The Inside Journey of Benevity, the Platform Democratizing Corporate Giving

Based in Calgary, Alberta, Benevity is a global leader in corporate social responsibility, helping companies facilitate employee giving and volunteering within their workplaces. Benevity differs from other corporate giving programs by allowing employees to choose where to give and how to give, rather than just providing them with one option that they can opt in or out of.

Benevity’s model is clearly working: since they’ve been in business, the platform has helped 600 companies and their network of over 12 million employees donate 4 billion dollars and 23 million hours of volunteering time to 200,000 charities around the world.

To celebrate #GivingTuesday — a day that leverages the power of social media to create real change in communities by encouraging donations — we spoke with Bryan de Lottinville, founder and CEO of Benevity. He walked us through his startup journey, and all the twists and turns: from his initial idea to now running a software company that’s available in 17 different languages and in countries around the globe.

DISRUPTING THE BUSINESS OF DOING GOOD

“Before launching Benevity, I’d had a couple of exits from successful companies,” said de Lottinville. “After the sale of iStockphoto to Getty Images in 2006, I was feeling grateful but not necessarily self-actualized. I’d always had a desire to leave the world a better place than I found it. Up until that point, I had really only seen [social impact] in terms of attending the odd charity event. So in the latter part of my career, I wanted to be more intentional about connecting to that desire [of giving back].

I started poking around the non-profit sector, thinking maybe I could run a charity,” de Lottinville continued. “I concluded pretty quickly that I had neither the skillset nor the patience with the governance model to really thrive in that environment. Around the same time, I also made an angel investment into a company running a ‘consuming for good’ loyalty program. It ended up failing pretty miserably, but it did expose me to some metrics that were shouting [out] for constructive disruption.”

This happened in 2007. “At that time, people in North America were donating about $300 billion annually (a number that’s likely closer to $450 billion today), but less than 5% of that came from corporations,” de Lottinville explained. “That percentage had stagnated for the past 25 years, despite increasing demands for corporate giving from consumers, and the growth of corporate social responsibility. Most companies were pursuing a handout mentality around donations, rather than an investment opportunity mentality. The typical approach to corporate giving was a very top-down, once-a-year fundraising approach, where companies would twist arms for fundraisers once a year. And while that’s an effective way to hit numbers, it doesn’t feed into individuals’ appetite for meaning and purpose.”

De Lottinville sought to disrupt this issue. “I figured that if we could better integrate business impact and social impact, corporations would invest more into these social issues, and their reach, scope, and potential impact would drive social outcomes as well. There’s been a lot of research into the halo effect of giving. I saw the opportunity to integrate business impact into that narrative, so that we could get at engagement-oriented, experiential investments, rather than purely transactional ones.”

BUILDING OUT A BUSINESS MODEL THAT WORKS FOR GIVING

Benevity’s business model is similar to companies like that of Shopify and charity sites. “It’s pretty simple,” de Lottinville said. “Corporations pay a relatively modest set-up and annual subscription fee based on the number of eligible employee users. The charity vetting, payment processing and reporting, global disbursements, and charity support work is all paid for by a transaction that’s similar in nature and size to a credit card charge.”

As Benevity has grown, so has corporate appetite for the software. “We’ve been able to reduce the size of the transaction fee and increase the subscription cost,” de Lottinville said, “though it’s still much cheaper than the cost of most HR-related software.”

With any innovation comes challenges. “The trickiest part of our model is the donor perception and the different variations of the overhead myth,” de Lottinville said. “People want 100 percent of their donations to go to charity, somehow thinking that hundreds of millions of dollars will be processed and millions of support requests will be addressed and software will be built magically, without some sort of revenue being generated.

Many people also seem to think that if they donate on a charity website, that there’s no fee involved, but there is — it’s just not quite as transparent to them,” he continued. “Our fee is actually lower than most platforms, but people don’t see the fees that charities are paying for when they put a ‘donate’ button on their website.”

As a result of this perception, many companies opt to pay for their users’ transaction fees themselves. “It seems like a good thing,” de Lottinville said, “but ultimately, 2.9 percent of a donation is a small amount on an individual basis — the average donation size is $300, and individuals are able to donate to over 200,000 different charities. When a company is aggregating the 2.9 percent on $150 million in donations, however, that number becomes something they need to manage, and that changes the outcomes. Companies then don’t want their employees to be able to choose among as many charities. They want to lower their matching budget. That’s exactly the status quo that Benevity is trying to disrupt.”

GAINING TRACTION

“After we nailed down our ‘why’ and our business model, we set about building Benevity,” de Lottinville said. “We started with the back end, basing it on a donor-advised fund model — meaning we had charitable entities in different countries involved pretty quickly, allowing us to have a global footprint and give employees broad choices for their giving.”

Gaining traction with corporations was a slower process, however. “Originally with Benevity, companies had to build interfaces or embed our APIs into their systems, which wasn’t the most popular option. We had a couple of years of great meetings, but not much actual traction. The narrative stuck with people, but the reality of corporate budgets and priorities was challenging.

After a couple of years, we built out a cloud-based solution for giving, realizing that most companies wouldn’t have the budget or capacity to build out their own interface,” de Lottinville said. “We designed the solution for mid-market companies, figuring that the United Way or other non-profits were already successfully servicing very large enterprises and that they probably didn’t need our help.”

After building the cloud solution, Benevity started receiving early adopters in Calgary — friends of friends and small companies. “I was excited when Maui Jim came onboard, because they had 500 employees and at least I’d heard of them,” de Lottinville said. “But at the same time, I started thinking, ‘Okay, if I have this goal of building a multi-sided platform business that achieves network effect, how many companies with 500 employees do I need to get the level of traction and interaction that we need?’”

Before long, Benevity brought on its first company of size: Canadian Pacific Railway. “I remember talking to the decision maker there, who saw our demo and said, ‘Oh, I get it. You’ve turned giving from a chore into an experience.’ We scrambled to write that tagline down — that was exactly what we were trying to do then, and continues to be what we’re trying to do now.”

Soon after, Benevity got a request for a proposal from Nike. “When we went for a demo — aside from thinking, ‘I can never let any of our employees visit here,’ because [Nike] had a large campus with people exercising everywhere, while we were in a one-room, peach-coloured office above a shawarma shop — I realized that [Nike] had built their own giving solution, but were struggling to manage and scale it. And when they saw our solution, they said, ‘Wow.’ 

To be honest, I never thought we’d get a ‘wow’ from [Nike], and it wasn’t until that moment that I realized how low the bar was with legacy vendors in the large enterprise space,” de Lottinville continued. “So we ended up gaining Nike as a client, and after that, Coca-Cola came on — as well as Google, Apple, SAP, Oracle, and a lot of early adopters in the tech space.”

THE CHANGING NATURE OF GIVING

Not everyone was convinced, however. “A lot of our early adopters were progressive companies competing for talent. They had narratives around helping employees become more self-actualized in order to attract and retain them. For many companies, the idea behind Benevity was really resonating — but others didn’t see broad choice and user-centricity as the path to success. 

Many had this very top-down, less democratized approach to giving. There seemed to be a disconnect between employees and senior management. It wasn’t necessarily borne out of malice — it was due more to a lack of awareness and inertia, or efforts to maintain the status quo.”

De Lottinville found that the senior management at many large companies were engaged at the board and chair levels, and weren’t necessarily fond of a model that democratized the giving process. “There are still folks who don’t believe in our model,” he continued, “but I think there’s a growing appetite among millennials and the Gen Z coming in behind them that will drive a radical change in giving. I think giving is going to become more participatory, more democratized, more collegial. And as the prevalence of platforms like ours increases, I think giving will continue to be more oriented towards micro-donations.”

De Lottinville added that, at the same time, not all “acts of goodness” will be charitable. “We’ve already seen GoFundMe and Facebook move into the donation space, even though their recipients aren’t charities. I think we’ll continue to see impact measurement rise in importance as companies, non-profits, and providers like us realize the importance of impact investing, and how it drives purpose and efficacy. There are also a whole bunch of trends on the company side of things that I believe will increase their engagement in causes: there’s a rising focus on Environmental, Social and Governance (ESG) in companies; the Business Roundtable recently revised the definition of a corporation’s purpose to include goals outside of just earning stakeholders returns. These are all tradewinds that will increase engagement in giving.”

WELCOMING IN THE COMPETITION

“As Benevity has grown, virtually everything about our approach — our user experience, our structure, our pricing model, our narrative, even the look and feel of our interface — has been emulated by legacy participants in the space,” De Lottinville said.

“That’s not only flattering, but it’s been effective in the sense that it’s raised the bar in the charitable giving space. It’s helped elevate the expectations of companies, users, and non-profits, and has helped legacy participants move away from some older models that didn’t make sense.”

De Lottinville added that, historically, platforms have “charged corporations by the cheque for their donations — and that just perverts outcomes, because then companies just want to reduce the amount of charities employees can give to, because then they can reduce the number of cheques they need to write. They also want to reduce the frequency of payment, too — maybe make giving quarterly or annual — which changes the entire dynamic of giving.” 

Previously, platforms separated everything by clients. “So if a company had 500 corporate clients, they had 500 custom websites, 500 bank accounts, and 500 charity portals,” De Lottinville explained. “It wasn’t a model that led to any kind of efficiency, evolution or iteration on the charity side of the ecosystem. So a lot of that emulation has really been good for this space. It puts pressure on us to continue to be thought leaders, and to continue to think about what’s next.”

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