The GoodCoin Foundation was created as the mirror image of traditional charitable foundations.
What if instead of holding large endowments and granting out a tiny portion, like the 3.75% each year at many Foundations, the GoodCoin Foundation gave away nearly all that it received?
Like many good ideas this one seems obvious in retrospect. Flip the model of building large endowments and giving away a little each year to a model of taking a little fee and giving out the rest immediately. In the Foundation world where "assets under management" equate to self-important swagger, this seems backwards, counter-intuitive...and therefore "hmmm, interesting." You can almost hear them saying..."you just need to get over that personnel costs hump." With a volunteer Board of Directors, the norm for nonprofits, we can. We have.
There are even more benefits from this inverted view. What if we didn't focus on fees? An often-underappreciated fact is that traditional charitable foundations charge their donors repeatedly, year after year, a percentage fee based on the the amount of money they hold back. The GoodCoin Foundation asks for a contribution only once. This may not seem that important until you realize a gift of $1,000 to a traditional foundation generates fees of more than $500 before the people or places that need a thousand bucks ever get it...and it will take twenty or more years for them to get that much money when doled out at a measly 3 or 4% a year. The GoodCoin Foundation asks for a gift of $50 or less on a $1,000 donation and does so only once. Moreover, the bulk of the initial donation reaches its designated charity much more quickly.
But why charge at all? Why not cut out the middleman and just connect the donor with the charity? This sounds easy, but what the GoodCoin Foundation does is negotiate with Fortune 500 companies on behalf of millions of small charities. That costs postage, internet connections, websites, banking fees, etc. Even so, our fees are much, much less than it usually costs a charity to raise money (typically it costs charities 7 to 15 cents to raise a dollar). The GoodCoin Foundation serves as a bridge and does so more cost-effectively than either the for-profit can send money or the nonprofit can generate it from its own solicitations.
This inverted business model of low fees and fast through-put to literally thousands of charities allows The GoodCoin Foundation to tap into a pool of funds unavailable to the nonprofit sector by offering cost-competitive grantmaking for employee retention and customer loyalty programs; programs that, until we came along, typically did not generate charitable gifts. We are creating new sources of money for the nonprofit sector here! That is what keeps our volunteers volunteering. The GoodCoin Foundation is an advocate for small local nonprofits that would typically not be able to even get a meeting to discuss such ideas with a large brand-name company. We help companies give back and help charities receive new sources of funding.
And finally, what if a foundation was created that focused on millions of small gifts rather than a small number of million-dollar givers? What if it truly encouraged the proliferation of charitable giving by linking purchasing decisions people make everyday to their sense of purpose that is core to the daily lives of customers?
Well, those “what if’s” are “what has” grown the GoodCoin Foundation into a 501(c)(3) granting out millions each year. It’s what motivated our volunteer Board to build this organization. We want to see just how big of an impact we (and you!) can make.