For years, individuals, and sometimes corporate teams, have participated in charity runs and walks to raise funding and awareness for causes they believe in. In most cases, the organizers of these events (large and small) have taken on the administrative and infrastructural onus of setting up the philanthropic portions that allow individuals to set up their own fundraising initiatives. What if a SaaS platform could facilitate individuals to partake and structure charitable giving, without relying on other parties, at the employer/employee level? Enter Groundswell, a recently launched philanthropy-as-a-Service platform that provides charitable fundraising tools and administrative solutions as an employee benefit. Employees are able to create and contribute to the pool of their choice (donor-advised funds), for causes that resonate with them, with employers providing tax-advantaged matching/gifting funds. Traditionally, corporate social responsibility and charitable endeavors have been concentrated on a handful of opportunities that are selected at the highest levels within the company. Groundswell’s innovative approach decentralizes corporate giving, creating enhanced engagement among employees and stakeholders.
LA TechWatch caught up with Groundswell Chief Product Officer Tammy Hahn to learn more about the company’s imminent launch, strategic plans, experience fundraising, and much, much more…
Who were your investors and how much did you raise?
Groundswell raised a $10M Seed round that was led by GV (formerly Google Ventures), with participation from Human Ventures, Moonshots Capital, Felicis, and Core Innovation Capital. This brings Groundswell’s total funding to nearly $15 million.
Tell us about your product or service.
Groundswell is building a Philanthropy-as-a-Service platform that will decentralize corporate philanthropy and empower individuals with charitable tools currently available only to the ultra-rich.
Our platform will provide companies with a new employee benefit that enables them to create an Individual Charitable Account, which is like a personal foundation, and then facilitates companies either gifting or matching funds into them. Employees are then able to direct those charitable dollars to nonprofit organizations when and where they want. Companies receive the full charitable tax write-off, meanwhile, the funds never hit employees’ W-2 – which effectively means their charitable giving has been subsidized tax-free.
What inspired the start of Groundswell?
Our team is made up of talented, high-performing individuals that were tired of building products that didn’t add value to society. We saw an opportunity to create an entirely new category and bring philanthropy into the 21st Century, which is exactly what we intend to do.
How is it different?
Traditional corporate giving today is a highly centralized function, usually controlled directly by a CEO or a small foundation team. Groundswell upends that model by decentralizing corporate giving and putting the power of corporate philanthropy into the hands of employees.
We’ve also reimagined the corporate donation matching experience. Whereas many companies will match an employee’s contribution to a charity, that process has always been archaic, frustrating, and shrouded in mystery. By providing employees with their own personal foundations and facilitating corporate matches directly into them, Groundswell has effectively eliminated the administrative burden of running these programs – and employees get the benefit of being able to donate twice as much.
Finally, on the employee or user side, we’re building the world’s most advanced and user-friendly app to bring someone’s entire charitable life into a single location.
What market you are targeting and how big is it?
We are building our corporate platform to service the full spectrum of businesses, from small privately held companies to the largest publicly traded companies in the world. We truly believe that the future of total compensation will include charitable giving, and we intend to lead that change.
What’s your business model?
We see Groundswell as a B2B2C play, wherein we’ll gain widespread user adoption by aggressively targeting corporate America with our enterprise platform. Over time, we see Groundswell becoming a natural component of a user’s financial life – similar to how someone would frequently check their bank account, brokerage, and 401k.
What are your post-COVID office plans??
We are proudly building Groundswell in El Segundo, right here in the heart of Los Angeles. Our goal is to build an in-person first company and culture, but with the natural flexibility to work from home as needed. We believe that being primarily in-person will be a strategic advantage in coming years, but particularly as we scale rapidly over the next 18 months.
What was the funding process like?
We moved quickly to raise a large Seed round for a few reasons. First, the VC environment right now is swimming with cash, so we wanted to strike while the iron was hot. Second, our founding team has built numerous successful companies and have deep relationships with many VCs, so that helped us accelerate the process by skipping straight to the top of many firms.
We pitched a half-dozen firms, most of them among the largest and most iconic firms in the world. We received a couple of offers, but it was clear that we wanted to work with GV. After several conversations with both the lead partner on our deal, MG Siegler, and a broader group of partners and operators at GV, we agreed to terms.
What are the biggest challenges that you faced while raising capital?
The first was being pre-product. We were looking to raise a significant amount considering we didn’t yet have a product or customers, but what we had was an incredible founding team and a clear and compelling vision.
Second, a handful of VCs tried putting us in a “charity” box and struggled to wrap their heads around the commercial prospects of Groundswell. With GV, they immediately saw this as both a massive commercial opportunity and an opportunity to build a product that could positively impact society. We loved that about them.
Second, a handful of VCs tried putting us in a “charity” box and struggled to wrap their heads around the commercial prospects of Groundswell. With GV, they immediately saw this as both a massive commercial opportunity and an opportunity to build a product that could positively impact society. We loved that about them.
What factors about your business led your investors to write the check?
More than anything else it was our vision and the team we’ve assembled. This group has tremendous experience building world-class enterprise products and we’re all fully aligned on what we’re setting out to accomplish.
What are the milestones you plan to achieve in the next six months?
Over the next six months, we’re going to execute against our product roadmap and get out into the market. We have a long list of companies standing by to implement Groundswell’s beta product.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
Persevere.
Where do you see the company going now over the near term?
We’re eager to establish ourselves as the creator and leader of the Philanthropy-as-a-Service category, but, more importantly, are eager to make the world a better place by making charitable giving a new table-stakes component of total compensation.
What’s your favorite outdoor activity in LA?
One of the main benefits of living in LA is the temperate weather year-round and being close to the ocean which means random beach days in November and January. It’s great for adults and for kids!
