community funds”. Just as a mutual fund manager would select a basket of stocks, bonds, etc. for his or her specific fund(s), Bright Funds users can create their own funds by adding nonprofits that align with their fund’s respective cause(s) (Bright Funds, 2015).

While the ultimate goal for Saving Moses (with respect to the Bright Funds millennial strategy) will undoubtedly be eventual inclusion into one of Bright Funds’ Flagship Funds (see Addendum below), there is still plenty to leverage within the platform in the meantime. Syncing up seamlessly with the millennial attraction towards cause, impact, accountability, and social connectivity, Bright Funds allows this next generation to feel like legitimate philanthropists and actual stakeholders, versus donors of the past who had little information into how their charitable giving really impacted select organizations. In an effort to raise awareness of Saving Moses and its mission, create some buzz, and ultimately tap into the millennial donor pool, CARE Consulting has already taken the liberty of registering Saving Moses with Bright Funds as a featured nonprofit, while also creating a community fund dedicated to its very unique humanitarian cause. The MULA Fund (including nonprofits focused on global humanitarian issues where the need for care is Most Urgent and help is Least Available) is currently up and running via Bright Funds, with a foundation set to spur on a global viral campaign focused on millennials to #donatemula (see Twitter).

Addendum: Saving Moses Inclusion into a Bright Funds’ Flagship Fund

With respect to the longer-term strategic initiative to eventually see Saving Moses included as a portfolio constituent in one of Bright Funds’ premiere Flagship Funds, several items must be addressed over the next few years. The integration process is heavily driven by both the individual Bright Funds donors, as well as an in-house team at Bright Funds of Flagship Fund creators. With respect to the growing number of individual users and donors of Bright Funds, Saving Moses can immediately direct its focus and attention towards promoting both its featured status as a registered Bright Funds nonprofit, as well as spread the word about its very own MULA Fund, where Saving Moses is currently spearheading a worldwide campaign for millennials to #donatemula.

It will be imperative going forward for Saving Moses to utilize all of its social media channels to promote the two donation vehicles currently available on Bright Funds. Because many social media users often feel like contributions have already been made through sharing or a public endorsement such as a “like,” etc., many nonprofits actually decrease their chances of a donation if prospective donors are only drawn to the nonprofit website (Arrillaga-Andreessen, 2015). However, if a millennial leverages social media to discover Saving Moses on the Bright Funds platform instead, he or she will be met with an additional layer of social connectivity and engagement, where a donation (or even a public endorsement) can be scaled up and magnified in an unparalleled fashion (Bright Funds, 2015).

With a detailed focus on getting millennials to donate or “invest” in Saving Moses through the Bright Funds platform, it is likely that with a bit of success, Saving Moses will eventually catch the eyes of the Flagship Fund creators. In the meantime, it can only help to be as engaged as possible with the Bright Funds team as Saving Moses marches closer to possible inclusion in a future Flagship Fund. Of course, sharing any big stories of inspiration, success, and detailing the continued motivation behind Saving Moses’ mission will all help influence the team at Bright Funds.

From a more quantitative side, Saving Moses should pass along any tangible statistics (i.e. $38 funds 1 month of malnutrition feeding in Angola; $0.65-$0.80 of every dollar going straight towards saving babies) to the Bright Funds team as often as possible. All of this information can be added to the Saving Moses featured page on Bright Funds. More importantly, however, Saving Moses can significantly help its prospect of landing a spot in one of the future Flagship Funds by ensuring that it’s featured and listed on all of the charity rating websites (in addition to its current rating on ECFA). Below are the websites the team at Bright Funds reviews when vetting the nonprofits that comprise their Flagship Funds, as well as the criteria that must be met for review and high marks:

“GiveWell, aka The Clear Fund, is a nonprofit 501(c)(3) tax-exempt organization that performs exhaustive work to determine a very selective list of nonprofits working to change the world. Each charity selected by GiveWell is selected over tens of thousands of other candidates” (Bright Funds, 2015).

Essentially, getting selected and rated by GiveWell is like graduating to the major leagues of nonprofits. For Saving Moses, this will be an incredible undertaking, but would be well worth the effort due to the prestige GiveWell has in the philanthropic marketplace. Appearing on the radar screen of GiveWell will require a major commitment by Saving Moses in the years to come, but it can be done. In its simplest form, GiveWell requires that applicant charities meet the following criteria:

  • The organization is working on a program that serves the global poor and has strong independent evidence of being effective and cost-effective.
  • The organization is willing to provide detailed information with GiveWell about its programs, most or all of which can be shared with the public. This involves committing a significant amount of time to communicating with GiveWell in order to answer their questions.
  • For more detail on applying for consideration: http://www.givewell.org/apply-for-consideration

While GiveWell may seem out of reach at the moment, GuideStar is a website Saving Moses should immediately make itself familiar with. GuideStar is essentially a public charity database that simply collects, organizes, and presents the information nonprofit donors want (i.e. tax filings, historical data, etc.) in an easy-to-understand format, while remaining completely neutral. GuideStar is purely a public service organization with a mission to provide nonprofit information to as broad of an audience as possible at no cost to its users (Saunders, 2015).

Saving Moses should immediately create a free report within GuideStar:  http://www.guidestar.org/rxg/update-nonprofit-report/index.aspx

With a full and robust report on GuideStar, Saving Moses should likely be able to catch the attention of Philanthropedia. Philanthropedia is a division of GuideStar, and is a site where experts rank the top nonprofit organizations on various criteria in their survey. Each charity selected by Philanthropedia received the highest relative rankings by a panel of subject matter experts (Bright Funds, 2015). Many of these experts are foundation professionals, researchers, and nonprofit senior staff members, who typically have on average 8-20+ years of experience in their respective sectors. The experts recommend nonprofits based on their impact and other organizational strengths, but are not allowed to recommend the organization at which they work.

  • Charity Navigator (http://www.charitynavigator.org/)
    “Charity Navigator is an independent American nonprofit corporation that evaluates charities headquartered in the United States. Its stated goal is “to advance a more efficient and responsive philanthropic marketplace in which givers and the charities they support work in tandem to overcome our nation’s and the world’s most persistent challenges” (Wikipedia, 2015).

Currently, Saving Moses does not have to worry about Charity Navigator, as it is ineligible for a rating at this time. Specifically, Charity Navigator requires that nonprofits have public support of over $500,000 and total revenue that exceeds $1,000,000 in the most recent fiscal year. Additionally, Saving Moses must be in operation long enough to submit at least 7 years of Forms 990 to complete an evaluation.

With that being said, Saving Moses can be found on the Charity Navigator website, and can direct users to make a donation here:  http://www.charitynavigator.org/index.cfm?bay=search.profile&ein=452894444#.VUhNPPlVikp

“CharityWatch is operated by the American Institute of Philanthropy (AIP). AIP reviews and ranks charitable organizations on numerous criteria including percent spent on charitable purpose, cost to raise a given amount, years of available assets and other criteria, after which each is assigned a letter grade with a + or – designation” (Bright Funds, 2015). Bright Funds selects charities for its Flagship Funds that rank B+, A-, A, or A+.

Again, the $1,000,000 threshold in revenues must be met before CharityWatch reviews Saving Moses. Right now, CharityWatch rates approximately 600 charities, diving deep into how donations are really being used by nonprofits. The organization specializes in exposing nonprofit abuses and advocates for the interests of the donor. As a charity watchdog organization, the charity selection process is purely donor-driven. CharityWatch will not accept requests from charities that ask to be rated, nor do they charge charities to be listed in their publication or web site, or for the right to publicize their findings (CharityWatch, 2015).

“Universal Giving ranks charities using their trademarked Quality Model™, which includes verification against terrorist lists imparted by the U.S. Treasury Guidelines and in compliance with the Patriot Act, and independent review of finances. Universal Giving also examines NGO track records and management teams in addition to working with a Worldwide Advisory Board of international experts who recommend NGO Partners” (Bright Funds, 2015).

“The organization focuses on raising money for international charities through its web based marketplace, and on matching volunteers with global opportunities. UniversalGiving is a resource for people who want to give, but don’t know how. Visitors to their site can search by country or cause, and are given a list of opportunities to give or volunteer. If you don’t want to search, they’ve also gathered their top volunteering opportunities and top gift package opportunities. Gift packages are options to give to a cause on behalf of a loved one. Alternatively, UniversalGiving also lets you buy a gift certificate, so your friend or family member can choose their own cause” (Wikipedia, 2015).

This is another essential website for Saving Moses. Saving Moses should immediately register itself with Universal Giving as a featured NGO:  http://www.universalgiving.org/about_us/ngo-services.jsp

Because Universal Giving’s vetting process is so rigorous, Bright Funds considers inviting all the nonprofits recommended by the organization into one of their Flagship Funds.

Other Important Sites:

The National Center for Charitable Statistics (http://nccs.urban.org/)

  • Is a database of over 1.5 million active nonprofits that includes tax filings and other historical information, with records going back to the 1980’s (Saunders, 2015). Saving Moses can register online and add pertinent information onto its profile page to enhance the user’s experience (Saunders, 2015).

BBB Wise Giving Alliance (http://www.give.org/)

  • “Vets 1,400 national charities and 10,000 local charities based on 20 standards of accountability. If a charity doesn’t meet all standards, the reasons are identified and explained. Charities don’t pay to be evaluated, but ones that meet all the standards have the option of paying to display a BBB accreditation seal” (Saunders, 2015). Saving Moses is not currently listed on the website, but CARE Consulting has taken the liberty of requesting that BBB create a report on your behalf (Saunders, 2015).

References:

Arrillaga-Andreessen, Laura. (2015). Disruption for Good. Stanford Social Innovation Review: Philanthropy.

Bright Funds, Inc. (2015). San Francisco, CA. www.brightfunds.org

Horowitz, Sara. (2015). Why Millennials Understand the Future of Work Better Than Anyone Else. Fast Company:  http://www.fastcompany.com/3044478/the-future-of-work/why-millennials-understand-the-future-of-work-more-than-anyone-else?position

Quinn, Vonnie. (2015). The Bloomberg Advantage Podcast. Bloomberg L.P. Bloomberg Radio: http://media.bloomberg.com/bb/avfile/Economics/On_Economy/vInCMGFbQhlA.mp3

Saunders, Laura. (2015). How to Vet a Charity. The Wall Street Journal:  Weekend Investor. Saturday/Sunday, May 9-10, 2015.

Scott, Ryan. (2015). Millennials Rule at Giving Back. Forbes.

TriLinc Global. (2015). Millennials and Impact Investing Go Hand in Hand: http://www.trilincglobal.com/trilinc-blog/millennials-impact-investing-go-hand-hand/

Wikipedia. (2015). Charity Navigator:  http://en.wikipedia.org/wiki/Charity_Navigator

Wikipedia. (2015). Universal Giving:  http://en.wikipedia.org/wiki/UniversalGiving

[1] Improve Education Fund:  New Leaders; Teaching Matters; KIPP Foundation; Jumpstart; Safe Passage; Bell; Youth Speaks.

[2] Alleviate Poverty And Promote Economic Growth Fund: Innovations for Poverty Action; Small Enterprise Foundation; Coalition for the Homeless, Project Concern International; Oxfam America; The International Institute of Rural Reconstruction; Kick Start International; iDE; Techno Serve; Care; BRAC; Child Fund International, Usa.

[3] Protect The Environment Fund: Environmental Defense Fund; The Trust for Public Land; Resources for the Future; African Wildlife Foundation; Amazon Conservation Association; Wild Earth Guardians; Trees, Water & People; Rainforest Trust; Forest Trends; The Sierra Club Foundation; League of Conservation Voters Education Fund.

[4] Provide Clean Water, Sanitation, And Hygiene Fund: Water for People; Water.org; Water Aid; Charity: Water; Wash Advocates.

[5] Improve Global Health Fund: Elizabeth Glaser Pediatric Aids Foundation; Diabetes Action Research and Education Foundation; Path; Cure Alzheimer’s Fund; Guttmacher Institute; Project C.U.R.E.; Possible; The Food Trust; Alliance for a Healthier Generation; Cancer Support Community.

[6] Uphold Human Rights Fund: The Center for Constitutional Rights; The American Association of People with Disabilities; The Polaris Project; National Immigration Forum; Center for Victims of Torture; Equality Now.

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