Startup Secrets: Raising Funding

Case Study – Givology

This is a guest post from Alok Tayi, PhD. He is a postdoctoral fellow, in the Whitesides Lab at Harvard University. Alok has been working to provide sample case studies on for the Startup Secrets series.  Special thanks to Coulter King and Joyce Meng of Givology for their contributions to this case study.

Givology is a student-run social enterprise that helps individuals find and fund education-related projects around the globe.  Givology was launched in 2008 and founded by three University of Pennsylvania undergraduates: Joyce Meng, Jennifer Chen and Carl Mackey.

Unlike other non-profit organizations that focus on one project or geography, Givology publicizes and sponsors “grassroots education projects and student scholarships around the world”.  Pursuing such an admirable goal promises to have a big impact; nearly one out of five kids of primary-school age in the world are not in school.  The cost of education (fees and supplies) coupled with poverty perpetuate this problem.

Givology serves as a fundraising platform and is able to make an impact through financing of local partners.  Givology finds partners with a good track record but are financially constrained; with the help of Givology’s fundraising, volunteers, and publicity, local partners are able to make a large impact in local communities.  Thus far, they have provided over $315,000 in funding to sponsor 2,875 students and 46 partners.  Additionally, Givology-funded projects operate in 26 different countries.

Interestingly, this social enterprise operates in a bootstrapped fashion, much like their for-profit counterparts.  With a virtual office and a 100 percent volunteer work force, Givology operates on a budget of only $400 per year – funds required to host their website.  Additionally, they recently launched a book called A Guide to Giving.  Within this text, they provide advice and best practices for other young social enterprises.

The Givology team has identified ten best practices for founders of a social enterprise – of them, several are directly relevant to fundraising and use of limited capital.  For new social enterprises, early donors/investors are a critical source of funding.  Since the process of attracting new donors is difficult, Givology found that developing strategies to maintain the enthusiasm of existing donors is key (#7).

With those limited resources, non-profits are urged to launch their product or service quickly and cheaply (#1) – an homage to The Lean Startup methodology.  The Givology team has found that it is best to match expenses with inflows (#9) by “thinking critically about return on expenses”.

Givology represents a new approach to raising funds for social enterprises that uses techniques new and old: one part crowdfunding, one part microfinance, one part conventional philanthropy.  This focused and bootstrapped approach allows them to reinvest nearly all their resources in making a meaningful impact globally.

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