Take things that are only available to rich people and make them available to everyone else. That was the startup advice from serial entrepreneur and investor Joe Marchese to Jake Wood.
The result is Groundswell, a new corporate philanthropy platform that converts donor advised funds (DAFs) into an employee benefit. The platform announced on Wednesday $ 5 million in seed funding (via a SAFE) and is said to be talking to VCs about a Series A round that could be anywhere between $ 15 million and $ 20 million.
How it works: Each year employees receive a certain amount of money in their Groundswell DAF, which is donated to charitable organizations selected by each employee.
- The model is based in part on what Goldman Sachs is doing with its GS Gives program, although it is only available to partners and directors.
- Employers benefit from the tax advantages for charitable donations. But it still works better for employees who don’t file detailed tax returns (i.e., most employees) than appropriate charitable giving plans.
What you say: “This fits well with the company’s new focus on DEI,” said Wood, a former US Marine who co-founded and led Team Rubicon for more than a decade, a nonprofit that mobilizes other veterinarians to respond to natural disasters.
- “Gone should be the days when corporate philanthropy was made by a few executives or board members,” he added.
- “Let’s treat corporate philanthropy as a compensation component to recognize the diverse perspectives of our employees and help them identify the issues they feel are most pressing.
DAFs themselves aren’t the exclusive domain of the wealthy – Fidelity, for example, offers them with no minimum amount, while Vanguard only costs $ 500 – but the idea here is to better democratize giving to companies where decisions are typically made by a few.
The bottom line: Don’t bet against Jake Wood, who traveled independently to Port-au-Prince just days after the 2010 Haiti earthquake to provide emergency medical services with people who became his co-founders of Team Rubicon.