Wednesday, July 9, 2014

Tech Talk: Daniel Mansoor's GiveNext is at the Forefront of the Philanthropic Revolution

Posted By on Wed, Jul 9, 2014 at 2:17 PM

Tech Talk is a weekly series that explores the people behind startup companies in the Cleveland area.

From a contributor perspective, philanthropic giving could be a whole lot easier. Depending on the cause, donation can quickly become a complicated enterprise, requiring research and by extension time. Because the success of solicitation for many organizations relies so heavily on the convenience of donation, even the slightest obstacles can become significant deterrents.

Daniel Mansoor, a veteran of the nonprofit sphere, sought to alleviate a few of the most egregious problems with donating by targeting simplicity. Mansoor’s company, GiveNext, provides tools for users to build a philanthropic portfolio of sorts - donors can search through a database of hundreds of thousands of organizations, and provided they’ve submitted a form of payment, gift any amount. GiveNext will then automatically generate a tax return form for deduction purposes. In my experience, the entire process took less than two minutes.

GiveNext exists purely in web form at the moment, but Mansoor envisions it growing into a platform — he describes its current form as a “beta,” and says new features are in active development. Even so, Mansoor considers GiveNext as is a quantum leap forward for nonprofits, and couches it as a successor to such philanthropic innovations such as the United Way and the first community foundation (both of which, Mansoor is fond of pointing out, were the product of Cleveland ingenuity.)

The company is still in its infancy — Mansoor founded GiveNext in 2012 — but is already receiving accolades. Last October, GiveNext won top prize of $20,000 in the COSE Business Pitch Competition, beating out 49 other startups. In December 2013, Mansoor was invited to pitch against regional companies competing in New York Centre for Social Innovation’s 1776 Challenge Cup. And just this year, Mansoor was one of 32 Midwest startups chosen to present at the Michigan Growth Capital Symposium in Ann Arbor.

Despite GiveNext’s early successes, Mansoor runs the company leanly. On the lookout for sustainable sources of capital, he’s cautiously optimistic about the company’s future. We chatted about his years in the nonprofit sector, the difficulty of funding a startup, and problems finding “the right talent.”

Tell me about yourself. Do you have a lot of experience with nonprofits?

I grew up in Madison, Wisconson and went to Cornell University, where I majored in engineering and earned an MBA. I spent four years with Proctor & Gamble, and did some volunteer work for Cornell. I got a call one day asking if I wanted to work in Alumni Relations, fundraising for the university. So four years out of college, I ended up going back there.

I spent about 10 years working for universities, including senior vice president at Brandeis University, and then started consulting for nonprofits, trying to help them with their fundraising strategy.

It was around that time that I realized that there was something very inefficient about the fundraising process. When I was working at Cornell in alumni relations we were writing great letters, but we weren’t seeing the number of donors going up, and people who had given in the past weren’t giving every year - it just didn’t make a lot of sense.

Over the years, I just realized that there’s still something missing in the way that we give and get. As I started doing more and more research, I came to understand two things. One is that donors don’t know the last time they made a gift to a charity - they can’t find that quickly. The second is that giving is actually very hard. If you had asked me to support an organization I care about and say, “Yes,” what is the next step? Do you hand me a form, do you tell me to go to a website, or do I hand you a credit card? When we want to buy something on Amazon, we just go to our phone, type in the name of the desired product, hit return, and we go back to finishing our coffee. My question was, why couldn’t donating be that easy?

So you formed GiveNext, at that point?
Yes. Two years ago I formed the company and really began working aggressively at understanding the market. At that point, about a year ago, I was part of the LaunchHouse accelerator, where I met some milestones in terms of creating [a working product] and securing some early funding, and in April we launched.

I worked with an individual who was a CTO for a payment processing company as a contract employee. He offered to help build the MVP, or minimal viable product, which is a terminology used to validate your concept without spending a lot of money. What you see on the site right now is our MVP. “Beta” is also a good word for it.

GiveNext is essentially a brokerage account for giving — I call it the E*Trade of giving. You manage all of your charities in one spot, once you’ve entered your payment information you never have to do it again, and it takes about five seconds to give to an organization you care about.

GiveNext is obviously barebones at the moment because it’s a work in progress, but are there any major features you plan to implement soon?

The very next set of features includes recurring giving, anonymous giving, a donor dashboard, and a nonprofit dashboard. We need the nonprofits to be able to capture their profile and add to it and enhance it, as well as change it. Since we’re relying on IRS data for the 1.4 million charities in the database, sometimes there are mistakes — the address is the finance office and not the fundraising office, for example. That takes priority.

We also have a list of 63 additional features we’d love to add. You should be able to talk to your phone and say, “GiveNext $25 dollars to Case Western Reserve,” and the transaction’s done. We have a list of about 9 features for nonprofits that gives them a reason to participate, including instantaneous acknowledgment - when you make a gift and hit return, a video the executive officer took two days ago could pop up and say, “Thank you for your gift through GiveNext, I’d like you to see the roses that bloomed at the botanical gardens yesterday.” We’re really looking at ways to take advantage of the internet to not simply be a means to a transaction but an opportunity for cultivating a sense of community, too.

What has prevented you from adding those features?

Talent right now in Northeast Ohio is there, I think, but in some ways it’s at capacity — the best talent is taken. There are lots of people that code, but you don’t want just that - you want the right person who understand the concept of your startup and is dedicated to the cause.

This is a very robust entrepreneurial community in terms of mentorship, concepts, advisors, ideas, connections, but I’m not sure we’re where we should be in technology and talent, or capacity.

In terms of funding, it’s available, but I don’t think it’s at the level of risk that entrepreneurs are taking. Investors in Cleveland are more conservative.

If either coast offered the funding you needed, would you consider leaving Cleveland?

I love Cleveland and I’d love to stay here, but the reality is that the same way Cleveland offers money to people who come here and stay here, if somebody offered me the funding that I needed on the condition moving the company, it’s something I’d have to contemplate. The most important thing to me right now is the company.

So money comes with strings attached.

As it should, which is why we went to friends and family first. We are going to attempt some crowdfunding, because there has what I might call a visceral reaction from individuals who want to see a change in how we give and get. For example, I was approved for Kiva loan - I posted my company on a Thursday and three weeks later, I had $5,000 from 116 people in 14 countries with 38 of them writing comments, including two guys from Australia that wrote, “Please, please, bring this here as soon as you can.” I’ve got a fairly humorous IndieGogo site that I’m putting together. I can’t offer a lot in return, so I’m having some fun with the perks, but I’m going to send that out and see if there’s any traction.

With the understanding that GiveNext is still in beta, how do you think it measures up to the competition? Another startup in the nonprofit sphere, Big River, is based in Cleveland.

Big River is, I think, an insightful product that is marketed to individual charities. I believe it is a significant advancement in online gift processing and online gift processing for charities. My model is flipped — I’m creating a donor profile. [Ron Cass, CEO of Big River] and I know each other well, and we basically agreed to approach the problem from two different angles.

I think our strength is in the viral nature of the business. In other words, when nonprofits encourage their donors to use GiveNext, the donors then add additional charities to their portfolio. When they’re making gifts to these few charities, that’s essentially a marketing opportunity to engage the next round of nonprofits.

Mr. Mansoor, I thought this question might be a good endcap: If you were a young entrepreneur with just an idea, how would you go about forming a business or making that idea a reality? It’s difficult, no?

It’s not, really. There’s no barrier to entry, but there are a lot of barriers to success. There three things I’d recommend doing. One is if you’re thinking about the app market, read everything you can about the lean startup, and then actually do what the lean startup model tells you to do. It’s counterintuitive, but if I’d adhered to that model a lot more carefully, I’d have moved faster and spent a lot less money.

Second thing is, get out of the building and talk to your customers and potential users, and, more importantly, listen to them. I learned that lesson the hard way - I had an idea from the start, but it wasn’t until I started listening carefully and not walking into meetings trying to sell my idea that I really figured out what the market wanted.

The last is take full advantage of the incredible intelligence and networking capital of the community. People here are incredibly generous with their time and their ideas, and their introductions.

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