Building Tech for Civic Life: An Interview with Public Good Software
From Lumpen#125: The Placemakers and Placetakers Issue
Jason Kunesh and Dan Ratner formed Public Good Software, Inc. after working the 2012 Obama campaign. At the helm of the tech team for the push to re-elect the President, they ran one of the most successful donation campaigns ever put together. Public Good is an online platform that connects non-profit organizations to donors and volunteers, and helps those organizations maximize their efforts. I met with Jason, the CEO, and Charlie Festa, the Director of Community, to discuss the company and its vision.
Kyle Gaffin: What was the impetus for the formation of Public Good and what is its mission?
Jason Kunesh: It started for me…boy, I’m trying to think where it started for me. I’m a tech guy, and mostly on the product side. So it’s always been my role to figure out how people can use technology, and how to make it more human. And so I’d been doing that – I did it at Orbitz, I did it as part of the founding team of this thing called The Point, which was a collective action that became Groupon. And at the time there was all this crowdfunding stuff going on – Change.org was coming out, Kickstarter came out soon after. There were a bunch of ideas about how you could use technology in this area. I started my own firm and was doing design work, basically UX and ideation, and we were able to do some work around healthcare, with Mayo Clinic and with New York Presbyterian, you know, how do you make healthcare more human? We did One Percent for the Planet, some other stuff like that. I guess we were pretty activist for doing UX work.
In the midst of all this, my younger daughter was born three months premature. And this was when there was all this Obama death panel, Sarah Palin saying they’re going to kill your grandparents kind of bullshit – and so I’m watching this, I’m at home with my older daughter, and I get a call from the insurance company, “Hey, you guys filled a form out wrong in the emergency room, and you’re going to owe over half a million dollars if you don’t get this thing faxed into our office, signed by a doctor, by five o’clock on Friday”… it’s like four-thirty on Friday, so I’m freaking the fuck out. My wife is at the hospital, because we did shifts as our daughter stayed in the NICU for a couple months. I call her, she loses it. A social services worker was there who’d seen this before and helped, got us straightened out – grabbed a doctor, prepared the stuff, got the fax in at like four-fifty-something, and we were fine. But we would have been broke. And we were doing everything right, we had insurance, we were doing everything you’re supposed to do – and that really struck me.
Vivian got out of the hospital and she was great, she’s our younger one, and I bet 18 months later, she was walking. I take her up to see my folks, and that was the last time I really saw my mom. She had a brain aneurysm and two weeks later we took her off life support. I wrote her obituary, and it really made me think, “What I am going to do with my life?” We had a celebration of life for her – she didn’t want a funeral – and about a tenth of our town showed up. It’s this little town in Wisconsin of about 12,000 people and there were over 1,000 people. And it’s not because my mom was some big prominent figure, she was just this lady who was involved in all this stuff – community garden, quilt club, volunteered at the animal shelter, all this stuff, and she touched all these different people. And the question was, “What does this mean? What does it mean in your own life?” About a year goes by and I’m still kind of asking that question. My firm’s going great, but it’s like, is this what’s going to be on my obituary? – “Ran a great little firm in Chicago.” You know, not bad, but, meh…
Some friends of ours worked at a place called Sandbox, a venture place down the street here, and they would ask me from time to time to come in and do a Design 101 for startups. So I show up for that, and it’s actually the Obama re-election campaign. And the pitch was pretty simple: “We’re going to lose, because we’re going to be outspent – unless we use technology to make our volunteer base and field teams more efficient. If we can give them great tools to make it easier for them to connect and engage with people and easier for them to figure out how they can contribute the most, then we’re going to win.” And so I said, “Yeah, I’m in.” I sold my part of the firm and just basically jumped in with both feet.
It actually felt kinda like walking back to the beginning of my career, I mean, the stuff they had was dated. We’re looking at all this and, working in such a compressed time frame, we’re like, “O my God, maybe we can buy some stuff, and we’ll get this and we’ll get that, and we’ll kinda plug it all together and we’ll make this thing work.” And we realized that there was really nothing out there that modeled how communities get involved. The sales force models how you sell to somebody: you’re a prospect, then you’re a hot lead, and then you’re a customer – or I kick you out of the funnel. But that wasn’t the job. In a field office the job is, let’s talk and figure out what you’re good at, let’s figure out what we need, and let’s figure out that intersection. More importantly, let’s figure out what your story is and why you want to get involved, and I’ll tell you my story and why I’m involved, and that makes us a community. And then we’re going to figure out what we can do together to move that forward. So it’s not “up or out,” it’s, “Where do we put you so that you feel valuable and you want to be there, and you’re a positive influence on people around you, where you’re a valuable part of the community?” We knew we weren’t there to lead with tech, but to augment and support those connections happening.
So we went through that and it feels a little bit like a strange dream. We won. I think I slept maybe 6 hours of the previous 72, and I meet the president and Eric Schmidt, a Google engineer says, “Mr. President, I want to introduce you to the technology leadership that enabled your re-election.” Well, that’s a pretty good intro. He comes by and he shakes your hand and he hugs you and thanks you. And he did that to everybody in that room, I mean, he hugged 500 people. If I’d been there I would have been making a victory lap around the city or eating pancakes in my hotel suite or something. But he got up and did that and then went out and continued being president. You just ground out 18 months and you feel like crap and you realize, this guy’s been doing it for the past four years, and he’s just signed up for four more years of it. And so at the end of it he gave this talk, and we all cried, and he said, “You’re our legacy – you’re my legacy.” And what you do is what’s going to impact the country.
Dan was smart, he took a vacation, but I wasn’t, I tried to see if we could get all that tech open-sourced and out in the real world, which wasn’t going to happen for a variety of reasons, but we saw there was still this big need. Dan had co-founded Sittercity with his wife Genevieve, which was really one of the first sort of social entrepreneurship ventures in tech, and so he saw what it was like to make this kind of marketplace. How do you make babysitting, with all its really human components, feel safe and trustworthy online, so that people can actually feel that connection? And like I said I’d done a lot of stuff with Orbitz and Groupon, and so we came out of this and thought, well you could do this work for the Red Cross or Feeding America and you could have an impact. But they have massive budgets and they’re able to buy the best software in the world. On the Obama campaign, we spent 40 million dollars on engineering. Name a non-profit that can do that outside of the few I just mentioned. It’s pretty small. So we said, “What if we took the idea of an online marketplace and made this awesome tool set available for any non-profit? What if we can make the best and greatest stuff and make it available to everybody, just in a modern way?” You know, get rid of the contracts, get rid of the bullshit, get rid of the data islands, and charging people by record, and all these ways that software vendors try to nickel and dime organizations. If you can get rid of that and find a business model in there, the market’s big enough that if you can address the whole thing, you can still make a super profitable company and you can do it with the purpose of serving a greater mission which is to stop having these organizations worry about how to market the work that they do.
Charlie Festa: It’s giving them more time, it’s giving them the power to be able to do what they need to do. There are people out there every single day who are dedicating their lives to helping others, they’re putting other lives in front of their own and often that gap becomes so big – they get nickel-and-dimed and they don’t have the time to do what they can really do to help the community.
JK: Yeah, we want to be the team that every non-profit would love to be able to hire, doing stuff like A/B testing and building software and everything, but instead of having to hire us, they can just use the stuff we’re building and hopefully we can all learn together. It’s crazy to me that non-profits have to get wrapped up in this whole marketing game where it’s trying to quantify impact in this weird, nebulous way and trying to tell a story that will make people care and give money. It’s this whole separate set of concerns apart from the actual work they’re doing, and that’s just really strange to me. So we’re trying to help with all of that, not just with the transactional piece of it, but with the idea of a marketplace, finding ways to make it easy for people to engage and find this stuff.
The work Charlie’s been doing with the Take Action Button, it’s the idea of instead of marketing in the sense of just kind of pray-‘n’-spray – with radio ads or billboards or whatever – it’s doing it in a targeted, more effective way. Can you connect something to a piece of content, at the end of a Soundcloud piece, or at the end of a Youtube story, or at the end of the article – “Hey, you cared about this enough to go through this whole thing and learn something, here’s something more you can do.” Now you’re mentally ready, you’re in a moment where you can take a step. Can we capture you in that moment and say “Hey, there are these organizations working on this in your community, let’s make that connection happen.” And then the organizations can get together and communicate.
CF: Yeah, it’s an idea around taking action on a hard news story or something you never really felt you had the ability to address. And you know it’s kind of crazy, but one of the things that Jason and Dan were a part of during preliminary research was studying the differences between hard news stories and soft news stories. You see Paul McCartney announces a new tour and it has a million likes and favorites and retweets and you say, “Oh okay, I get it.” But then you have something that says, “Six year old shot playing in their front yard,” and there are likes and favorites about it as well. Well, the first question you ask yourself is, “Why the hell is somebody liking that?” But then you start to realize, well maybe they’re trying to bring awareness to this. They’re liking or commenting because they’re trying to bring awareness, but at that point you stop – that’s it. You could start this conversation online and have this whole complaint fest, or you could actually be delivered to something that shows people are doing good work on the issue.
One of the cool things about Public Good is the fact that, on the one hand, you have a cause, and, on the other, an organization, right? The organization is doing this singular work, and yet they’re working on these causes that are part of the bigger picture, the bigger issue that people may have problems with. And you start to see that the average person may not understand that there are organizations in their neighborhood that are doing this amazing work, even though they have this cause that they support. They had no idea that these people are in their neighborhood, or city, or state doing this work, and it starts to make people realize that maybe that change is actually possible.
JK: Yeah, we kind of had this theory of change that came out of the campaign as well. The theory is that people go from cause to community to finding the charity or organization, and then to contributing. You care about something – that’s why we start with the Take Action button, and we start with pretty neutral language – and you find a cause, and then from that cause you might be able to see that there’s this community that’s working on this stuff, and then we help you start to find those organizations. And that’s important, because these organizations, for the most part, don’t do a great job of marketing. You know, Metropolitan Family Services serves 80,000 families in Chicago every year, they’re 150 years old, and nobody knows about them. UCAN, on the North Side, started as an orphanage for Civil War orphans, and they’re still around, they work in nine blighted areas in the South Side, they’re building a huge center in Lawndale and they have massive impact in kids’ lives through this structured mentorship program, but so few know about them. And it’s this kind of invisible stuff that holds this city together, and holds the world together. And people often only know of the real “name-brands” – Greenpeace, or World Wildlife Federation, or others who can really afford that branding. So our thought is that the more we can kind of connect people and have them actually see these organizations doing all this work on the stuff they care about, near them, the more they will be able to say, “Okay, this is an easier way for me to engage on it.” And it’s behavior change. Because so often, you see something, and you get upset and then you just watch a rerun of Breaking Bad or you catch the latest Game of Thrones, and you say, “Fuck it.”
KG: So you target that moment where someone really wants to do something about an issue, and then make it easy for them to understand what can actually be done.
JK: Absolutely. Exactly.
KG: Walk me through how this would work for a non-profit. Let’s say I’m running a non-profit and I want to use your software, how would I get on board, and what support services would be available to me?
JK: You’d find us on our website, publicgood.com, and sign up there. We have a database of all the non-profits in America, and we would verify you against that database and make sure you are actually from the organization that you say you represent. You can also just be a group, and we are going to start signing up corporations as well, to have them say, “Hey these are the organizations we support.” But right now we’re trying to focus on getting it right for non-profits. So as soon as that background check is done, they’re automatically fundraising. They can start fundraising right at that moment. And then they can take a few extra steps, like putting in their banking information, because we don’t want to make anything harder for non-profits, that’s kind of our mantra. We’re a benefit corporation, so we have a social mission, and that social mission is to increase the capacity of these public benefit organizations.
We’re really careful that anytime we do something that involves us making money or touching the money of a non-profit, that we are always aligned. There are no contracts, no monthly fees, they own all their own data. They pay the credit card fees if nobody picks them up, but everything else is free. And of course they only pay credit card fees when somebody rings the till. When a transaction occurs and somebody opens their wallet, we say, “Hey, can you pay us, just as you are paying the non-profit?” And most of the time, the users actually pick up our fees, so the non-profit gets all the cash. Right now, with us, the effective cost of fundraising for a non-profit is about five percent. So it’s pretty low, and our goal is to keep guiding it down, to start to shift the cost to other players in the system – foundations and corporations that could start sponsoring processing fees. And then we do weekly webinars where we walk through things with the non-profits. We’re also trying to start to model what success looks like. So once you’ve signed up we can help you with what’s next, with how to run a successful fundraising campaign. There’s a big difference between an unsuccessful and a successful campaign. And it’s all about the way it’s presented and the way the story is told. So we try to help people find their story and tell it better. And Charlie’s been a big part of that, you know, we visit all of our non-profits. And one of the things we consistently hear is, “What are you doing here? I can’t believe you’re here!”
CF: [Laughs] Yeah, Paypal or Blackbaud have never shown up to someone’s place and said, “Hey, we’re building all kinds of cool stuff, and we just want to talk.” Because we care. I think everybody sitting in this office cares. They might not care about the same thing, but we all care about something going on, and are willing to take that to the next level and actually talk to human beings.
JK: We almost kind of feel – and it’s a weird analogy – a bit like Archimedes. Now, the reasons I joined the campaign were two-fold. One was healthcare and the other was the environment, but I’m not a doctor and I not going to invent the solar panel. But I know tech, I know how to make it useful for people. And so if we can use that as a lever to really raise the ability of all these organization to do better, then that’s a job well done.
KG: You mentioned the Take Action Button. I wonder if there are other ways that your software helps the average person who wants to give, but isn’t sure how best to do that or is just hesitant for whatever reason?
JK: We’re going to be transparent with you as an end-user. You are going to own your data as much as the non-profit does. Today, if you give to a non-profit, you get an email receipt, and that’s it. That’s wrong. You should have it as structured data that you can do something with. Whether that’s import it to Turbo Tax or do whatever else you want with it, that’s yours. That’s something you did. And you should know that, it should be transparent. You should know that we’re not going to serve you ads on our website, you should know that we’re not going to remarket your email address like some other social enterprises do so you’re going to start getting direct email from all these non-profits that you’ve never heard of and don’t care about, wasting their money and wasting paper and wasting your time. What’s the good in that?
CF: I think definitely one big thing is the verification of organizations on our platform. You know, taking that step.
JK: And I think we are going to continue to build on that. We don’t want to compete with Guidestar or Charity Navigator, but we want to start moving more and more to community. So if Charlie’s had a good experience with an organization, he can start talking about it with them on the site, or if he’s had a not so good experience, we can hopefully see the organization responding to it, saying, “Hey we’re going to change the way we’re doing this, let’s actually talk about this.”
When you make a donation to Public Good, we ask why you gave. And it’s a moment for the organization to start to have a conversation with you. “I gave cause I thought it was going to do this.” “Oh okay, well actually, we’re going to do this with it.” Because that can be a problem. With Hurricane Sandy, for example, people gave to the Red Cross and got really angry because the money went to mudslides in Washington. And there are good reasons for that, probably, but the Red Cross didn’t really have a way to discuss that outside of a press release.
CF: There’s the most recent story in the Atlantic about the cancer charities, where these dudes in Tennessee raised something like 180 million dollars and maybe a million actually went to charity, just operating phony organizations.
JK: We don’t necessarily want to be the gatekeepers of that, but we’re hoping the community can start to sort that out and figure that out. But I think really the biggest thing, with the behavior change we’re trying to make, is helping to show people that there’s value in their civic life or social capital. Which is a thought that we had in the Forties, and it’s kind of drifted away. So now we’re designing this thing called Actions, so we can point you to non-financial stuff that benefits organizations. People take a lot of volunteer work, that’s a big part of it, but it can be other stuff, too. We have an organization, for example, that wants people to turn off their faucet when they brush their teeth, because it saves a gallon of water every time you do it. Well, if everyone in Chicago did that, that’s saving millions of gallons of water per day. So just saying you’re going to do that.
CF: Making a pledge, to get people to really start engaging with stuff.
KG: So it’s not just helping with financial giving that’s a part of what you do?
JK: Yeah, exactly. When we started on the campaign the big thing was data integration. You know, we couldn’t tell if a person had liked us on Facebook, or had given money, or had showed up to an event, or had canvassed, or had voted. We knew maybe some of it, but not all of it, and it was embarrassing. Somebody might have given ten thousand dollars to re-elect the President, and then we’d fire off a three-dollar fundraising e-mail to them immediately after, making them ask, “Oh, why did I do that?” We needed data integration to avoid that, and so when we started here we thought that’s what we were going to do with organizations. But it became clear that the smaller non-profits really needed help with fundraising. And so we said, let’s build what the community needs and what they’re telling us is that they’re paying a lot for fundraising software that doesn’t work well for them, so let’s fix that. But the mission has always been broader. We don’t want to become a Big Brother where we own every piece of software that these organizations use. Let’s just make it all really simple for it to talk to each other.
For 2013, all we did was go around and talk to every different kind of non-profit we could find – hospitals, universities, direct services, advocacy groups, animal shelters, whatever people were doing. And by the first month we started the conversations that guided the whole rest of the year, which mostly had to do with spreadsheets. Everybody had some weird spreadsheet system where they would export their mail contacts over here and then I import them into this thing over here and compare it, and how do you know who your best people are? We’re trying to help answer that question.
CF: It’s connecting and creating that strong advocate for an organization that they may never have seen, or may never have had, or may never have even known existed. So through those actions and things like that you start to realize that we can connect people to one another. Let’s use this machine, this computer, for something good, and let’s make those connections happen.
JK: There are some similarities with fitness technology, too, with FitBit, for example. You might not know what you did in a given day, but eventually you can see, “Oh, I took this many steps or I need to take more steps.” Can you start to track your civic actions like that, and then by tracking them be able to say, “Oh, I really didn’t do much, maybe I need to get a nudge?” Maybe even start to do some of this gamification stuff – “Oh Charlie’s rocking it, maybe I should rock it, or maybe I should start to hang out with Charlie more and go do some events together.” People are ready for it, you know. Why are people in this generation impassioned about making change? It’s because the world is not what it should be, and every other generation in America looked forward to a brighter future, and now that’s not true. Now we have to create that better future. So let’s start putting some infrastructure in place, which, again, the lever we have is tech, so let’s start developing tech that helps support people when they do this stuff.
CF: And I think this could potentially band people together to create real change. ‘Cause I think it’s easy to get jaded over the years. I have, speaking for myself. Politicians don’t necessarily have my best interests in mind, and my alderman can only do so much. And it comes to the point where you have to roll up your shirtsleeves and say, “I’m going to contact my neighbors next door and we’re going to go out and clean our street, we’re going to go out and make our little world better,” and hopefully that catches on and makes things better, because you can only complain to your alderman so much. From what I’ve seen, from just those years of me being cognizant of what’s going on around me and of the way things work, it doesn’t work for me. I’ve worked for county complexes, I’ve worked for things like that, and they’re not working for me. But then you realize that there are folks out there that are kicking ass everyday and don’t get the attention that they deserve. And they are the ones creating the real change, and yet we look at one person and say, “Well, where is it? Why hasn’t the United States or the world changed? ‘Cause you promised us that.” And you can think like that, but at the end of the day it’s up to us and it’s up our communities to take action and get shit done, ‘cause I’m tired of it, and I’m mad as hell, and I’m not going to take it. [Laughs]
Now, I go on that rant, but it really does drive me up the wall, it angers me when you see people going on these rants on Facebook, and today was a perfect example, ‘cause some dude posted this rant on the Public Good timeline about President Obama and the Clean Water Act and it gets into the EPA in the 70s, and the first thing I see today is this email saying, “You’ve received a notification, somebody posted something on your timeline,” and my initial thought is, “Oh shit.” Laughs. And as soon as you click on it, you see this rant with all these links going to God knows where – just the URL alone you’re like “I’m not clicking that.” ‘Cause it’s total clickbait, and I think a lot of that stuff is ruining these platforms.
JK: A couple things related to that. One, this country has gotten a lot angrier with the advent of Fox News, with the idea that somehow you can shout at people, and that that qualifies as discourse, I mean, that’s a new thing. It’s been twenty years now, so we kind of take it for granted, but that’s not normal. Laughs. And second, you know, at the campaign we’d get all these letters and I would read them sometimes. Some of them were heartbreaking, like, “I don’t think anyone’s ever going to read this but let me tell you my hopes and dreams and what’s happening with my family, and the American Dream is going out for me.” Right, that’s basically the heart of it. And you look at the President and you realize, on the one hand, there’s this enormous power. But at the same time, he’s immensely constrained. And so there is a lot of power that a state senator, for example, can have, but the state senator can only know about a particular issue if people actually get engaged with it.
KG: You mentioned the Atlantic article about these huge scams in online giving, and I think most people are probably aware that that happens or that that can happen. But I wonder if there are other things that you think people should be aware of in the world of online giving that they may not know?
JK: Here’s one for you, and this is a crazy thing. You’re a non-profit, you get a piece of software. That software doesn’t actually deal with your money the right way. For us, we never touch a non-profit’s money. It goes through our system, but never does a dime go into our bank account. Now, you guys run a non-profit. Let’s say Charlie gives you money, that money goes to you, and there’s a separate transaction where we get paid for making that happen – bundled together but separate – we never touch your money. But there are a ton of non-profit vendors out there who totally mingle that, and it matters, because you’re going to tell Charlie, “This is tax deductible.” But technically, depending on how the money flowed, it may not be. And guess what, if the IRS audits someone, it’s not the software vendor, it’s you, the non-profit. They’re going to come after your non-profit, and the IRS is going to crush you. There’s a ton of vendors out there who don’t really care, but for us that’s not an option. We’ve spent an extreme amount of time making sure this works the right way, and there are others who do it too, but there are also some new players who don’t.
The other thing is that the average cost of fundraising, blended across all the different channels, is over twenty percent. For us, it’s about five, in the worst-case scenario, ten percent. But when you look at the majority of organizations using these older platforms, most of the time their cost of being able to take your money is sometimes fifty or sixty percent of the donation. It’s crazy. There are competitors that we’re displacing everyday that charge 15,000 to 20,000 dollars per year for a software license, then they charge usage fees on top of that…
CF: And then of course you’re putting marketing dollars into it, no matter how you look at it, you have ad fees…so if I give you five bucks, what are you really getting out of it at the end of the day?
JK: So we’re trying to make it the most efficient way for people to give. And again, we’re a benefit corporation. If we can make it more efficient and get more dollars to organizations, that’s good. Because if you look at the whole deal, there are about 30 billion dollars a year that are given by individuals online. You don’t have to take a huge hunk of every transaction. There’s enough there to make a successful, vibrant company without squeezing out money from all these other things that don’t actually benefit the people that are using this stuff. You can take a really small piece and still make a really good business, and that’s our goal. The better that we can be, the more efficient that we can be and the more that we can help these organizations figure this stuff out, the more these transactions are flowing, the more volume goes up and the more we can do.
I think the other big thing with online fundraising is that for the most part these organizations are hamstrung because most people only give the last two months of the year, which is another huge problem. If you can give recurring donations, the better it is for organizations. Because so often, they’re sitting there for ten months of the year, paralyzed – “Should I spend? I don’t know, what are we going to get in November?” Really?!? That’s your decision point in March? It’s crazy. I think if people knew that and spread their giving out, it would help a lot more.
KG: Why did you pick Chicago to be the home of Public Good?
CF: It’s the place to be.
JK: Yeah, it’s the place. So, first, we’re Chicagoans. But it’s more than that. A lot of people asked us to go to San Francisco, and said, “Why? So we can get on a plane and fly to Chicago or New York or D.C?” ‘Cause that’s where all the national non-profits are. It’s also the right mix. We didn’t want to go out and have to pay people 200,000 dollars a year so they could afford a studio apartment on Knob Hill, the economics just don’t work. And then, it’s the attitude.
CF: Freshwater people.
JK: Yeah, why do we have Lincoln Park? We have Lincoln Park because Marshall Field gave it to the city. We have the city that we have because there has been this history of people contributing to the civic space in Chicago. There’s a good mix here of technology and innovation, of civic tech – there’s been a history of civic tech here. We just feel it’s right. This is our home, and we understand the issues, and there are a bunch of great organizations working on those issues right here. If it’s not the headquarters, then it’s the number two.
CF: It’s a great city, there’s no doubt about it, it’s the place to be. There are great neighborhoods and people are caring. I think it means a great deal to the people who live here, the work that they do, the hard work that’s put into the city. You know, I don’t think there’s a single Chicagoan who doesn’t think about what happens here in the city on a daily basis.
JK: I’m a big Nelson Algren fan and I just think that we roll up our sleeves and we get shit done. We’re authentic, we’re hardworking, and we’re just going to roll up our sleeves and kick ass. And I’m not saying that people don’t work hard in other cities or anything like that, and we’ll need to play in other pools, we’ll need to do kind of the business-y things that happen both in New York or San Francisco, but just attitudinally … I don’t know, we all care about having good lives, but we’re not doing this with some idea of “Let’s build this and flip it.” Let’s build a lasting company that really provides value. Sometimes people claim that the Facebooks, the Twitters, the big ideas don’t come out of Chicago, but this can be a big idea that does, it’s just not going to take that kind of trajectory in the way it goes. We’re going to roll up our sleeves and do good work and get down in the trenches with the people who are using our stuff and really figure out how to make it great for them. Let’s just do that. Rinse, lather, repeat.
KG: Tell me about some of your success stories so far.
JK: It’s awesome when somebody comes on the platform and they can immediately turn off something that’s been costing them tens of thousands of dollars and they can feel that impact right away – we just allowed you to hire another intern, we just allowed you to run another program – something like that. We’ve seen some really positive things happen with a couple early adopters that we’ve been really happy with, like the Environmental Law and Policy Center, they’ve really pushed us, and, again, we’re developing this stuff with the community and they’ve been really noisy in great ways. NeighborSpace – there’s over a hundred community gardens in the city of Chicago and they’re all taking their plot fees through us. Those are really small organizations. Then at the same time we’re working with the Museum of Science and Industry and the Adler Planetarium just signed up last week. The Take Action Button has really done well. It outperformed our expectations, but we just need to get it out on more and more platforms.
CF: Yeah, getting it out not only to news sources, but to bloggers as well. Getting it out there from the smallest scale to the biggest scale. With the Reader we were like, “Oh shit, The Reader, that’s awesome,” but we want to make it accessible to everyone. I could have a blog and write about clean energy and generate my own thing and drive that issue.
JK: DuPage Children’s Museum flooded, and they were basically stuck. They’re already struggling, and then all of a sudden they’re struggling and they just had this terrible flood. Josh and Kelli on our team really helped them not only get the platform up but really said, “Here’s how you can do a quick campaign to explain what’s happening and get people involved.” They’ve only been on the platform a couple months and they’re already one of the biggest fundraisers we’ve had.
KG: What have you found to be the biggest obstacles starting out?
JK: There’s a bunch. Every time we do something, we’re breaking new ground and that makes every single aspect of what we do far tougher. Raising money is far tougher. There are some really visionary people that we’ve been lucky to work with, but it’s taken a lot, and a lot of investors are like, “Well, we have to compost.” And it’s like, “No!” But you have to understand that there are these two horses that pull the wagon and one is financial. We need to make money so we can keep the lights on and hire people, and our people shouldn’t have to wear hairshirts to come to work. It happens a lot in the non-profit sphere, where if you’re really good at what you do, you’re probably going to have a family, or your parents get older, or you want to buy a vacation home or whatever it is. And you’re going to say, “I could work at Google or Facebook and make five times what I’m making here, but I’ll still be doing good, I’ll write a check.” And that’s an ok choice but that’s not a choice you should have to make, either meaning or money. You should be able to do both.
So we said to our investors, look, we’re going to perform as a business and we’re going to do a great job, we’re going to give you a financial return. But we are going to make decisions based on our ability to deliver value and help non-profits, that’s number one. We have to make money doing it, but we have to make sure that that’s clear. Because without that mission then it’s too tempting to pivot away, especially as a venture capital-backed company, it’s too easy to say, “Let’s do photosharing,” or, “Well, it’s kind of easier for us to remarket and sell this data to somebody else.” You know, it’s easier for us to do all the kind of skeezy things that the larger social networks do, either to make money on the side or disrespect user privacy or all this other stuff. And we’re not going to do that. Because it’s not in our values. So let’s live those values and let’s not just have them as something that’s nice to have and that can be kind of you know gotten rid of at some point as we grow. Those are the reasons why we are going to grow, because that’s what people want. That’s what non-profits want, that’s what people want.
On the non-profit side, there’s a lot of skepticism, at least initially. It’s, “Oh, you guys are just going to get bought by Blackbaud, or you’re going to run out of cash, or you’re going to do whatever and you’re not going to make it.” I think now that we’ve been here for two years and we’ve had our software out for about eight months, people are starting to see that this actually can work and that it actually is easy. It’s coming together.
I think on the consumer side there’s still a ton of challenges. People are so used to being beaten down in this space and they’re so used to the next flashy thing that doesn’t pan out. I do think people are inherently good and have the instinct to trend that way – but it’s so hard, there are so many things that get in your way. It’s just such a struggle and then, of course, it’s not something that people have to do anyway. But when tech works well, it’s like a superpower. Take Uber – it’s the equivalent of me snapping my fingers and having my magic carpet arrive. It works and it’s incredible. And then you look at technology for charitable giving and its terrible – “I wanted to volunteer and now I don’t even know where I want to volunteer or why and I have to fill out this big form…” And so I think we’re still trying to solve a lot of that and figure out what are the things that people care about.
CF: Trying to get as many people involved as possible and have them provide as much feedback as they can. When I was at Threadless, we had this massive community of amazing people, and watching the community form over an eight-year period was awesome on so many levels. But that community helped us, they helped us translate things that we couldn’t translate ourselves. They helped us do all this amazing stuff and it helped me realize that if you make someone feel like they’re a part of something, it’s game on. Because you know what, man? We’re here on this earth for a very short amount of time, and we’re hurtling through space, and who knows? Who knows about any of the crazy shit that goes on in this galaxy? But at the end of the day, feeling like you’re a part of something feels incredibly fucking great. And this machine, this computer, has allowed everyone to get involved, ‘cause not everybody likes to get involved in-person. This machine bridges gaps and allows everyone to get involved. You’ve just opened the world to people who don’t necessarily like going out into the world itself, but yet they still want to participate and they still want to get involved.
JK: The other thing, I guess, is how slow the space moves, and that’s not necessarily a complaint, it’s good that everything doesn’t move at light speed. Sometimes change for the sake of change is not positive. But if you look at foundations, for example, foundations have enormous amounts of capital to deploy. They could be the equivalent of venture capitalists in this space. But there’s no roadmap and they’re used to moving at a very glacial pace, you know, a “five-year plan” that kind of thing. For a startup, five years might as well be an ice age. I do think we’re starting to figure out how to build a community with those folks too, because again we don’t see this simply as being a relationship between you and a non-profit, but as further developing this whole social entrepreneurship movement that’s happening in Chicago. You are not just your relationship with a non-profit, there’s your social life, your neighborhood, the place where you work. Media. Corporations. Non-profits. Groups. Schools. Government. They all have a role to play, and so the more we can figure out ways to work with them, the better. But a lot of those groups, as much as they talk about wanting to be innovative, and wanting to be impact investors, and wanting to put their money to work in the non-profit space, and how they’re not afraid of failure … they say it, and they mean it, it’s just taking them a long time to actually take action. But we’ll get there, I think we’re scrappy enough to keep it going, and we’ll take them along with us.
KG: It seems like most of the organizations you’re involved with now are in this area – either in Chicago or the surrounding region. Do you hope to see a stronger national or even international presence?
JK: Definitely. This year is all about proving out the model. Getting that to work. Dan and I are both marketplace guys, and so our assumption is always that you want to prove that you can get all the players to the table in one place, and get them all working together really well, and then you can expand that city by city across the nation, and from there, nation to nation.