The ALS ice bucket challenge is thought of as one of the first charity campaigns to figure out how to use social media. But imagine that, every time someone posted #IceBucketChallenge on Twitter, money was automatically pulled from their checking account?
District start-up GoodWorld is aiming to put the Twitter-sphere’s money where its hashtag is – and now investors are taking notice to the tune of $1.65 million.
Here’s how it works: Once a donor signs up with GoodWorld, giving a donation to a charity becomes a one-step process that takes no longer than it takes to compose a tweet or a Facebook post. When a charity registers with GoodWorld, anyone can donate to the cause simply by adding #donate, followed by @[name of charity] on Twitter. On Facebook the donor has to use #donate in a post with the amount they’d like to give, posted on the nonprofit’s Facebook page. GoodWorld takes a 4.8 percent cut of each donation and another 2.2 percent goes to the credit card company, but the rest of each donation goes directly to the nonprofit groups.
The start-up launched last October with just seven charities, and now there are almost 200 nonprofit groups in GoodWorld’s system, and almost 4,000 donors have signed up. What started as a team of four has grown to 12 people based out of District start-up incubator 1776, and the company announced Tuesday that it has secured $1.65 million in seed funding.
Seeking to “democratize the landscape for donors,” as chief executive Dale Pfeifer puts it, the company says it is attempting to make it easier for donors to contribute to their favorite causes, beating popular crowd-funding sites like Indiegogo by just a few critical clicks.
“People hate to click links. They’ll sit there on Facebook and ask questions all day long but they won’t click and follow a link,” said Ryan Moore, vice president of social media fundraising and promotions at the Beagle Freedom Project, an animal protection organization that has piloted GoodWorld’s software. Moore says his organization has raised almost $40,000 through GoodWorld’s technology after just a few months.
And the instantaneous nature of donations makes it easier for nonprofits to conduct rapid-fire fundraising efforts in the event of a crisis.
“Since we’re a rescue organization, being able to remind people about a rescue that we’re on, and having people be able to donate simply by posting [on social media] has been revolutionary for us,” said Tim Woodward, chief operations officer at Animal Rescue Corps, a nonprofit organization that advocates against animal cruelty and responds to specific cases of animal cruelty. “It works particularly well for us when we’re on scene in the moment and people feel the urgency.”
Woodward’s team tested the fundraising software by asking the Internet for help with patching up some of their response vehicles that needed work. They agreed to be one of GoodWorld’s initial product testers in February, and in March they held a “fix up the fleet” campaign that raised $5,000 in less than a week. Woodward estimates they have raised more than $10,000 with the software.
The latest round of fundraising was co-led by New York-based Nyca Partners, a venture capital firm. Chris Liddell, an investor who served as the chief financial officer for both Microsoft and General Motors, also contributed to this round of funding. The raise includes an initial $500,000 round of investment that included Katharine Weymouth, the former publisher of The Washington Post.
“The ability to transfer money on social media with just a hashtag is revolutionary for the financial technology sector – a space ripe for disruption,” Hans Morris, managing director of Nyca Partners, which led the latest round of funding, said in a statement.
GoodWorld executives say their next challenge is figuring out how to turn online donation into a game, coaxing users to donate by finding ways to pit them against one another, such as offering prizes for the top donor on an individual post.
“Social media is a very new channel for donations that’s very different from what anyone else has done, this is more of a call-and-response activity,” GoodWorld’s chief executive Pfeifer said.
“People like to feel like they’re not just giving, they’re also receiving. They want to feel like they’re a part of something.”