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Welcome to the heart of giving podcast powered by BBB. gift.org gift.org is the nation's standards based charity evaluator, and it's your one stop source for information on giving. And reports on the most asked about charities. I'm Art Taylor. And there are all sorts of ways that you can contribute to society in the nonprofit sector, and improving community and even the world. We mostly think about services that are directly related to someone in need. But there are many indirect ways that we can be helpful to that are equally powerful, and important. We do sort of an indirect service at the wise giving alliance by providing tips and tools that help people make good giving decisions wise giving decisions. But there are others who are connected to what I call the nonprofit infrastructure and provide unique ways for organizations to fundraise and for people to donate, and to get information for that matter about donating. Today we're going to talk with a gentleman who's created an organization called be generous. And be generous is the first ever philanthropic credit product designed for donating now, and paying later, just like most Americans do with many of our purchases. Dominic's company allows nonprofits to receive the full donation up front, while donors pay interest free installments of their donation. This means more donations to your nonprofit, larger average donations, and no risk of donor cancellations or pledge defaults. So to talk with me about this is dominant Callum's who created this organization, and we're going to have a fun conversation about what he's done here and where he sees it going. Dominic, welcome to the heart of giving podcast.
Thank you so much. It's a pleasure to be on. Well, Dominic,
I'd like to talk to you about your life a little bit, if you don't mind, because I like to do that to give our listeners some idea of your path to helping society sort of understand how that led you to this particular way of supporting donors and organizations.
Yeah, absolutely. So I've had a bit of an interesting life. I was born in Asia, actually in Hong Kong, live there for a few years and then moved to London, England, where I grew up as a as a young man. And it's quite an interesting story. Actually, my grandfather grew up in a small town called Edgware in London. And when he was 16 years old, he left high school in order to sell cameras and started a small little store called Dixon's small little retail electronics store called Dixon's at 16 years old, and grew that into the largest consumer electronics company in the world today in Europe, I should say, largest consumer electronics company, Europe. And so today the company has I think, 45,000 employees, there's around 2500 stores. It's a publicly traded company. So it's just an extraordinary story of what a 16 year old high school dropout could accomplish as a as a young entrepreneur, and he was knighted by the Queen of England, which was fascinating and ultimately inducted into the House of Lords in the UK. And he's still alive. And I was just with him about six months ago in London. And you know, ultimately, he inspired me to want to be an entrepreneur. So I always sort of knew I wanted to be an entrepreneur in some sense of the word, but I didn't quite know exactly the problem that I wanted to solve. And so I ended up coming to the United States. I lived in LA for a while and then went to university and graduate school in New York City. And I went to Columbia University, I did a master's degree in international affairs. When I graduated from school, my basically everybody knew when to go work for Wall Street. So I kind of assumed like, alright, this is what you're supposed to do. I guess that's what I'll do. So I went to work for Wall Street as well and one of the large banks and it was very miserable. You If I did not enjoy it at all, and it dawned on me very quickly, like, I don't think I'm supposed to be doing this because everybody else was so passionate and, and love the work that they were doing. And I didn't even understand what I was doing. And so you know what I was making all this money, and it was exciting and this and that. And I ended up quitting, really the best job I've ever had, as a recent graduate of University to write articles for $300, an article at a think tank in Washington, DC. So I went from making a fantastic living, to be basically just being broke at $300 An article and having to write these articles and live by every paycheck I'd received. And I was dating someone at the time, and she broke up with me, and it was just like a mess. So but I was so happy at this think tank, I enjoyed it so much. And I was writing about international affairs and the problems that were going on in the world. And I got asked to interview on BBC World News, which was incredible. And so through a strange series of events, I realized that I was really passionate about understanding the problems in the world and trying to come up with solutions to those problems. And I was, like I said, broke, but I was thrilled, I was really happy. And so eventually, I decided, well, I'm going to take this passion, and I'm going to go into government. And so I actually became I actually started working in the Senate Finance Committee for the chairman's office. So it was a dream job. I was on Capitol Hill, again, getting very paid very, very little. But I was happy. I was thrilled, you know what I was doing the people's work, so to speak. And after a while there, I realized sort of came to the same conclusion, unfortunately, that I'm not doing the people's work. Politics at that level is, it's all about sort of deal making and its politics is about politics, as they say. So I realized that I wanted to do something at the intersection of profit and purpose. I'd worked in the government, I've worked in the private sector, I knew that I liked the private sector more. But I was kind of obsessed with this idea that there are so many problems in the world. And we have to use the tools of the private sector to try to fix some of those problems. And so I moved back out to Los Angeles, where I've gone to high school. And I linked up with a guy named Trevor Nielsen, who had started a company called Global Philanthropy group, which was one of the first private philanthropic consulting firms in the United States. And it was this unbelievable company. And we had all these incredible clients that range from very famous celebrities to Big Five fortune 500, corporations, to ultra high net worth individuals. And our job was to run, operate, manage and grow their philanthropic foundations, which was it was a dream, I was getting paid a private sector wage, and I was literally building foundations that worked on everything from veterans rights to adoption, rights to gay rights to water conservation, climate change, I mean, animal rights mean, you name it, we did it. And I did that for several years. And then that company actually went on to get acquired. And I realized, wow, you know, I can make a great living doing good in the world. And that is, to me, there's nothing better than that. And so at that point, I started my first company on my own called giving, it was a private it is its company is still around today. It's a private venture capital back company. And the premise behind giving was very simple. We effectively created the Shopify, for nonprofits. So Shopify created a digital one touch solution for instantly launching your eCommerce store. There are 2.2 million ecommerce stores in the United States. And they've been obviously incredibly successful. What most people don't realize is that there are 1.7 million nonprofits in the United States. And the cost labor and time, as I'm sure you know, of starting a nonprofit, it's very labor intensive, it's very costly and takes a long time. So what we did is we created an infrastructure using a fiscal sponsor model. And we married that to a front end technology platform to essentially create an instant nonprofit in a box. And so now you can start your nonprofit project in 30 seconds on gvg.org, which is the company. So I ran that as CEO for several years, I'm now the president of that company, and on the board of directors, and basically, the company has done great, but the reason I stepped out of the day to day CEO position to take my position as the president is to start this new company called be generous. And I'll get into that in a moment. But that's really what's led to this incredible new company that I'm building.
That's fascinating. I have to tell you, I don't know you, this is the first time that we've ever had a chance to talk. But there are a number of points of commonality in in what you've just said, first of all, my daughter went to Columbia, SEPA I guess is where you graduate with it. And, and she also works for one of the large banks. There you go. So but I have to say she's, she's doing some of the philanthropic work for the bank, although that's great. She'll tell you that her colleagues are wonderful people. Also, you indicated that you were one of these people who had this passion to try to figure out how to solve problems. And that is sort of what drove me also to be part of the nonprofit sector. Just Having this passion to figure out how things work, you know, I did a little bit of time in the for profit sector as well. And once you get bitten by nonprofit work it can be, it can be quite fulfilling. So kudos to you for being willing to operate for $300 a week, although I don't think anybody should have to work for that wage, whether you're doing good or not agree. But I'm glad to see that you found your way to, to earning a decent living in the private sector helping nonprofits. That's something else I wanted to just get into, you know, for a long time, the nonprofit sector was sort of the sole province for generating social good, you know, we used to think about nonprofits is the right place to demonstrate our generosity. But clearly, that's only one of many ways that we can contribute to society and businesses can do significant work as well. In fact, some weeks ago, Dominic, I had a gentleman on, who done some research and discovered that if all of the people who pledged to give away half of their wealth during their lifetime, were to do that, and scale the available nonprofits to absorb that money, we would still have over $600 billion leftover. And so if you were going to actually put that money to use creating social good, you'd have to give to scaled businesses that take care of certain problems, because they already had the scale in place like waterworks, maybe there are lots of local waterworks that don't have the infrastructure or the tax base to support what they need to create clean water. Well, what if you combined that waterworks with another waterworks and funded it so that other waterworks could actually do the work necessary? Or housing low income housing is another area where significant investment could make a big difference in quality of people's lives? So there are some other ways that companies can contribute new found this particular way that I want to talk about now. So tell us about your latest venture?
Sure, absolutely. Well, first of all, I just want to say I wrote an op ed for Forbes a couple of years ago. And I just want to comment what you said, the premise of the Op Ed was basically that a lot of the problems that we have in the world today are actually very fixable, and it doesn't cost that much money. So we all think these problems are incredibly difficult to fix, and they are complex. But if you look at the estimates from either the World Bank, or from the Department of Housing and Urban services, or whatever it might be the actual estimates to solve things like hunger, and homelessness, it's not that much money, it's way less than one would think, right? I mean, we're talking less than the market capitalization of most of Silicon Valley companies, right? We're talking double digit billions, but no way less than we spend on a variety of other silly things. And so I just want to sort of reiterate that I agree with you. And I wrote a whole op ed about this calling out corporations. It was written in Forbes, basically, because corporate giving, as I'm sure you know, is very, very small compared to total overall giving. So total overall, giving the numbers just came out to a couple days ago for 2021 $484 billion were donated to nonprofits in the United States in 2021. Bout 72% of that came from folks like you and I individuals, only around 6% came from corporations. And so corporations talk a lot about how good they are. But they really need to step up and actually put their money literally where their mouth is on this issue. So if corporations actually gave what they could give, particularly where corporate profits are, we could solve a substantial number of problems out there. And I don't mean fix, I don't mean sort of make them better. I mean, so that we can end homelessness, we can end hunger, I mean, end it. So I just agree with that. And what actually that it's a little bit of a nice lead into what we're doing here. So the problem today in the United States is not that there's not enough money being donated to nonprofits. It's an actual issue of liquidity. It's that the money's not necessarily being donated at the right time when nonprofits needed most. So any nonprofit listeners will know that about 40% of nonprofit donations come in the last quarter of the year, October, November, December. That's when giving Tuesday's that's when obviously tax people are thinking about their tax deductions and so forth. And so for the first sort of three quarters of the year, nonprofits are having a lot of liquidity issues, despite the fact that, you know, they still need to spend money to fix the issues in their programs and so forth. But money is not coming in at the rate that it necessarily should. And so interestingly, CNN put out a report not too long ago that said about half of all nonprofits today in the United States have less than one month of cash reserves on hand, which is extraordinary, because you're talking about a market of 1.7 million organizations that hold about $3.8 trillion motors with an assets and 1/10 of the American workforce. It's a huge part of our economy. And so GuideStar now Candide, they put out a sort of a subsequent report said that unless something is done to alleviate the liquidity problem that exists in the marketplace today, about four out of 10, nonprofits are 40% of the market will collapse over the next three years. And that would be just a calamity, not only for the people that donate to these organizations and work for them, but for the millions of people that rely on nonprofits for food, and water and shelter and education and all the other social services that they provide. So the question then becomes, how do you incentivize people to give more to nonprofits and give more throughout the year without stressing people's bank accounts, because if you look at the trend in giving over time, it's actually gone. So individual giving has actually gone down about 72% of Americans donate to charity. And while that sounds like a high number, that number used to be higher, so we like in the high 80s. So people are giving less than actually giving on average, less over time. So what we did is we created the first ever philanthropic credit product, which allows someone to donate now and pay later, in effect, allowing the donor to finance a charitable contribution to the nonprofit, the nonprofit gets your donation upfront in a lump sum, the donor gets the full gross tax deduction for the entire donation. But the donor pays nothing. Today, zero money comes out of the donors bank account, although the money is received by the nonprofit. And the donor gets to choose over a certain time period, three, six or nine months how they want to pay that donation down completely for free, no interest, no fees, no transaction costs, no late fees completely for free. So basically, at the end of the transaction, the nonprofit's gotten the money, you've gotten the full tax deduction, you've paid nothing today, and you get to pay it at your convenience over time. And so it's it's an extraordinary model. Nobody's ever done it before. And I can tell you that we've raised a, essentially a credit facility of over $100 million to do this. So we have over $100 million of capital that we are lending out to donors to give to their favorite nonprofits. And what you'll see in the coming weeks, you'll see a button on your favorite nonprofits website that says Donate now pay later and you click that button. And in a matter of minutes, you'll be able to make a donation, they'll receive the donation, you get your tax deduction, you pay nothing today.
Wow. So how does the company earn its return on investment then?
Great question. So I was always a firm believer that it did not make sense to charge donors to give away money, right. So if you look at a lot of the even today, some of the nonprofit platforms, they charge a fee, they put a fee to the donor to give away money. And I always thought that was a bad idea, because you want to incentivize philanthropic giving. And if you're charging people to do that, like if we were to charge interest as an example, that would be a huge disincentive, because you're incurring a cost to give away your money, which is the opposite of what we want to do. And so what we've seen in our early testing, we've we just ran a big survey with over 1000 donors about our product, what we saw is about 83% of donors who saw our product and saw our video in said that they would double their intended donation to their nonprofit if they have the ability to pay it off over time, but the nonprofit received the capital upfront. And that really makes sense in the context of the credit markets. Because think about anything like a car payment, right, or, or mortgage or a credit card. Most people would never buy a house, if they have to put all their money down right away. Most people would never buy a car, if they have to put all their money down right away. Most people wouldn't buy that expensive TV, if they had to put that money down right away. But when you allow people to pay over time, the vast majority people say, Yeah, I can afford to pay this over time. So they're willing to come out of pocket more. So we're seeing the same thing in the nonprofit space, we're using that logic to do good in the world. So with 82% of donors are doubling their donation, the nonprofit is getting a ton more money. So the way that we make money is that we don't charge the nonprofits, any SAS fee, and the subscription P fee or any fixed costs. So it's free for the nonprofit from that perspective, we only charge a success fee. And what that means is that when it's successful Donate now pay later transaction has come into the nonprofit, we charged the nonprofit basically a percentage of that transaction. And so on a net basis after we charged that fee, because we're seeing around 82% of donors indicating a doubling, the nonprofits are coming out, you know, are going to come out a lot with a lot more money over time. And of course, it's completely free for the donor.
Okay, so is there a set transaction fee on that transaction for success fee that the nonprofit will pay?
So it actually varies and the reason it varies is because we allow the donor the option of covering a portion of that fee. So I'm sure your yourself and other donors who are listening have when you go currently now when you go to donate your nonprofit, oftentimes it'll say do you want to add 5% 3% 2% to your donation to cover the transaction costs and opt in rates for those are very, very high and we over 80% In most cases. So we are doing the same thing we're saying, if you want totally optional, you can opt to cover a portion of the transaction processing costs. And so that's why the rate varies.
Okay. And is there a maximum for the rate though? What's the max,
the maximum a nonprofit would ever pay would be 16.99%. Okay.
All right. So cool. So if I, if I was going to get a donation of $200, so I'm paying about $32.
That's actually a perfect example. So example would be like, I don't know, let's just, let's just say your favorite. Let's just say, the Red Cross, make it easy, the Red Cross. So it's just an example. But imagine you normally donate 100 bucks to the Red Cross, and you turn on the TV, you see, there's this terrible hurricane that happened you feel compelled to give or the situation Ukraine or whatever it might be. So now you can go to the you would be able to, in theory, go to the Red Cross, you'll see it Donate now pay later button, and we'll say okay, how much do you want to donate today art, that remember, you normally give them 100 bucks, and the money would come out of your account after transaction costs, they would probably get 97 $98, you get the tax deduction, the transaction is over? Well, now we say how much do you want to give? And you say, I'm here to give 100 bucks? Well, we would say the instead of giving $100 Today, why not give $20 a month for the next 10 months? As an example, you might say? Or would say why don't you give $22 a month for the next nine months? Because that's actually we offer a nine month plan. So $22.22 would be the breakup. And so about 82% of people have indicated they would accept that offer. Okay? So you say to yourself, Okay, what's $22 a month, I'm happy to do that. The nonprofit now actually does receive the $200, you do receive the full $200 tax deduction, you pay nothing today, in 30 days that 2222 comes out of your bank account with no interest or fees. And then we basically would pull back, let's just say an example 10%. That's just an example I'm making of that transaction from the nonprofit. So the nonprofit is netting out in this example. 180 bucks. And remember, you normally give them 100 bucks, right? Well, that's a significant amount of money more for them. So they're thrilled, of course, and it's cost you nothing to do the transaction.
Yeah, I mean, that's, that's kind of an interesting and creative approach to increasing the participation in the donating situation. So while I'm on a subcommittee created by this group called the generosity commission, I know their commission, okay, well, we need to get you in front of them. Okay, because we've been talking about how we could inspire more individuals to give and by the way, my numbers are a little more bleak than yours. We found back in I think it's back in 2003, or so that about 66% of families were donating to charity. And about two years ago, that number had gone down to about 49 and a half percent. Yeah, yeah. Oh, it's, it's declined rapidly and dramatically over less than a 20 year stretch. And, you know, I kind of worry well, what happens if we go another 20 years with that kind of decline? Our country will be very different than what it currently is. And I don't know if there'll be different good, because report institutions, not obviously, right, because we talk about, well, Americans still may be generous, they may be giving to people directly, you know, not going through intermediaries, and there's been a lot of talk about disintermediation in our world is you know, but we also know that you can't just be activist, right? Being an activist is important, it generates a tension, it gets us focused on a particular problem or set of problems. But ultimately, you need an organization to fix it in organizations has to be in place to take those ideas and make them happen. And so we stopped supporting organizations, we're not going to get a whole lot done in my estimation, or we have to really question how we're going to get things done. If you know, people are just going to act individually. So we need examples and ideas like this particular one that you've created. And I give you a lot of credit for using your background and your skills and your connections to create something that very few people either would have had the orientation to create, or in some cases, the means to create. We need more people thinking that way. What was it that made you consider this how did you pull all these threads together into a product? What when did that light actually go on and say, hey, you know, I might have something here.
And I appreciate you saying that. And I will say this was incredibly difficult to build. I mean, I mean incredibly difficult. We, we've effectively created a new credit product. I mean, it's a new asset class in the banking world that no one's ever done this before. And imagine trying to me I'm sure you can imagine, imagine trying to convince several banks to give you hundreds of millions of dollars to give away is not an easy proposition. And the economics need to make sense, the incentive structure needs to make sense. So very, very tough to build. And we raised also about a $10 million venture capital round to build this company as well, a private capital to build it. So also hard proposition to do in the current environment. But you know, this idea really interestingly came about by looking at the Buy Now pay later market. So I don't know if you've heard of these companies called affirm or Klarna, or afterpay, or sezzle, or zip pay, pal does it now they've created a subset of products that are called buy now, pay later, where you can essentially go and buy a product online, you'll get the product, now they'll front the money to the merchant, the merchant will receive the money, and you pay for it over time, usually with some interest payments. And so the way they make money is they make money two ways they charge the merchants money to accept a charge some merchants a fee to accept this type of payment method. But they also charge the consumers oftentimes, an interest rate is very different than us, obviously, that we don't do that. But you know, I looked at this marketplace. And I actually happened to know one of the earliest founding members of one of the largest one of these companies, and I had a conversation with them. And I explained what we wanted to do, not knowing what their reaction would be, I said, Look, we want to build the first ever Donate now pay later technology company, philanthropic credit product, etc, etc. and explained the idea and she was like, very smart, very, very smart. And I think, you know, art, ultimately, the most compelling sort of reason I did this is really two reasons. One, it needs to happen to your point a minute ago, philanthropic giving is massively on the decline. I read this crazy statistic a couple of weeks ago, that said, half of all philanthropic giving in the United States comes from 1% of the American public, which kind of makes sense, if you think about it, because income inequality has skyrocketed, and more, less and less people are getting essentially wealthier and wealthier at the expense of everybody else. And those people good for them, they're giving away a lot of that money. And that's great. But you know, giving people the dignity to be able to support their favorite philanthropic organizations is important. And what's interesting is when you actually talk to low income Americans, as a percentage of income, they give away more money, right? Because they really care. They're passionate, oftentimes, they're religious, what's really fascinating is when you talk to people that have benefited from nonprofit services, they almost always want to give back, but a lot of times they can't. And so our product would allow them to give back without incurring any cost, we're not going to charge them any money or interest or get them stuck in a death spiral or anything like that. So I think the first reason I created is because I fundamentally believe it can help solve the problem of decreasing philanthropic giving. And I think on a more personal level, the second reason I created it is because I love a good challenge in the space. And this is this is not easy to build. And it's it took a lot of effort. A lot of time.
No, I can't imagine how you had to get government you had to get the banking regulations had to be really challenging to work through. brutal. Brutal, yeah. And then you had to actually get people to lend you money or invest money in your company, which may or may not have been easy, depending on you know, who you are, and how connected you are. I haven't found anybody to invest like that. And so yeah, it was
it was for that. It's not easy.
No, it's not easy. No, and it's $100 million. And who knows how much more could be later on. And the money I guess recycles, too, right? So
it's a revolving exactly right. So it's a revolving facility. So as people pay their philanthropic loans, essentially off, the facility tops back up again. So in theory, in theory, we could learn more than $100 million, depending on the payment, your velocity, and so forth. But we could actually lend quite a bit more than $100 million in theory.
Yeah. So what is your expected default rate?
That's a great question. So if you look at the Buy Now pay later space average defaults hover around 3.8%. So they're actually reasonably low. But for two reasons, we actually think our default rates will be under that. The first reason is that we run some consumer modeling and some donor modeling, and some stoner studies. And we found that the average FICO or credit score of a donor is actually better than the average FICO score of a consumer. And it kind of makes sense if you think about it, because people who give away money tend to have a little bit of money, and people who tend to have more money 10 generally to have better credit scores. So that's the first sort of aspect actually dealing with a pool of people who have better credit scores. But the second reason is much more interesting, I think. So they're 1.7 million nonprofits in America. And the question is, how do any one of us decide where we want to donate? Well, it turns out that philanthropy is highly personal to people and oftentimes I'm so in fact, almost exclusively people will donate to causes and organizations they have a personal connection to. So I always tell people, you know, I don't donate to the cirrhosis liver Foundation, because I'm not affected by that in any way. But my grandfather has Parkinson's disease. So I donate to the Parkinson's Foundation, because it's personal to me, or I donate to the ASPCA, because I love animals, I have a beautiful dog, it's very personal to me. So because of that sort of moral, visceral connection that people have with their organizations, the idea that you would not pay down your philanthropic plan is totally anathema to people. I mean, people hate that idea that they would just sort of screw over the nonprofit. Now, I will tell you, in our case, if a donor does not continue to pay, it actually has no effect on the nonprofit, because the nonprofit has already received that money. That's one of the big benefits of our product, the nonprofit is insulated against loss and risks, they already have that capital, but even the sort of association of like I took this money out to give away and now I'm not going to pay it down. People get really weird about that. And so they don't want to default. So we think for those two reasons, default rates are going to be actually even lower than 3.8%.
Well, and you make a good point about the nonprofit being insulated, that's a definitely strong incentive for them to join this program. Knowing that they potentially will get more money, they'll have to pay some to cover the success rate. Right. But if the donor doesn't finish the transaction, they're getting paid. So that's fine. That's essentially covering them. So that seems like that seems like a fair trade. You know, you're you're insulating me from risk. At the same time, the cost that I'm going to have to pay is relatively modest. And now let's talk about marketing of the product. Is your company doing the marketing? And I guess your marketing in two different ways, right, you're marketing, to charities to get them to participate? Or does that happen automatically? I guess it would have they have to agree to be a part of this. Right? And so you have to get charities to participate, first of all, and then secondly, you have to get people to use the product. So how are you getting the word out about what you're doing?
So absolutely. So I've been in this space for 10 years, sort of what I call Phil tack philanthropy technology. And so I am pretty plugged into the nonprofit space in general. So we've already taken this out to hundreds, hundreds of nonprofits. Now, we're in a closed testing environment, right this exact moment. But in the next few weeks, this is going live. And what you'll start to see is you'll start to see this button on a lot of places. The good news is that when the nonprofits understand the model, and the economics, almost all of them are interested in using it. Because they say to themselves, there's no risk, you're insulating me against 100% of the risk. There's no loss. And basically, because donors give more when they're allowed to pay over time, which is a very common sort of psychological principle, in general, nonprofits are essentially virtually guaranteed to make more money using this product, even on a net basis after paying the fees. And what a lot of nonprofits really like to is when you compare this to monthly giving. So this is something we haven't talked about yet, but about half of all donations today done in the United States are done on a monthly giving programs just for sort of a donor gifts. Yeah, exactly. Right. So a donor puts in their debit cards, as I charge my account, 10 bucks a month, whatever it is. Now, the average one time donation in the United States is, uh, is anywhere from like $177 to $215 estimate sort of range, the average one time online donation, the average monthly gift in the United States is $54. So if you annualize that, it's that's over 620 bucks. So this goes to the exact principle I was talking about a minute ago, monthly versus one time. Now to the donor, our product is just a monthly gift, it's the same exact thing to the donor, as if they gave the nonprofit, the credit card said just charge me, you know, X amount of month. The difference is, in our example, now the nonprofit gets all that money up front, so they don't have to wait for it to drip in. So they love that, of course. But the other point, which is very interesting, is that about 50% of donors who pay monthly end up canceling before the first year is up. And oftentimes that things like expired credit cards expire, debit cards, whatever it might be, they're not even intending to cancel, but their payment method expires. Well, in the exact same scenario, if somebody is using our system to do that the nonprofit bears no risk, the nonprofit still gets all the money upfront. And they don't even have to wait for it to drip in. And if the cancellation rate happens, it doesn't matter to the nonprofit. So it's really a no brainer to other nonprofit. So you'll start to see this out there a lot. We have a sales team, we have a marketing team. And then to your point. Secondly, about we have to market to donors. Yeah. And you're exactly right. But instead of sort of us marketing to donors, the nonprofits are highly incentivized to get the word out because a transaction done on Donate now pay later will net them more money. So really, ultimately, it's up to the nonprofits to sort of say, hey, we prefer you to donate to us using Donate now pay later as opposed to monthly giving or pledging pledging is another thing I mean, pledges are Oftentimes hard to collect people make a pledge. They have to be collected at some point, using this product. Nobody really should ever pledge again. Because if you say to your donor, if you're a development officer and you say to your donor look, would you give us $1,000? And the donor says, Well, look, it's February, come back in December, I'll give you that 1000 bucks. In some ways, that's a liability, you need now need to wait to the 910 months and hope that they're gonna be able to pay it off at that time. Now you can turn around to them and say, forget the pledge. Why don't you just use Donate now pay later, we'll get the 1000 bucks. And you can just pay it off over the next 12 months and your convenience, right. And so it's a huge value to nonprofits that way, too.
So what will what happens? So if I want to as a donor, if I want to participate? Is there like an agreement we sign or something like that, that says, How to Yeah,
yeah. So it's like a clickable Terms of Service, basically. So basically, you'll go in looks at kind of like a normal donor flow, it'll say, How much do you want to donate? And what over what time period would you like to pay this off, knowing that the nonprofit will get that money today, put in your basic information, I think it's your name, your birthday, your email, address, your physical address, so we can verify an identity, it's really that person. And then they get presented with their Donate now pay later plan, they accept the Terms of Service, which basically says, Hey, here's your plan, you're gonna pay it off in X number of installments with no interest. And that's it, and then the money is sent to the nonprofit, and you'll get your debt and the donor gets their tax deduction.
If I'm one of the 3%, you know, something comes up, I just can't meet my obligation. What happens to me or my current trouble with that?
Great question. So we have a fantastic hardship loan program, where basically, if somebody says, Look, I lost my job, it's been hard for me, the economy's not good, whatever, we'll work with them to get them back on track. So we'll say to them, maybe we'll say, skip your next payment, no problem, or hey, look, if you pay X amount, you can pay off your loan early in less than the full amount, or, Hey, we'll put your loan on pause right now. And we'll revisit it at this period. So, you know, the goal is never to stress people out for wanting to be good people and philanthropic that is absolutely not the goal. And because there's no late fees, by the way, and there's no interest, there's nothing punitive about it.
Sure, sure. So whenever they get back to it, they can get back to it.
Well, we'll work with them. And we'll figure out the best solution that doesn't stress them out, that keeps them basically on some sort of cadence with their payments, and there's no late fees again. So we're not going to punish them basically, for doing that.
You could also be processing millions of transactions. That's the other thing, right? I mean, you have, you must have a pretty amazing technology to be able to manage all that
they a long time to build our CTO is incredible. He used to run engineering at MasterCard. And before that was at PayPal and visa. He's an very experienced CTO in the FinTech world, great product team, great compliance team. I mean, it's been it's an extraordinary team that's built this, they've all come together and sort of coalesced around the vision that I've had. And we've been building it over sort of a quietly over the last 18 months. So it's taken us almost two years to build and raise the appropriate capital, but it's going to be a fantastic help to nonprofits once it's live.
So going to be so now let's talk just getting to the end of the interview. What's your vision for this? Where do you think this can can go? What do you what can you actually do with this 510 years from now.
So if you look at the Buy Now pay later space, which is really in some sense, there's some comparisons here, what they say is basically look, you know, we can increase the average order value of a transaction by 80%. Plus, that's kind of their big claim. And oftentimes, they use different percentages, but their big claim is we can increase the average order value of a transaction by X percent, usually, it's 5060 70%. And if you look at the volume of loans that they're doing, I mean, they're over four or $5 billion a year from just one company. So it's extraordinary amounts of capital are going to ecommerce merchants online, my vision is to be able to sit here and five years and have the same interview with you and say, art, we increase the average donation value by 85 86% on an individual transaction basis. And as a result of that, over the last five years, we've increased philanthropic giving in the United States by 3040 $50 billion. Imagine if we could do that how much good we can do in the world, how much liquidity we could open up for these nonprofits. And ultimately, you hope that money trickles down to where it's supposed to go to the people who need it to the programs to the communities. And that is ultimately the goal.
Well, Dominic, listen, I want to thank you for for sharing this amazing story and product that you have with us. And also giving us your background, which is indeed fascinating. You know, really, you've touched on a number of things that I've also connected we didn't even talk about the Senate Finance Committee would have had that conversation another time. No, I really appreciate you taking the time to share this with us. Obviously, we'll be following this very closely. So we'll have to definitely keep in touch. I know a number of the accredited charity Is that our part of the BBB wise giving alliance will will be a part of this? I'm sure. And we should talk about that too, at some point. Absolutely. So love that. And to all of our listeners, let me just say, you know, you've been listening to dominant columns, who's the founder and creator of be generous, you're going to hear a lot more about this in the coming months, I know you'll be paying attention, it might, you might find it to be an interesting way for you to up your philanthropy, and support the favorite causes. If you're a charity, obviously, this might be something you want to look into, to see how it might increase what you can get upfront, and maybe even in the long run. So let's all work together to create more impact. This is a product that could potentially do that.
Thank you so much for having me on. I really enjoyed talking about this subject in general, how to increase philanthropic giving, and it's it's rare to be able to talk to someone who who gets it as well and understands the numbers and the problem we're trying to solve. So I very much appreciate you having the you know, on the program. You know, for anyone who is interested, our website is B, just a letter be generous.com. And we'd love to have you as a client.
And for all of our listeners, thank you for tuning in. You can find us on all major podcast platforms. If you want to subscribe, I hope you will. There are a number of other really interesting shows that we've done over the last couple of years. And I'll hopefully see you back here next week for a new edition of the art of giving podcast.
You've just listened to the heart of giving podcast with RT Taylor. Be sure to tune in next time for a brand new episode. To listen to our other interviews. Visit heart giving dot pod bean.com That's heart giving dot p o d b e a n.com. Subscribe to our show on major podcast platforms. The thoughts and opinions expressed on this podcast are the views and opinions of the guests, not those of the BBB wise giving Alliance or program affiliates. This podcast is for information and educational purposes only and is copyrighted with all rights reserved. This podcast is protected by pod beans Terms of Service