How do you manage your charitable giving?
For many people donations are impulse investments—a friend is running a race to fund cancer research, you see a photo of animals being mistreated, a natural disaster impacts thousands of individuals and you want to do something, you strongly support a cause on principal and want to vote with your dollar.
Bright Funds, a New Way to Manage Charitable Giving
Bright Funds, an innovative social enterprise startup launched in 2012, takes an investment portfolio approach to charitable giving. Bright Funds is an online platform that makes the process of donating more like investing—where you can create an individualized portfolio, diversify your giving according to interests and causes, and research relevant non-profits within your selected “Bright Funds”.
Innov8Social had a chance to catch up with Julia Streuli, Head of Communications of the lean Bright Funds startup team to talk about the inspiration behind the idea, how the platform works, and what’s ahead for the company.
Read the Interview
Q1 | Innov8Social: What problem is Bright Funds addressing?
A1 | Julia Streuili, Bright Funds’ Head of Communications:
In talking to Julia her enthusiasm for the concept behind Bright Funds and its potential to shift how we think about charitable giving is immediately apparent.
Julia highlighted the fact that high net worth individuals and philanthropists often hire people to research nonprofits to receive donations, noting however; that there are not many tools available for the average individual to track, research, and design charitable giving.
Specifically, Bright Funds uses multiple lenses to identify impactful nonprofits including assessments from platforms such as: CharityNavigator, Charity Watch, Universal Giving, GiveWell, and Philanthropedia.Individual donors (i.e. Bright Fund investors) choose the percentage of giving for each of four broad sectors: water, poverty, environment, education, health, or they can choose their own fund of non-profits not included in the Bright Funds list. They can then research and select specific non-profits that serve their interest in the sector.Julia said that creating a portfolio based on sector was by design—because it shifts the focus from charities to the causes they champion. By aligning yourself with causes that are important, you can better assess impact on the issue, rather than the organization.
Q2 | Innov8Social: What tools does Bright Funds offer?
A2 | Julia, Bright Funds:
Julia overviewed the quick protyping and release of Bright Funds offerings. The startup launched a consumer-facing site in 2012 on #GivingTuesday, enabling anyone to create a profile and begin designing and tracking their charitable giving—all for free. The team is now in the midst of launching an enterprise platform.
Q3 | Innov8Social: How does Bright Funds vet the nonprofits featured in its funds?
A3 | Julia, Bright Funds:
As mentioned, Bright Funds has identified major five major categories, each of which form a different Bright Fund (i.e. there are currently 5 Bright Funds: water, poverty, environment, education, health, or customized fun).
If donors are interested in supporting a specific cause or effort, they can read through the descriptions of the non-profits for each Fund to identify the “facets” (or focus areas) for each non-profit and can select or deselect individual non-profits to support on that basis.
Julia noted that Bright Funds strives to be objective in selecting nonprofits to be in porfolio offerings. As mentioned, Bright Funds looks at 5 different insititutional charity evaluating bodies, each of which has its own criteria to identify funds. Pooling information from various assessment platforms enables a more holistic view of non-profits—so as not to favor more-established charities over newer ones, etc.
Notably, Julia added that consumers can add any nonprofit/favorite nonprofits. For companies, if they support a group of local nonprofits, Bright Funds can build company fund portfolio.
Q4 | Innov8Social: Can individuals support social enterprises in their Bright Funds portfolio?
A4 | Julia, Bright Funds:
Julia said that at this time, individuals cannot support a social enterprise in their Bright Funds portfolio. She noted that Bright Funds has a non-profit foundation, through which donation is channelled. So it is possible that a donation to social enterprise could go through the Bright Fund Foundation.
Q5 | Innov8Social: What legal structure has Bright Funds’ selected?
A5 | Julia, Bright Funds:
Bright Funds is structured as a for-profit startup and non-profit foundation. Specifically, the for-profit entity is a commercial fundraiser– which means that it has signed contracts with all charities in the fund to act as a fundraiser for the nonprofit.
Julia noted that originally both cofounders considered becoming a nonprofit, but wanted to be able to leverage the initial investment. The decision to become a commercial fundraiser was based on idea that 100% funds should be tax deductible.
Q6 | Innov8Social: Is Bright Funds scalable?
A6 | Julia, Bright Funds:
Julia noted that since Bright Funds is a cloud-based platform, it is relatively easy to scale.
Q7 | Innov8Social: How has Bright Funds been funded?
A7 | Julia, Bright Funds:
Julia shared that Bright Funds has been backed by investor funding. It closed its first round of funding from angel investors around time when consumer platform launched in 2012. It is also a portfolio company at Hattery in San Francisco. She also mentioned the immeasurable assistance and mentorship that Leila Janah, Founder of Samasource and Bright Funds Board advisor and mentor, has provided.
Q8 | Innov8Social: How is Bright Funds monetized?
A8 | Julia, Bright Funds:
Julia explained that with its commercial fundraising status, Bright Funds takes a percentage of the raise. And noted that the amount taken is often about half of what the non-profit would budget for marketing and attracting donations.