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 5% each year, the GoodCoin Foundation gave away nearly all that it received and covered its administrative costs by asking for an additional donation equaling a tiny percentage of those gifts? Growth would be slow, of course, given the thin margins, but motivated volunteers who shared the vision could get the Foundation up and running. Once established the GoodCoin Foundation would be better positioned to serve both donor and charity interests because of its low fees and its eagerness to get the money out where it needs to go.
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 giving out immediately and slowly building donor support from an ever growing stream of contributions revenue. In the Foundation world where "assets under management" equate to self-important swagger, this seems backwards, counter-intuitive...and therefore "hmmm, interesting." You can 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 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 assets they retain from the gifts the donor has made to them. 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 5% 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 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. However, those big companies want to give back in ways meaningful to their customers and employees. The GoodCoin Foundation serves as a bridge and does so more cost-effectively than the for-profit corporation itself can do it.
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 typically do not have a charitable outcome. 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.