Why I Founded a Startup at Yale to Improve Charitable Giving

I believe charitable giving can be better. I believe it should be better.

 

My name is Stephen Kump. I’m currently an MBA student at Yale and an officer in the Georgia Army National Guard, and I recently founded Charityvest, a nonprofit tech venture on a mission to improve charitable giving. We were recently awarded a fellowship from Yale to make Charityvest a reality. I’d like to tell you why I believe we need it.

 

Since we’ve been married, my wife and I have pledged to give away a percentage of our income. It’s our conviction to do our best to bless others as we have been blessed. It’s been a wonderful thing in our lives, but sometimes our giving can feel like a chore to complete rather than a joyful opportunity to accelerate good in the world. Giving can be difficult to navigate. Here are some of the pain points in giving:

 

1. Convenience of giving methods. There are nearly as many methods of giving as there are organizations to give to. Different websites (many of them clunky), offering plates, and mailers can be time consuming to manage. Recurring gifts can help automate gifting, but only until changes need to be made; reducing or stopping recurring gifts can require loads of awkward emails and phone calls.

2. Transaction costs. The easiest ways to give are usually online, but most of them require hefty payment processing and servicing fees. Most are 2-4% of your donation—some as high as 15%.

3. Keeping track of gifts. When people ask for $50 for this fun-run or $20 for that mission trip, keeping track of tax receipts until tax-time the next year, whether receipts are paper or electronic, is nearly impossible.

4. Spam. Too often—particularly after one-time gifts—charities dump tons of spam on you. There’s a business case for why they do it, but it’s not a fun experience to get a pile of “please donate” brochures in the mail from a charity you recently supported financially.

5. Managing a budget for giving. If you have a budget for giving, it’s hard to know how far along you are on your monthly/quarterly/annual targets at a given point in time. My wife and I opened a second checking account to separate our giving from spending to help with this, but it’s an extra hassle.

6. Alignment with passion. We all have issues in the world we’re most passionate about. But how aligned is our giving with those issues? With all the little giving opportunities that solicit us, many people end up giving very little to the things they actually think are the most critical.

7. Impact. Above all, more often than not we’re left guessing whether or not our money is actually producing any impact in the world. A book could be written on this issue alone. There are many explanations for this, but I think we can all agree that it would be better if we knew more about the impact that we are having (or not having in some cases). In my research, I’ve discovered that “donor anxiety” is a real thing. People give less, don’t give at all, or give to something very basic because they are unsure whether or not their potential gift would actually help a problem they care about. Something needs to change.

 

If anything in the world should be a pleasant, fun, rewarding, or meaningful experience, it should be giving to charity.

 

Unfortunately, nonprofits don’t have it any better. Before coming to Yale, I worked (in my civilian job) at Calvin Edwards & Company (CEC), a boutique consulting firm helping donors and charitable entities maximize their impact. It was a great experience; it did, however, show me the level of inefficiency in the charitable giving sector. I saw firsthand how expensive it is for nonprofits to process charitable gifts. In most cases, they pay sizable transaction fees online, pass those fees onto the donor, or devote precious staff labor hours to processing paper checks. This inefficiency diminishes resources that could otherwise be used to create more impact.

 

If anything in the world should be totally free for everyone, it should be giving to charity.

 

After working with major donors at CEC, I noticed they don’t wrestle with these issues as much. They’re likely to have foundation staffs, donor-advised funds, or consulting firms like CEC to help them make giving easier. These services are great, but most of us don’t have the resources to outsource our giving management. The vast majority of charitable dollars in the United States are given by people who are not mega-millionaires.

 

Where is the help for “normal” givers?

 

Driving home from work one day, I realized there was a way to create a product that can serve the needs of anyone who gives regularly. By combining web-based technology and some tax-deductible structures recognized by the IRS, we can create a “Charity Fund” for every donor in the United States in order to (1) make giving a fantastic experience, (2) increase the impact of giving over time, and (3) lower costs for nonprofits.

 

Charityvest is an online platform to improve the experience, economics, and efficiency of charitable giving for everyone.

 

In the next few days we’ll post a sequel detailing how we are going to achieve this, but for now, check out our homepage for a brief overview of how Charityvest works.

 

For me, starting Charityvest is an obligation to my own conscience. I believe the world will be better for it. As we scale, I’m convinced we can increase donation amounts, encourage more intentional giving, and lower costs for nonprofits. We could move the whole charitable sector forward. I want to help every donor in America make their social impact a real, tangible, significant part of their story.

 

I hope you’ll join us on this journey. Let’s take charitable giving to the next level! If you want to make your giving a better experience and increase efficiency for nonprofits, sign up for early access to Charityvest here.

 

Yours in directing more resources for good,

 

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Stephen Kump, Founder & CEO

 


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