CEO Stories: Rachel Klausner, Millie
RE-THINKING GIVING FOR MILLENNIALS
Milliegiving.com, an app designed to make donating easier and more mindful for millennials, is the brainchild of software designer Rachel Klausner. Raised with a mindset that charitable giving is important, the 30-year-old Klausner found herself “embarrassed” by how much of her own giving was motivated by friends’ online request; a realization she had when she was doing her taxes. Boston-based Klausner is not alone: Data shows that millennials, while generous, tend to donate primarily through peers, in contrast to equally generous but more “thoughtful” baby boomers.
THE “TINDER OF GIVING”
Millie matches users to nonprofits that fit the app thinks would appeal to users, who can just “swipe right” if they want to donate. The similarity to Tinder isn’t lost on Klausner, who doesn’t mind the comparisons. Though she had never used a dating app herself, Klausner knew it was important to make thoughtful giving as easy as possible and to take advantage of her generation’s familiarity and ease with technology. She named the app “Millie” as a nod to her demographic group, whom she says often gets an undeserved bad rap.
Approximately 100 nonprofits signed onto the beta model; now, according to Klausner, nonprofits seek them out. Finding a way to appeal to millennials has been a longstanding challenge for nonprofits, who are able to customize their profiles on the app. And Millie offers access to donor-advised funds for gifts starting at $20 – a far cry from the more customary amounts of $5,000 and up. And Millie is also a platform for small- and midsize companies to offer employee giving.
This is Capitalism: Rachel Klausner, Millie
RH: This is Capitalism. I’m Ray Hoffman. Rachel Klausner would agree with me when I say the first thing you need to know about Rachel Klausner is that she’s a millennial, a 30-year-old product software designer from Boston who has found her calling with an app called Millie. Millie as in millennials.
And in the world of 2020, it’s a vehicle for her fellow millennials to make contributions to charities and other nonprofits. But as it grows it could well become the dominant platform for givers of all ages. And if you can use a dating app, you can use Millie. Is it too simple to call this a charitable version of Tinder?
RK: Yeah, that’s definitely a part of what we do. We’ve definitely been compared to Tinder and I’m not against it. [Laughs.] Having never used a dating app though I would feel totally under-qualified to run anything related to Tinder. So yeah, we basically match users each week with nonprofits we think they would love and they can swipe to donate.
RH: Do you swipe right to donate just the way you would swipe right if you liked the person on Tinder?
RK: Exactly. Yes.
RH: Okay, so there is a parallel there. I heard an interview with you in which you talked about the way you were raised has a lot to do with why you created this.
RK: I definitely think my parents spent a lot of time and energy trying to instill this real passion for giving in myself and my siblings, which I am so grateful for. I’m Jewish and there is this thing that we often do called tithing where we set aside a portion of our income to give to charity. And it’s just been something we have always been doing.
But for so many years I was just not thoughtful about it. So that’s actually where Millie came from. It was totally out of sheer embarrassment about how I was giving these dollars and I was giving them almost exclusively through my friends just asking online and not really being thoughtful about it.
RH: And by the way, Millie, going back to the name, I assume that’s some play on millennials?
RK: Yes, exactly. Millie is short for millennials because that is our core target. And I think millennials often get a bad rap so I wanted to bear the name so that we could actually feel good about the generation for once. You often hear people – when they start a sentence with millennials – you’re pretty sure it’s going to go south or its going to be something negative. So especially because we were doing something around giving we thought, why not dive in, lean into that. and call it Millie?
RH: The “About Millie” page on your website begins with the words, your words, “I am a millennial. Y’know… .” So part of your professional calling card, being a millennial, is that you have a feel for the megatrends of millennials?
RK: Yeah. I think a part of me feels very connected to other folks in my generation. Every generation has a different experience from the next and I think our generation had a really uniquely different experience because we very much grew up as technology was growing up. So we were really the first kids with tech and we were…it was as tech was evolving.
And so I think it was before the world knew how to handle technology so we’re definitely a byproduct of that. So I love to lean into relating to other millennials because I think we do often get a bad rap but we’re really just a product of our surroundings and the nature of the generation.
RH: Yeah, you were the first ones to really know and really have a natural feel for the evolution of technology.
RK: Yeah, for good or for bad.
RH: Well, yeah. And in terms of charitable giving, how would you describe that megatrend in charitable giving?
RK: So millennials are very different from the generations before them around how they give. I think we definitely share some qualities with Gen X, which is kind of right above us, which is forties and early fifties. But millennials are really a generation that is so different from our Baby Boomer parents, who give much more traditionally – and honestly much more thoughtfully. We, as a younger generation, even though we care and we’re passionate about causes, the data actually shows we give most of our money through our peers, which is kind of crazy.
So what that means is when someone asks us online and they’re doing a run/walk/ride or a birthday fundraiser or whatever, we give. And often times it’s actually those what we call “unvetted campaigns” through sites like Go Fund Me where it’s not necessarily a nonprofit but it’s just anyone posting anything online. So our generation is much more likely to give to all of those kinds of things and because of it we tend to not really think through what we’re passionate about, what the impact is, of these organizations we’re giving to.
And so even though we are really passionate about certain cause areas, we actually don’t always put our money where our mouth is. We do give a big portion of our wealth compared to other generations, but it doesn’t necessarily reflect what we care about, which is kind of crazy, and totally a byproduct of technology and the fact that we’re inundated with asks. It’s not because millennials are like “we don’t care about causes so we’re not giving to them,” it’s just that they’re asked essentially every day for some sort of donation and we don’t necessarily know how to say no, especially when it comes via friends.
RH: And as I understand it, the actual idea for Millie, the app, came as a result of you doing your taxes?
RK: Yes. I was doing my taxes and realized that most of the money that I was giving was going through my friends. And I was like “this is crazy.” And it just really struck me because I had grown up with my parents being really thoughtful about giving and here I was totally not, right? Just giving it away whenever people would ask.
And I joke that… It’s kind of ridiculous. I ended up giving away a lot of money that year to my athletic friends because they were always the ones doing run/walk/rides/races or whatever it was. And I was like this isn’t ideal for someone like me who’s not exactly as motivated to run as much as I should be and therefore not being able to fundraise for the causes I care about. So yeah, it definitely lit a fire under me to be like, how do we change that, how do we get people to be more thoughtful and feel more empowered to give to what they actually care about?
RH: At the time when the light went on about the Millie app, what were you doing professionally?
RK: I was actually working on a totally different startup with a friend and it wasn’t something I was super passionate about. And on the side I was working on Millie because I just cared about it and it…it wasn’t actually an app at the time, it was an event, and we were going to do this whole charitable…It was an anti-ball/charity-ball kind of thing.
And as I was spending all this time on this kind of side passion of mine, I realized that I really couldn’t do both. I was spending way more time on this thing that I cared about that wasn’t my startup. And then I, as I started thinking more about it and talking to more folks in the space, I kind of was like this is crazy – my background is in product design, so I’ve designed software for eight years—and I was planning this event. And I was like, “Wow, I could actually scale this if I used my skill set. And I would be so much better at it and it would go so much further.”
So that’s when I actually decided to shift and say you know what, this other thing I was working on, I wasn’t as passionate about it, it wasn’t moving as fast as I had wanted. I was only working on it for a bunch of months at the time, and decided you know what, this is something that feels like it’s me. So yeah.
RH: What does it take to develop an app?
RK: A lot of amazing people around you. People, advisors, mentors, everyone who really made this what it is. Because my background was in software design, I was lucky to have that perspective where I knew how to develop a product in the sense that I knew exactly what I needed, I could scope it out, I could get it all designed, test it, and then bring on engineers to actually build it.
And then aside from that really just getting people around the vision and the mission. And thankfully I think a lot of folks felt connected to the mission, A: because it obviously feels good but B: because it really resonated with people because people were like “oh yeah, I do give away all my money online via things I don’t actually care about.”
RH: And of course you made no mistakes with a startup, right?
RK: [Laughs.] A thousand mistakes, a thousand mistakes.
RH: Any really big ones?
RK: A lot of big ones. I would say the craziest one was that I…So I had always designed products that were on the web and this we were starting out with actually an iPhone app. And I thought, “okay we’d build it, we’d get it all together.”
We obviously looked through the Apple iTunes guidelines for the App Store and got it all prepped and ready, sent all the code in, kind of like send your app through their system and they always check it. And I had heard it takes a day or two to go through. And it just took so long and we had so much riding on it, we had a press release coming out and a bunch of articles coming out that were already written. And the App Store was like, “Listen, we’re not approving this, you have to make all these changes.”
I thought we were going to die. I thought that was it. Because at the time what they didn’t like was the whole premise of what we were doing, because they are really restrictive around anything [giving-related] on the App Store, which is kind of ironic. They have a lot of restrictions. And we went by them and then they said, “Listen we actually reserve the right to make up new restrictions and these restrictions aren’t in our guidelines but like we’re imposing them on you guys.” And we were like, “What?”
There were definitely a few weeks there where I misunderstood how much time we needed to allocate and resources to focusing on getting it through Apple. I think that was probably one of the biggest mistakes because we were pushed off by a long time and there were a lot of things dependent on it. So that was my first big mistake but I’ve made a lot of mistakes since then as well.
RH: Yeah, they kind of come with the territory.
RH: How easy was it to get the charities to come aboard?
RK: That was the first thing we did – was actually call nonprofits at the beginning. So we had about 100 nonprofits join us in our beta that made profiles and were really a part of this from the beginning. And I’m so grateful to them because we could not have done this without them. And I think it was just really resonant with them, especially the original 100.
These nonprofits were so excited about the potential to engage millennials because they feel the pain of not understanding them and also not fundraising from them. And so I think at every board meeting you’ll hear…if you’re on a nonprofit board everyone is saying the word “millennial” because they don’t understand them and they’re not giving in the same ways that people have traditionally given. So they are really a big question mark for folks in the fundraising space and the nonprofit development space
So I think the second we got on the phone with people, almost everyone understood and was like, “Yeah, this totally makes sense and we should be where the generation is.” So I think people got it and then since then, the way it works now, we’ve just grown organically. So we have nonprofits basically…we don’t even do outreach anymore. Nonprofits just find us and claim their profile all through our web app and make profiles.
So every nonprofit in the U.S. has a base profile that we take content from their 990, which is the form they send to the IRS every year. So we pull that information in and then they can add photos and videos and content and all that fun stuff that actually gets people to give. And they can see a dashboard of how people are giving and all that stuff.
So thankfully the first 100 were…it was a slog in the sense that we were just on the phone every day with dozens of nonprofits. And then by the end, now, it’s really organic and nonprofits are just coming in and claiming pages.
RH: When you talk about being on the phone, was that you on the phone?
RK: Yeah! [laughs] I set up what’s called a [unintelligible] so people could just sign up and we just kind of did back-to-back calls all day for the first few months, just getting the first 100 on board. And yeah, it was awesome. I loved it because I loved talking to the nonprofits and hearing their pain points and their challenges and also their successes.
RH: Yeah. When I went to your list of charities, the first one I clicked on was the animal area and I saw one of the charities that I know very well, Best Friends Animal Society.
RK: Yeah, they were one of our first nonprofits onboard. Their development team and marketing team are so innovative. They have been doing some of the coolest fundraising, forefront campaigns that I have seen.
RH: And you’re doing something that I might not have expected in that you’re giving small donors access to one of the great vehicles for giving: donor-advised funds. You make a tax- deductible donation at Fidelity or Vanguard or lots of firms, the money is invested, and only later after it has grown do you decide where you want to put it. How did you as a small entrepreneur make that happen?
RK: Yeah, that was hard. It took a lot of conversations with a lot of donor-advised funds to finally find one that was excited about democratizing them because it’s just not something that the space has really wanted to do. And I think there’s so much still in the donor-advised funds space and in democratizing philanthropy and access to the ease of basically a giving account that we still have ahead of us. There is still a lot to be done.
So I’m excited. I think we are just at the beginning, we’re still very much an early-stage startup, and there’s really a lot of cool innovation happening in the space and I’m excited to see where it all goes.
RH: In terms of a minimum donation, what does it take to get involved in a donor-advised fund, a DAF?
RK: The usual donor-advised funds – so the Fidelity charitables and your local donor-advised funds – those span between $5,000 and $25,000 minimums to start as an initial donation. And then obviously thresholds to grant out and things like that. So ours starts at $20, so it’s obviously a very stark contrast.
But yeah, I mean, it’s really interesting to see. We have had conversations with most of these donor-advised funds. They’re really not trying to go after everyday donors, they really are…they really only want to service high net worth individuals, that’s their bread and butter. So the way we’re set up allows for it, meaning everything that we do is technologically driven.
RH: And now you have another initiative about to launch.
RK: We are launching an employee giving platform. So employee matching for companies of all sizes. So we’re really excited, we have a few pilots starting up, and it’s going to be a lot of fun. It’s really, really going to be a lot of fun.
RH: Yeah that takes it in another direction, another important direction. And you take 5% of each transaction, right?
RK: Yes. So on our consumer side we take 5% but actually on our corporate side we don’t take a transaction fee, the company just pays us to operate it, which is great. So all of the donations that come through the employees and the employer actually go directly to the cause, which we’re really excited about. And eventually I think we’ll shift our consumers to that model as well once we’re sustainable.
So we’re really excited. I think the entire corporate market is yearning for this. I think companies are really starting to think about how do we give back, and not just at the Fortune 500 level, which really was ten years ago, who was thinking about how do we give back. But I think in 2020 almost every company of every size is thinking about how do we engage with the community, what’s our social impact, how do we give back as a company.
And so we’re really excited to be able to give this platform that really can service companies that are 10 employees or 1,000 employees or 10,000 employees. And I think until now, a lot of the employee-giving software has really been, has only been focused on Fortune 500 companies. So we think that’s awesome and there is so much giving there, but we also think there is so much giving potential for SMBs and mid-market companies and everyone outside of those top 500.
So yeah, we’re really excited. One of our pilots is a company that had never done employee giving before, or much giving in general. And they are going to be matching $50,000 across their employees, which is super exciting for us because…
You know, with our consumer stuff we were trying to shift dollars. We were trying to get and are trying to get young people to, instead of giving through their friends, really give through themselves and where they care about. So it’s just shifting dollars. Whereas with the corporate giving what we’re finding with these first bunch of pilots is its often net new dollars when we sign on an account, which is really cool for the world to think like, “Oh man there’s $50,000 more dollars going to charity.”
RH: You’ve got five stars on Apple’s App page. What can you do and what are you thinking of doing now the you’re a serious entrepreneur to go for six stars if they had six stars?
RK: [Laughs.] Yeah, I mean there’s so many different pieces to the product that we want to improve. We’re really excited with what we have, obviously. There are a bunch of things that I think we can still help push forward. I think the nonprofit experience can be better. I think I’m really excited about building out more features for companies as we bring them on.
So doing more competitive engagement for employees and teams within companies to engage in giving and be a little bit competitive about it. So there are things like that that we’re toying with and starting to talk to companies about and prototyping that we’re really excited to launch.
RK: What have you learned from developing Millie about entrepreneurial risk, which is after all the core of capitalism: enabling someone like you to take a risk and create something like Millie?
RH: Yeah, oh my gosh there is so much. Where do I begin? You learn so much when you go out on you own. I think I for many years as an employee at startups looked at building a company in a certain way. And once you actually go out and do it everything changes.
People have obviously very different tolerance levels around risk. And especially when you’re starting your own company, I think one thing I realized, especially given that I was working on a startup when I pivoted and scrapped it and totally started working on Millie, I realized that this risk that you’re taking when starting a company, it’s really important to make sure that you’re passionate about it because there is so much risk in it. Right? You’re risking years of your life and career and dollars and connections. You’re just putting so much out there, you’re very vulnerable as a person when you take something on like this and go out there.
And I think, first of all, I think it’s for certain people and also even people that can withstand it, I have found that there are some weeks where I’m like super risk-tolerant and then some weeks were I’m like, “What am I doing?” [Laughs.] You know? And I think it’s important to understand that it’s A, not built for everyone, and even when it is built for you, to keep yourself in check that it’s okay to feel that it’s scary as long as you feel really passionate about it.
And so I think in switching from this totally other start-up space I was working on to Millie, which I was super passionate about, it really validated the risk for me. I felt a huge stress that was really burdensome when I was working on this first startup because I wasn’t passionate about it. And the second I switched to Millie, although risk went up and down and it wasn’t always as easy week to week, it still felt like this was the right path. And I think that’s just something I think about when I think about risk.
RH: In your mind, how big can Millie be and how big should it be?
RK: I obviously have really big dreams for it. I think there are… I always think about Millie as being the future home for giving. We want to build a home for giving – whether that be through your employer or on your own – I think we really just want to build a home where people feel like “okay, I want to discover nonprofits, I want to learn about them.” And if they want to give through us, great, that’s not necessarily the primary thing we do, we’re really a connector. We want people to feel like they understand nonprofits better, and a place to find great nonprofits.
And in terms of how big to take Millie, I think often times entrepreneurs will say I want to build the biggest company ever. I am definitely one of those people. I think there is a scalable growth that I really yearn for and I’m excited about it. I think we really want to do good in the world and we want to grow as much as possible because our growth means that we’re bringing on more dollars for nonprofits.
That’s what I’m excited about. I wouldn’t say we want to take over the world. I think we just really want to make a huge impact and we’re excited about it.
RH: Rachel Klausner’s website is Milliegiving.com. This is capitalism. I’m Ray Hoffman.
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