This Super Cool B-Corp Is Changing The Nonprofit World

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A version of this article previously appeared in Forbes.

Rose Broome, Founder of HandUp is rocking the non-profit world. HandUp allows donors to hyper-focus their donations to individuals with specific needs. This is a game changer for the homeless.

Rather than panhandling for spare change, HandUp, with the help of its partners, allows people in need to create a video which tells their story. Instead of putting their handout for money, they can give passersby a card which contains a URL to their video. Donors can then make targeted donations, knowing that 100% of the money will be applied to removing obstacles which are keeping the person in poverty.

In one instance, a HandUp client had secured an apartment, but they needed money for the security deposit. HandUp collects the money and then provides it directly to the landlord, ensuring that the donors’ funds are properly deployed.

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Intrigued and impressed with HandUp’s story, I sought out Rose, who graciously agreed to spend some of her precious startup CEO time sharing her story with me.

John Greathouse: Your background is in big data, as a data scientist. What led you to focus your energy on HandUp?

Rose Broome: “While I do love data, my background has always jumped between technology and social good. HandUp was an opportunity to combine both. I first got the idea on a cold night during the winter of 2012 in San Francisco when I walked passed a homeless woman sleeping on the street. I wanted to do something, but didn’t know what. I wondered why I could use my phone to order dinner or call a Lyft, but couldn’t do something to help her at that moment. I shared my idea with my friend Zac Witte, an engineer, and he said he would build it for me. That’s how we got our start.”

Greathouse: Some of the people I have spoken with about your startup are surprised that it is a for-profit entity. For folks who may not be familiar, please explain HandUp's business model and tell us why you elected for a social venture structure.

Broome: “HandUp is a new kind of hybrid model that combines the best of both worlds called a public benefit corporation (PBC). We can take advantage of traditional growth mechanisms and opportunities like for-profits, while also having our social mission baked into the legal foundation of our company. By combining the values of a social enterprise with the power of the for-profit business model, we strive to achieve both -- and use technology and business as a force for social good.

HandUp does not take an automatic cut of donations made toward our members’ goals -- 100% of proceeds go to those fundraising on HandUp. Instead we ask our donors to provide an optional ‘tip’ to the company to help cover our operational costs and almost 90% of donors opt in. We will also to continue to expand our technology offerings to nonprofits as we grow.”

Greathouse: HandUp is structured as a B Corp. Have you found the tension between doing well financially and doing good philanthropically to be a challenge? If so, how have you addressed this tension?

Broome: “The beauty of a PBC model is that it provides clarity to all parties involved. Our investors understood coming on that while we intend to grow HandUp into a financially successful company, we will only do so as it serves our social mission of helping people in need. We choose the for-profit structure because we believe this is the quickest way for us to grow HandUp and have the biggest impact possible.

At HandUp, we work with a vulnerable population, and it’s very important that the dignity of our members be respected. When we hear questions from the greater community on how we can be for-profit and for good, it gives us the opportunity to share our values and why we believe in the PBC model. It’s also a good opportunity to share more about our partnership model. The way HandUp works is that we partner with reputable nonprofits who have established programs serving their own local communities. Our nonprofit partners then use the HandUp site, with their clients, to fundraise for their goals and urgent needs. 

For-profit and for good do not need to be mutually exclusive. We launched HandUp because we believe that new solutions to poverty are within our reach. By combining the values of a social enterprise with the power of the for-profit business model, we strive to achieve both -- and use technology and business as a force for social good.”

Greathouse: Can you share any specific stories of folks whom HandUp has directly benefited?

Broome: “Absolutely, you’ll find stories on many difference profiles across handup.us and we share a new story each month on our National Fund and Bay Area Fund.

In specific terms, we were able to help Jeff, a talented flautist who loves to play music to make people happy - he told us his greatest reward is to see the delight on listeners’ faces after hearing a few beautiful notes. One evening during the holidays in 2013, he was kicked in the face while sleeping on the street, which knocked his two front teeth loose, impacting his livelihood as playing music is his main means of income. Now, 10 months later, Jeff, working with our partner North Beach Citizens, raised $3,600 from donors for dentures and dental work to play music again.

Lesley was also living on the street before she moved into a women’s shelter in San Francisco and gave birth to a beautiful baby girl. Working with our partner Project Homeless Connect, Lesley continues to work towards a new life for her and her daughter. On HandUp, Lesley raised over $300 for blankets, sheets and clothing for her daughter. Now she’s focused on finding stable employment.”

Greathouse: From the outside looking it, it seems that HandUp is an ideal platform for corporations to give their employees a meaningful way to give back. Have you gotten any traction by approaching socially-minded startups / tech companies?

Broome: “HandUp fits really well into many types of corporate social responsibility programs. We are a direct, transparent and hyper-local way to give back in the community in a way that shows the impact as it happens. We’ve seen companies like Zendesk utilize HandUp gift cards for customer appreciation, and provide the gift of impact at an event like Keen IO’s KeenCon, as well host internal matching campaigns like Box did for the team on #GivingTuesday. We also have an integration with Zenpayroll. Employees of companies on that platform can automatically contribute directly from their paychecks each pay cycle.

One of our most recent partnerships is with Google, who saw HandUp as an opportunity to engage in two ways. First through a $500,000 grant that will be focused on neighbors in need in the Bay Area. Second, Google provided each of their Bay Area employees with a HandUp gift card so that individuals could engage directly with those fundraising on HandUp.”

Greathouse: That’s fantastic. Good to know that some of the more forward thinking members of the tech community are amplifying their employees' ability to give by seeding their HandUp accounts. I know that the primary focus HandUp is to establish partnerships with non-profits who can use your platform to benefit their clients. What has the reaction been so far in the non-profit community?

Broome: “The response has been wonderful. Human service organizations encounter challenges on a daily basis when it comes to finding flexible resources for their clients. Where some basic needs are covered by general assistance programs, others fall through the cracks. For example, if the only thing keeping you from moving into stable housing is an overdue power bill, how do you find the funds to pay it?

The other piece is the technology we provide. On the backend, HandUp is a tool for non-profits to engage with their clients where they’ve seen a noticeable difference in working together on goal setting and financial empowerment. Just this morning I was speaking with one of our partners in Detroit and they were telling me before they found HandUp they were going to raise a grant and build their own platform. Not having a background in tech, they were hoping their grantor would be able to point them in the right direction of how to build it. While they were doing the research for the grant they found HandUp – they were thrilled and relieved this technology already existed and was available free of charge.”

Greathouse: I am not sure that HandUp's platform is for everyone. Some donors simply want to write a check to a national organization and move on. What is the core demographic with whom HandUp resonates and what do you think is your primary value prop to donors?

Broome: “I think many people who are looking to give back, both older and newer generations, want more of a connection with their giving. This is definitely a growing trend with the younger generation of donors, they are excited about making a difference and want to do so in a very transparent way. They want to know exactly how their contribution is being used and the impact it’s making, no matter how large or small.

Another element to note is that donors under 35 are interested in something bigger – they want to join a movement and build a community of like-minded givers. HandUp gives people a way to give directly and build a relationship with a specific individual in need. If a donor would prefer not to go that route, they can still contribute to one of our general funds and receive that impact update each month.

Another thing to note is that the words of support our donors send to our members really make a difference. It’s why that 1:1 interaction is important for both sides. Many of our members tell us these messages give them hope and motivation – this is something that could only be achieved with a direct giving platform.”

Greathouse: What is your definition of success for HandUp?

Broome: “There are 46 million people that live below the poverty line in the US. The problem can be overwhelming but we can take steps to make the change. By giving people a direct and tangible way to support people in need in their own neighborhoods, we can help millions of people move out of poverty.”

Greathouse: Do you have any tips for entrepreneurs who are fundraising for a social venture? Have you found the capital markets to be receptive to a dual goal of profitability and making a social impact?

Broome: “First, keep it simple. Too often we try to do too much out the gate and it ends up slowing us down. Keep it simple in your product and in every way you think about your venture. The second is that you can’t do it alone. Rally your community, friends, family, and even their contacts to build a movement around your cause.

From the market perspective, I can’t tell you how many of our investors started the conversation by saying they wanted to do something about the poverty they saw in their neighborhoods. HandUp gave them a way to participate in the effort with the expertise they already possessed - investing. Most people don’t realize how big the charitable giving and poverty alleviation efforts are in this country. And many of the technology tools used by nonprofits and government agencies are provided by for-profit companies. There is a lot of room for new innovations in this space, for both impact and profit.”

Greathouse: What changes in the platform can we expect to see in the coming years? More national partnerships? Additional verticals? More features?

Broome: “We will continue to expand across the US since our launch in Detroit and Oregon, adding new partners to serve more communities in need.

We’ll also be releasing new features for our donors, who let us know they wanted more ways to get involved. One of those will be our campaigns feature that will allow people to raise money specifically for a cause they care about.”

Greathouse: How can folks reading this lend a hand? How can they give someone in need a "hand up" through your platform?

Broome: “Donate directly to a neighbor in need’s goal and help get the word out about HandUp. Every single contribution makes a difference in someone’s life.”

Follow my startup-oriented Twitter feed here: @johngreathouse. I promise I will never tweet about killer burrito or majestic rainbows.

Image: Courtesy of Rose Broome

John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara's Faculty where he teaches several entrepreneurial courses.

Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.

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