Bright Funds puts a new twist on Financial investing and donating to charity. Bright Funds portfolios are separated into different categories dealing with social issues. They manage funds comprised of carefully selected nonprofit organizations doing exceptional work in addressing the social challenges of our time.
These social challenges include environmental protection, access to clean water, basic education, poverty alleviation, accessible health care, and response to global disasters. Each fund is designed through careful analysis and in-depth research. I got a chance to chat with Julia Streuli, Head of Strategic Partnerships at BrightFunds, to talk about the company, its growth, and its vision for the future.
Grant: What is the inspiration behind Bright Funds?
Julia: Bright Funds was started about two years ago by Ty Walrod and Rutul Davè. The two of them wanted a way to give to charities that was easy, effective, and enjoyable. So they took this idea of an online service, one that is simple and fun to use, like a better way of investing and applied it to the charitable giving world.
The idea was to create an experience for giving to charity that’s smart and also rewarding: rethink the ways people are giving to charity and make it simple to determine whether that charity is doing good work. For example, if someone is really passionate about education or the environment, determining which organizations are doing the best work is no easy task—it takes a lot of research and time and background knowledge. So that’s where the idea came from for the fund approach—doing background research on big cause areas, then identifying the best organizations and making it easy for donors to support the causes they are passionate about.
With Bright Funds, everyone can create their own personal giving strategy. The causes they are passionate about are represented by our mutual funds. Each fund is a collection of between five and fifteen organizations that have gone through a really rigorous vetting process.
Grant: I did read about that. You should put that on the front cover of the page! I was reading how you go through the process and the independent organizations that go through and grade them. That’s pretty interesting.
Julia: That’s so true. We’re noticing that the younger generation, the Millennials, are increasingly cause-focused. They’re not like older generations who have a strong relationship with an individual organization; Millennials care more about causes like health or poverty alleviation.
That’s not to say that someone in his or her mid-20s doesn’t have a strong relationship with the organization she or he volunteers for, but in general—and we’ve looked at a lot of research on giving trends—Millennials are cause focused and they’re more concerned with impact. They are more concerned about being the most effective with the donation. So Bright Funds is essentially designed with those two trends in mind. And also with the idea of really creating a delightful experience.
All too often, giving is about a transaction—handing over money or putting in your credit card information, then being solicited to donate more. It isn’t so much about the great feeling that you have when you are supporting something you care about, or seeing the results of the donation.
Grant: It almost becomes like paying a bill when you do it the traditional way. You get an email asking for your monthly donation. It becomes automatic and non-inspirational.
Julia: That’s why we decided to develop an experience that was focused on everything positive. Instead of feeling like an obligation or a transaction, we wanted it to be an empowering experience. It’s your hard-earned money and it’s exactly how you want to see change in the world, so it becomes how you would build a better world.
Grant: When someone goes to sign up at the site, do you give money on a monthly basis, or can you give any amount any time?
Julia: You can give every month, or you can give any amount any time as well. So it’s flexible and all of your transactions are recorded in your history. A lot of people at the end of the year like to get the tax write-off. So they can easily see exactly what they’ve donated.
For a lot of people, too, they don’t want to worry about the actual act of giving, they just want to see the transaction with PayPal or what have you. Which is why we created the monthly giving. So the only time you’d engage with your Bright Funds account is to receive updates on the work of all the charities you’re interested in.
Grant: And is that just done through email?
Julia: No, we’ve created an Impact Timeline that is sort of like a Facebook newsfeed. So all our charity partners we work with update donors on new projects and successes they’ve had. So if Charity: Water builds a well in Rwanda, they’d report to their donors and to Bright Funds donors and they would include a blog post, a picture, maybe even a video. So as a donor you can really see where your contribution is going and how exactly it’s building your better world!
Grant: So there are multiple organizations in various fund classes? So for water sanitation, would there be Charity: Water and something like water.org? Do you choose one specific organization to define that fund area or are there a bunch of water organizations you could choose from?
Julia: That’s a good question. The two you mentioned are in our water fund. They are both outstanding organizations. But also in our Water Fund is WASH Advocates—they work with government and policy makers to compliment the work of an organization like Charity: Water, which is going into countries and building the wells.
WASH Advocate is working with local and national governments to make sure that those wells are well maintained. And the policies in place are amenable to building the wells in the first place and then making sure that communities have access to that water. So with each fund we really try to create a sustainable approach.
Grant: Can tell if an organization is mainly international or domestic? Is there something that separates that?
Julia: You can tell where the organization is working and on which issues it’s focusing specifically. Within each fund we have what we call facets, which are subcategories or issues. Within water we have sanitation, hygiene, and infrastructure and governmental policy. The organizations we select will cover all those sub-categories and when you look at the profile for each individual charity, you can see which facets that organization is covering.
Grant: So you can personalize how you allocate the money? Or do you allocate the money once it’s in the fund—the Water fund, the Poverty Fund, the Education Fund, or does that person actually allocate the money to specific organizations within that fund.
Julia: The default is that the contribution goes equally among all the nonprofits in that fund. So if I gave $20 to Water Fund and there were five organizations, then each would receive the same amount. Regarding someone’s giving strategy, they might say: I want to give 50% to the Water Fund, give 25% to the Poverty Fund and 25% to Human Rights.
Grant: How many funds are there?
Julia: There are six funds and we are about to introduce a disaster relief strategy. But, to answer your initial question, if I only wanted to support Charity: Water in the Water Fund, I could edit my fund to look exactly how I wanted. If I only wanted to support the water organizations in that fund that were working on sanitation, I could really drill down so that fund reflected where I wanted to make a difference in water issues.
Grant: How is the progress itself judged? With regular investing, you’d get an annual statement or review—is there something like that? Or is it that you look at your Timeline—is that how progress is gauged, by seeing what the charities have done—or is there an annual report or something that’s generated?
Julia: Because the return is social good, measuring impact is not so straightforward. That’s why we focus on update sharing and storytelling. And donors can opt to receive weekly or monthly updates on the work of the charities and their giving strategies. So once a month I could receive an update email that would contain projects from the charities I’m supporting through my fund.
Grant: Interesting. Do the organizations ever get re-evaluated? Do you add organizations annually or any time you come upon an organization that you like, or do you look at the report card the independent company does and they might have a new organization that you reach out to.
Julia: We are constantly updating our funds. We have a lot of interest from nonprofits to join our funds, but we have to maintain our selection standards. And even that is something we are constantly reevaluating because it’s not so black and white what constitutes a good vs. bad charity and how you determine that.
We try to use as many different types of evaluation metrics as possible such as Charity Navigator, which looks at financial metrics through the 990, and Philanthropedia, which rates charities based on crowd sourced expertise from leaders in the field. We’re trying to create a balanced definition of what our recommendations consist of.
Grant: Is that how you are going to measure growth in the future? For you as a company, you’re a for-profit company, but you’re dealing with nonprofits, so it’s an interesting combination of both. So what do you see as growth for the company? Is it adding more organizations and more funds?
Julia: That’s definitely one part of growth, but we see growth too in terms of the number of people using Bright Funds. Our long-term vision is to help as many people connect with the best organizations and make the most impact through their charitable giving. One way we’ve seen to make Bright Funds available to as many people as possible is through the workplace. We’ve launched our Workplace Giving program, which lets people fund their Bright Funds portfolio through their payroll department. So we are now partnering with companies as a benefit. It’s almost like a 401(k) for giving. You can kick in a certain percentage of your paycheck every pay period for your social good investment.
Grant: Would that be individualized—you develop a relationship with the company and they would say each employee has agreed to give 1% of their paycheck? Would you have to have every employee be involved?
Julia: No, it’s just a benefit, like a 401(k)—it’s individual. You don’t have to participate if you don’t want to. It’s a resource. A lot of companies have matching budgets available, so dollar for dollar or two dollars for every dollar donated to the charity of the employee’s choice, the company will kick in a certain amount.
Grant: How would a company go about doing that? Would you set up a phone call like this and explain in detail how that would be set up?
Julia: We usually partner with the Human Resources or Corporate Social Responsibility Departments in charge of benefits and employee programs, or there’s a foundation or corporate communications person at the company—it’s a partnership. We work with the company to communicate the benefit to the employee and officially launch Bright Funds as a benefit and integrate with payroll.
Grant: Bright Funds is a really young company, what are some of the challenges you’ve seen before launch and after launch, and how do they differ?
Julia: They’re really different! Before launch, we focused more on the Bright Funds experience, specifically the funds, some of the topics we discussed earlier: the idea of impact, which cause areas to focus on, how to update people who donate through Bright Funds—it was more focused on the BrightFunds.org experience itself. Now that we’ve launched, the big challenge is to make Bright Funds available to as many people as possible. Now we’re focused on partnering with companies because we see that as the best way to do that.
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