SAN FRANCISCO – Online giving rose by 13 percent and continues to grow, a study revealed, which probably explains the recent proliferation of nonprofits.
“There are 1.8 million nonprofits out there, and 30,000 organizations get nonprofit status every year,” reports Flipcause Co-founder and Community Director Derrick Cagaanan.
Most nonprofits, he says, are small organizations with small operating budgets of $1 million. This is not a lot of money. And in the nonprofit space, the cost of doing good in the community is expensive.
The technical tools for non-profit fundraising already exist online. “But they’re all over the place,” says Cagaanan. “(Although) the tools for donation collection, processing benefit ticket sales and database management for volunteer information in one form or another are there,” he explained.
That’s where Flipcause can make the difference, according to Cagaanan.
“For the first time in nonprofit industry, we are providing all this tech in a simple, easy to use platform that can be deployed within minutes on any nonprofit website,” Cagaanan says.
Nonprofits don’t have to build it themselves. Flipcause doesn’t have to come to their sites and start ripping apart layers of codes. “We install our platform at the back end of their website and, instantly, they can recruit volunteers, sell tickets and take in donations,” explains Cagaanan.
In the early 1990s, charities and various causes solicited with chain letters and petitions by e-mail. When web tools came out, it wasn’t long until influence marketing became a buzzword, along with Search Engine Optimization (SEO) and Search Engine Marketing (SEM). Then fund-raising tickets were sold on-line, not a few processed by PayPal. Soon Amazon Smile enabled online shoppers to donate a percentage of their purchases to the nonprofit organizations they supported.
Now comes Flipcause, which is “dumb-proofed” for non-tech users.
“The buttons are big and the fields are really big. It’s pretty hard not to know the next step,” says Cagaanan. “We did this because small nonprofits don’t have the time, the technical skill set or the budget to fiddle with technology. They shouldn’t lose time because their cause is more important.”
He adds, “Another unique thing about Flipcause is that we enable any growing nonprofit to also raise money through online shopping.”
So Flipcause marries the multibillion-dollar online shopping industry with social good. Any time a supporter shops at any of its retail partners like Amazon, Target, Nordstrom, Expedia and others, a percentage of the purchase can go to the nonprofit that they designate.
Flipcause charges a monthly fee ranging from $24.99 to upwards of $100, depending on the nonprofit’s requirements. Administration, security, upgrades and fixes are all included. A log-in and password are sent to the nonprofit after the service agreement. All these in real time in the cloud.
But in order for any website receive any donation, they have to pay for a merchant process fee surcharge, which is typically 2.9 percent plus 30 cents for any transaction. Cagaanan says PayPal charges nonprofits 2.2 percent plus 30 cents. “If you buy a ticket from Eventbrite, their process fee is 2.9 percent plus 30 cents then they will charge you a three percent processing fee on top of that.”
“Flipcause charges 1.9 percent plus 30 cents. But we don’t get that money. That’s just the cost for us to be able to charge a credit card. We don’t hold on to the credit card information. Our partner (not named for security reasons) does that for us.”
Security is a major concern. “Remember when fund-raising efforts to help super-typhoon Haiyan began? All those websites sprouted. Where did all those donations go when they were collected? And who’s going to manage those funds in the Philippines? We don’t hold on to that money, everything goes into escrow. We’re PCI compliant, SSI secured and the whole 256 bit encoded thing. One of the things we can offer is peace of mind,” he explains.
Because it works like PayPal, Flipcause also allows nonprofits to do their own analytics or analyze trends in transactions, donors and recruitment. This gives the small nonprofits the extra tools to do more.
Flipcause technology first came out in September last year. “This is new technology. Nobody out there is doing what we’re doing,” Cagaanan says. And they are doing well. In May this year Flipcause won the Founder Showcase Audience Choice Awards in Mountain View and first places at both Start-up Showcase and at S3 Accelerator Showcase, both in San Francisco.
Their clients include Integral Living Society, City Stage, Breath of Hope, Diamond Dream Foundation and Bohol Circle Incorporated.
As of this writing, Flipclause is clumped together with other companies along Mission Street. There are five of them on the team, including CEO Emerson Valiao (also a Fil-Am, who declined to be interviewed for this article) and Creative Director Alison Dale. But they also have access to advisors in legal, business development, finance and IT.
Before Flipcause, Cagaanan worked at a few high-tech companies. He cut his teeth in business when he and others opened The Kennel Boxing Gym in San Leandro. This venture was not all business because Cagaanan is an unabashed boxing enthusiast. He had a chance to see the Donaires work out.
Cagaanan majored in film at the Academy of Art in San Francisco. At 32, he’s still single and, unlike some third gen, he’s still cognizant of his roots.
“My dad was born in Oakland; my Mom, San Francisco. My grandparents from his side come from Bohol; her side, Leyte and La Union. Mom and Dad would speak Tagalog at home as a compromise. That meant I had a hard time because I didn’t know enough Tagalog, Visayan or Ilocano. And since my Mom grew up on Filipino food, she refused to cook them for me and my sister. So we both grew up on McDonald’s.”
He showed this reporter a treasured photo of his grandfather at 22. “It took 33 ship rides from Manila to Seattle to San Francisco to Oakland in those days. That’s an entrepreneur right there. He paid his way through the US by just selling tobacco.”
In 1936, his grandpa was one of the original nine that started the Bohol Circle in Alameda. “It’s the only Filipino-American organization that old that owns its own building. They started it when one of their members passed away and there was no such thing as insurance to cover the cost of the funeral.”
Seventy-five years later, Derrick Cagaanan is vice-president of the organization. Like the famed singing priests of Bohol, Cagaanan has music in his blood. “My dad tuned me onto Jimmy Hendrix, but I respond best to the blues. All my uncles played musical instruments.”