Recently launched Bright Funds offers a new kind of charitable giving platform modeled after mutual funds
A Q&A with Bright Funds co-founder and CEO Ty Walrod. The San Francisco–based company was founded in early-2012 and had its official launch in late November.
SUB: Please describe Bright Funds and your value proposition.
Walrod: Bright Funds is a better way to give to charity, helping people direct their giving to the causes they care about. With Bright Funds, individuals and employees create personalized giving portfolios and contribute to thoroughly researched funds of highly effective nonprofits, all working to address the greatest challenges of our time. In one platform, Bright Funds brings together the power of research, the reliability of a trusted financial service, and the convenience of centralized contributions and one-click tax reporting at the end of the year.
SUB: Who are your target markets and users?
Walrod: Bright Funds offers a compelling service for both individual donors and companies. For individual donors, we set out to target millennials—a group that’s been frustrated by the lack of an enjoyable giving experience and the lack of innovation in the charitable giving space—but we found out that our target market is really anyone of any age who wants their charitable donations to have the greatest possible impact. We have members of all ages giving amounts that range from $10 to thousands of dollars per contribution.
For companies, our goal is to attract the most innovative enterprises to use Bright Funds as their employee gift-matching program. Bright Funds offers companies a compelling way to retain their greatest resource—talented employees—and because we’re cloud-based and secure, deploying Bright Funds at an enterprise is relatively simple.
SUB: Who do you consider to be your competition?
Walrod: For individual donors, our main competition is when donors don’t give because they don’t have time to research the best organizations working on the issues they care most about, or when they do give but to organizations that aren’t the most effective and efficient.
For enterprises, there are several companies that offer employee gift-matching programs for companies. Two examples include United Way and JK-Group, more commonly known by one of its products, EasyMatch.
SUB: What differentiates Bright Funds from the competition?
Walrod: What differentiates us from our competition ties directly back to our core value proposition: Bright Funds is a better way to give. We use research and a robust vetting process to select the best nonprofits addressing the most critical issues of our time. We combine that with a delightful user experience, and we make it possible to give to an entire portfolio in a single transaction. The end result is a high-impact investment in a better world.
SUB: When was the company founded and what have the first steps been you’ve taken in establishing it?
Walrod: Bright Funds was founded in February of 2012, when my co-founder, Rutul Dave, and I set out to improve the experience of giving. We launched our early access prototype in March, then in April, partnered with a great firm called Hattery that both invests in companies and works with them to design a great product. The current look and feel of Bright Funds was designed in conjunction with the talented team at Hattery.
SUB: What was the inspiration behind the idea for Bright Funds? Was there an ‘aha’ moment, or was the idea more gradual in developing?
Walrod: Both. Rutul and I each had our own individual ‘aha’ moments that led to our deciding to start a company together. At the core of the idea was a personal need. We both wanted online giving to be a low effort, high joy experience. But we never found a service that provided the quality of experience we have come to expect of online services. So we decided to build it ourselves. We’ve developed the Bright Funds value proposition throughout 2012, but our idea has remained the same: offer donors a better way to give.
SUB: How did you come up with the name? What is the story behind it?
Walrod: We grabbed a table at Whole Foods on 4th and Folsom in San Francisco and wouldn’t let ourselves leave until we had agreed upon the perfect name for our company. We went through a few ideas but when we arrived at Bright Funds, we knew we nailed it. Bright Funds embodies the spirit of our company. Bright describes our approach: we see a world of opportunity; Funds describes what we do: we help people invest their money in the causes they care about.
SUB: What have the most significant obstacles been so far to building the company?
Walrod: One of the biggest challenges was knowing where to start: there are nearly 1 million charities in the United States. Once we developed our strategy, the next challenge was to on-board the less than 100 nonprofits that met our criteria. Nearly every nonprofit has accepted our invitation to be a part of Bright Funds. However, because some of our portfolio nonprofits are large or more complex organizations, it took a little time to get contracts signed with each of them. That said, we’re thrilled to have such an amazing group of organizations in our funds.
SUB: You just launched to the public. Why was this a particularly good time to launch?
Walrod: We launched publicly on November 27, 2012, in conjunction with #GivingTuesday—the national day of giving. We did this for two reasons: we loved the idea of launching as an official partner with #GivingTuesday because of the broad appeal and awareness brought to the day; second, most giving happens at the end of the year. We wanted get our product into the market in time to reach as many people as possible during the time they’re more likely to give.
SUB: Have you raised outside funding to this point?
Walrod: We have raised seed investment from Angel investors and venture capitalists.
SUB: How does the company generate revenue or plan to generate revenue?
Walrod: Bright Funds generates revenue by raising money for non-profits through our platform. Our service is free to donors, and contributions are 100 percent tax-deductible to the fullest extent allowed by law. The nonprofits pay us a nominal fee of 7.5 percent, which covers our transaction and technology costs. It’s great for the donors because we provide them a valuable service, and it’s great for nonprofits because it’s difficult for most nonprofits to raise money for less than 15 percent, making us a very efficient source of revenue.
SUB: What are your goals for Bright Funds over the next year or so?
Walrod: Over the next year, our goal is to maximize awareness about what Bright Funds in the charitable giving marketplace. We also have aggressive goals of adding more funds, more customization, and some compelling offerings for companies that want to deploy the most innovative employee matching solution on the market.
Bright Funds – www.brightfunds.org