Sixpence - Roundup Crowdfunding

Fundraising has a stickiness problem. Donor retention hovers around 45%, with new donor retention at roughly 20%. The difficulty of fundraising contributes to significant burnout among professionals and high failure rates for crowdfunding campaigns.

The top two reasons people fail to give to causes that they otherwise support? Cost/affordability and “futility thinking” (ex. “The amount I can afford to give is dwarfed by the need size). So we created a method of giving that takes both of those friction points out of the giving decision: roundup giving.

With Sixpence, individuals can contribute to the causes of their neighbors, community institutions (e.g. schools), and nonprofits they care about with roundups on their daily purchases. This option removes cost and numbers from the giving decision and makes donations sustainable, making it easier to support each other in both times of wealth and hardship and leading to healthier, more empathetic, and more connected communities.

Fundraising, and the giving that supports it, are too difficult. ½ of nonprofit development directors in the US expect to leave their jobs within 2 years. As for amateurs? GoFundMe, with 90% market share for social crowdfunding, only has a ~10% success rate for campaigns hitting their targets. Of individual Americans who haven’t made donations in the last 6 months, 63% list cost/affordability as a reason. (MOE ±6%), more than any other reason. The second most-cited reason, at 22%? “Futility thinking”, another financially-driven limitation.

Local nonprofits and charitable activity form an important bedrock for American communities. Yet, the hyperlocal level is the most difficult place to fundraise and engage community donors. Between these difficulties, a large degree of community resilience and cohesion is lost as well. As Alexander de Tocqueville once said, "The love and respect of your neighbors must be gained by a long series of small services, hidden deeds of goodness, a persistent habit of kindness, and an established reputation of selflessness."

Participation in giving and support of one’s own community and neighbors needs to be accessible for everyone, regardless amounts given. The act of giving is what builds our empathy and satisfaction, not the amount.

The population served by Sixpence is two-sided: fundraisers and donors. 

On the fundraising side, we focus on what we term “community pillars”, high-touch institutions and groups that people frequently interact with on a local level, foundational to community health, but often underfunded. These include schools, community centers, local nonprofits, youth sports, and more. Community pillars serve as the modern equivalent of what the political philosopher Alexander de Tocqueville referred to as “associations”, bedrocks of American communities that boost community resilience, empathy, and cohesion. Individuals can also gain support from neighbors for their causes.

As for donors, Sixpence’s core roundup feature has the most appeal to individuals with annual incomes between $10k-$75k. The best thing about Sixpence is that roundups are an easy place to start with giving. Sixpence is extremely focused on enabling people from all financial backgrounds to give and then reap the social and psychological benefits of that giving. As one example, we’re offering free use of our platform to Title 1 schools in the US this year. Along with that offer, we’re working closely with school teachers, administrators, and PTO/PTA leaders to make sure that we’re serving them as best as we can.

The primary mission of Sixpence is to make it simple, easy, and affordable for low-middle income individuals to sustainably contribute to and support the people and causes that they care about. The chief way in which we currently do this is with our “roundup donations” option. Through our platform, people can support causes created by people and institutions that they care about, simply by rounding up each of their daily purchases to the nearest dollar.

Users link their bank accounts to the platform in order to facilitate this method of giving. They are able to cap their monthly roundup contributions; support up to 5 causes at once; discover new needs and causes in their community with their community map, by search, or (coming soon) by shared social connections; and keep track of their monthly roundups and impact.

The two chief things that are accomplished by providing this roundup option? First, roundups remove upfront cost from the donor decision, making the answer to a request to donate merely about willingness. This way, affordability is removed from the equation as much as possible, while futility thinking is avoided altogether (large needs easily dwarf small donations and trigger feelings of futility). Second, donations are made sustainable and reliable on an extended timeframe. With traditional fundraising, one-time donations are incredibly inefficient, requiring a significant amount of effort to be exerted again next month/quarter/year to get another donation of the same amount from the same person. Any fundraiser wants monthly donations, but these are hard to secure. Roundups, in function, gain fundraisers monthly donations.

We utilize Plaid in order to facilitate our roundups, the same platform that Venmo, Acorns, and many other fintech platform utilize. People can support causes on iOS, Android, and web apps, and can create and manage their causes from our web app.

Ultimately, digital solutions for crowdfunding have ignored the “everyday” needs of our communities. No major platform has emerged to enable people to contribute to their communities in an ongoing manner in a simple way. Sixpence aims to fill this gap. While GoFundMe and others exist for the “extraordinary”, providing a helpful avenue for people to support others in times of disaster, extreme misfortune, or in general situations that tug at our heartstrings, Sixpence exists for the “ordinary” needs of our communities, giving us all an easy way to be better neighbors.

Roundup platforms have existed for several years now in the realms of savings and investment. Roundups have proven to be a successful method of reducing cost-perception for everyday activities and encouraging new financial behaviors in a cumulative manner. However, it wasn't until Sixpence that a roundup crowdfunding platform existed. Sixpence is the first platform enabling people to contribute to the causes of their neighbors and community institutions. Even the few other roundup giving platforms that exist are limited to nonprofits only and fail to provide a solution for the growing body of individuals engaging in crowdfunding in their communities.

Besides this, we are the only roundup giving platform working to build a social experience. We understand why people give. We give because of the human connections behind our giving decisions. We give because of empathy, the sense of reward and accomplishment we gain from benefiting others, and because of an innate desire to do good. Sixpence is the only platform building out features to further enhance and reinforce these reasons for our giving activities.

The core technology within Sixpence is the fintech infrastructure behind our platform. We are able to track and withdraw roundups, facilitate withdrawals of funds raised, connect people to campaigns, hold funds, and overall enable easy giving with a bevy of features built into our infrastructure. The two technologies that our business model most relies on are Plaid and Stripe. With Plaid, we can access users' banking information (with their consent of course) and with Stripe we can facilitate the donation payment and disbursement process.

We are removing cost from giving decisions in a way that's never been done before. Roughly 60% of Americans (MOE ±6%) would either "Maybe", "Probably", or "Definitely" contribute to a cause they can think of with roundups on their daily purchases. 30% of Millennial Americans prefer roundup giving over all other methods of giving. Roughly 7% of Millennials can think of a cause that they would definitely support with roundups if that was an option.

As crowdfunding has evolved and the option of roundups for various financial applications has begun to emerge, public familiarity with both of these concepts is at a perfect point for a combination of the two to emerge onto the public scene.

With our platform's open beta having launched earlier this month, we currently have 61 campaign creators on our platform and roughly 30 campaign supporters.

In one year, we plan to have roughly 2000 campaigns and 35000 campaign supporters.

In five years, we forecast roughly 250,000 campaigns and 5.75M campaign supporters

Within the next year we plan to complete all of the foundational aspects of our technology and reach a critical mass in campaign supporters and contributors.

In relation to technology, we aim to implement social-media-esque features on the platform, enable one-time donations, complete a CSR-as-an-emloyee-benefit platform, add P2P fundraising by enabling people to build "Challenge Groups" to hit roundup goals collectively with their friends and family, and add several other features to enhance aspects of community and value on the side of campaign supporters.

As for users and fundraisers, within one year we hope to have proven the success of our model in early-adopting schools and nonprofits across the country.

The number one immediate goal for us is funding/investment. We need to spend about $100k more on technology alone for us to get the platform from Beta to completion; $250k for us to adequately enable sales, marketing, and customer success to bring users to that platform.

To develop additional value-add features, reach a critical mass that would allow us to become profitable, and scale this platform into communities across the US, we plan to raise a seed round of roughly $2M, expected in Q4 of this year, after we've begun to prove that our platform can be financially sustainable between our customer acquisition costs and our customer lifetime value. 

To prove out our unit economics to this degree, the only piece of the puzzle that we need to figure out is how to best enable campaign creators to onboard their supporters. We're currently working on UX to ensure that donor onboarding is simple and seamless, so that campaign's support can be maximized.

Within a 5-year timeline, the chief obstacle will be growth of the company itself. Our team will need to engage in a fair amount of hiring and building in order to not only get Sixpence into the hands of communities across the US (and the UK and Canada), but also to properly support those communities with the features and design they need to thrive. We'll also need to be careful to establish the right corporate infrastructure, technology development, culture, and overall keep Sixpence mission aligned.

We're currently in the MassChallenge Boston accelerator and are actively leveraging the network to both pursue investors (currently working with two VCs as mentors through MassChallenge) and to pursue potential partners that could help to derisk investment in our platform (including Microsoft's CSR team, the MA Department of Education, and potential early-user organizations whose brand association could increase our legitimacy). 

As for proving out our unit economics, we're building onboarding materials and a resource suite for our campaign creators. Given that roundup crowdfunding is an entirely new way of fundraising, we see it as our responsibility to "hand-hold", guiding our users step-by-step on how to best onboard their communities and supporters. 

We've already nailed the unit economics for acquiring campaign creators for "community pillars" (schools, community centers, churches, etc.). Now we have a target of at least 25 supporters on average for these fundraisers. When we've sufficiently educated, equipped, and guided fundraisers on our platform and are hitting that target, we'll have proven out the unit economics and scalability of our platform.

As for the 5-year obstacle of properly growing with a young and slightly inexperienced team, we plan to address this by building out a strong suite of advisors (with 3 current advisors and 3 more planned) and by hiring talent that's significantly experienced in either company-building or any of the segments we're focusing Sixpence for (e.g. fundraisers, ed-tech sales, nonprofit management, etc.).

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We have:

• 6 full-time team members working on Sixpence
• 1 outsourced developer
• 2 interns in marketing/sales

Our team has an extreme diversity of backgrounds across education, nationality/race, socioeconomic background, and industry and expertise, making us extremely well-rounded. We also know our space, as we've been fundraisers ourselves.

Among the Sixpence founders are:

• Christopher Haylett, an American who grew up on military bases across the world as the son of a US Airman. Christopher came up with the concept for Sixpence while fundraising himself, providing a real and intimate knowledge of our customers' pain and experience with fundraising. Christopher's background is in global development and international business.
• Juan Macias, a Colombian from Bogota who is extremely accomplished in product development. Juan attended the 4th leading university in South America, where he studied computer science. Soon after, he helped to build a fintech system currently accepting over 4M requests per month. While pursuing his Master of International Business, Juan came onto the Sixpence team as cofounder and CTO.
• Kristijan Kocic, a Serbian with a background in scrappy entrepreneurship, sales, and computer science. When he was made Startup Grind's Belgrade Chapter Director, Kristijan was the youngest ever Chapter Director for the international organization. He built a sales-as-a-service company and had two employees before dissolving the company to go to the US for grad school, where he ended up joining the Sixpence team as cofounder and COO

Besides the founding team, we've since added one individual each in marketing, sales, and development, each of whom has exhibited a passion for the Sixpence mission by making significant sacrifices. 

Sixpence has several organizations piloting (or preparing to pilot) our platform for a variety of use cases, including:

• Project Alianza: Enabling people to roundup their daily purchases to sponsor girls' educations in remote coffee-growing regions of Central America
• Y2Y Harvard Square: Enabling Harvard students to support the shelter of local homeless youth with roundups on their daily purchases
• FathersUplift: Roundup donors can support "Bags for Dads", contributing their roundups to purchasing welcome and rehabilitation bags for dads emerging from incarceration
• Brookline High School PTO: Enabling parents to roundup their daily purchases to support the educations of their children

Besides benefiting from use of the Sixpence platform, these community pillars are helping to provide a feedback loop, ensuring the development of the Sixpence platform matches the needs of both these organizations, their supporters, and future users like them.

Sixpence, on iOS, Android, and web, serves as both a "marketplace" and a tool for better fundraising, easier donating, and increased communication and followup around efforts of social/charitable significance.

The chief feature of this platform is roundup donations, enabling people to link their bank accounts and subsequently support up to five causes at once with change added on top of their daily purchases.

Roundup donations do three things for fundraising individuals and 501(c)3 organizations which 1) make fundraising easier for them and 2) make donating easier for their communities:

1. Remove cost perception.
   1. With no upfront cost in the giving decision, and future cost reduced to pennies at a time, almost anyone can afford to give with roundup donations.
2. Prevent futility thinking.
   1. People often refrain from giving due to the paralyzing effect of futility thinking. When the amounts we can afford to give are dwarfed by overall needs, we often just don't give at all. By taking the amount out of giving decisions, we also take out negative comparisons.
3. Provide sustainable funding.
   1. While monthly donations are the lifeblood of charitable activity, they only make up only about 15% of donations made annually. With roundup donations, individuals contribute from their daily purchases in a manner that cumulatively provides the same sustainable funding benefits as monthly donations, minus the perception of "another bill".

We're also increasing and enhancing the "why" of giving, creating features which provide a better sense of fulfillment and accomplishment for cause supporters.

Sixpence's chief revenue model is that of transaction fees. Sixpence takes a fee of 5.5% on funds raised. With current donation trends, this amounts to roughly $14 ARR per user annually. 

With the future goal of at least 25 supporters for the average cause/campaign, we would have an ARR of roughly $342 per campaign. We currently are experiencing a customer acquisition cost of about $40 for campaign creators, so as soon as we've cracked how to best enable them to onboard their supporters, this quickly becomes financially self-sustaining.

However, in order to grow to a critical mass that could lead to Sixpence being known and put to use across the country within 3 years, we expect to need to raise $2M within the next year and another $5M or so in a Series A in 2-3 years.

The path to profitability is rather simple, given our unit economics. The path to scale, and to the competitive advantage found in gaining both sides of a dual-sided market, is a little bit more complex.

In the near future, we plan to add an SaaS subscription revenue model as well, providing an enhanced campaign management platform and white-lable technology for nonprofits able and willing to pay a monthly fee for the Professional Suite.

For a social message to flourish, it needs the right network behind it. We're creating a platform, brand, and way of giving. But, more than anything physical, we're hoping to inspire a new way for people to think about community and support of their neighbors and institutions.

Of course the funds granted by Solve and resulting access to investment would be beneficial for Sixpence. However, the partnerships and media/thought leadership opportunities that come with Solve participation would be of significant value in their own right. Some of the partnerships we'd benefit from:

• MIT Media Lab and Network: We'd greatly benefit from mentors and student interns who could ideate with us on how to incorporate advanced technologies, such as A.I. and machine learning into our platform to improve the user experience.
• Media and branding: We'd have access to a network that could potentially assist us in understanding PR and taking the right steps to gain further media coverage
• Global network of influencers: Sixpence is beginning in the US, but its use is applicable anywhere that people have bank accounts and give. Our future plans to expand internationally could benefit from the guidance of world leaders and networks associated with Solve.
• Nonprofit network: Sixpence wants key nonprofit leaders to serve as early catalysts for our platform, benefiting legitimacy and our product development. Solve could provide access to key nonprofit leaders for pilots, feedback, and, if all goes well, advocacy.

Nonprofit leadership and network as early partners

Any organization or group that has high touch with their supporting communities would be a prime candidate for pilots of Sixpence. Specifically, we see significant potential for pilots with:

• College clubs and Greek society - ideally could partner with those at MIT to start
• University alumni fundraising (ideally piloting with MIT) - We see roundups as a potential low-cost way for young alums to begin their donor journey with the institutions that educated them
• Consumer-facing nonprofits -  Can provide "rewards" in exchange for tiers of roundup totals (e.g. New England Aquarium could provide a free visit to families after their roundups have totaled a certain amount
• Charity: water - It's a goal of ours to partner with this organization that has built significant leadership in how people give and nonprofit innovation
• Boston Children's Hospital - One of the difficulties experienced by individuals who have crowdfunded for medical costs has been that medical costs continue, while one-time donations do not. We'd like to explore whether roundup donations could be a good way for families' communities to support them sustainably in times of medical hardship, in addition to a pilot with the organization's fundraising team
• Foundations and international nonprofits - Nonprofits that have clear targets and have nailed they're messaging down to "$X accomplishes one ____" are perfect use cases for Sixpence
• National organizations w/ community-level branches - e.g. Boys and Girls Club, YMCA, etc.

Sixpence is currently free for Title 1 schools in the US. The reason behind this is that we truly believe that our platform can be put to use to enable economically-struggling communities to band together and support their children, community institutions, and collective needs. 

Title 1 schools and other institutions and organizations in impoverished communities of course benefit strongly from outside funding. However, the very act of giving itself helps to build empathy, social cohesion, and human connection, crucial things for a community to thrive. For this reason, even if individuals can only afford to contribute $5 in roundups each month (enabled through a roundup cap), they're still better off socially and psychologically at the end of that month than they'd be if they hadn't given at all (obvious benefits of funding raised put aside).

We want Sixpence to serve as a catalyst for underrepresented populations, helping them to band together, build community, and push their children and other beneficiaries towards brighter futures.

The number one reason why people refrain from giving to causes that they otherwise support? Financial affordability.

Reason number two? Futility thinking.

We needed a way to remove cost (and comparison) from giving decisions and make giving, of any amount, purely a matter of whether someone wished to support a cause or individual or not. That's exactly what we're doing with our platform.

Sixpence aims to enable giving like never before. On a direct scale, we expect the introduction of roundup giving to provide many community-level institutions with sustainable and reliable funding from grassroots supporters in their home communities. However, on a more philosophical and psychological level, our team has secret hopes that Sixpence, and the easy giving it's meant to facilitate, can help to address some concerning trends in the US and beyond in social divisions and loneliness, meaningfulness, and mental wellness. Giving benefits both the giver and the receiver, just in different ways.

We envision a world in which, for the average banked individual, giving and supporting their communities has been incorporated into the very act of making consumer purchases. The psychological and social benefits of constant collective accomplishment of purposeful goals and fundraising targets could possibly even rival the obvious physical benefits.