Causes raises $9M for social giving

Faith Merino · October 18, 2010 · Short URL:

The startup for online donations transitions to standalone site and doubles donations

Causes, the company whose Facebook app lets users donate to charities and encourage their friends to donate, has raised $9 million in a Series C round led by New Enterprise Associates, with help from Founders Fund, Marc Benioff, Ron Conway, Karl Jacob, Keith Rabois, and Dustin Moscovitz.  Additionally, the Berkeley-based startup will also be offering $25 and $50 gift cards in Safeway and Vons stores in California that will allow customers to donate to a charity of their choice.

Founded in 2007 by former Facebook president and co-founder of Napster, Sean Parker, and grassroots organizer, Joe Green, the company’s recent Series C round brings its total financing to over $16 million.  The startup’s Facebook application boasts 119 million members who are connected to one or more of the 450,000 charities created on Causes.  One of its more popular features, the Birthday Wish, lets users ask friends to donate to a charity of their choice on their birthday. 

Recently, the Birthday Wish hit a record when Dave Morin, former Facebook employee and now CEO of the startup Path, asked Facebook users to donate to the UCSF Benioff Children’s Hospital in San Francisco, California for his birthday on October 14.  Morin’s Birthday Wish raised a record-breaking $10,000 in 24 hours, and as of October 18, the cause has now raised over $13,000.

Causes, a for-profit company which asks users to voluntarily donate a “tip” to the company, credits the unprecedented growth of its Birthday Wishes fundraising to its recent transition away from a reliance on its Facebook app to a stand-alone site.  Causes CEO Joe Green has said in previous interviews that since the company launched its official website in August, funds raised by the Birthday Wish have doubled to $20,000 per day, compared to $10,000 per day before the transition.

Between its Birthday Wish feature and a number of other fund-raising channels (such as partnering with businesses that pay between $50,000 and $300,000 for charity campaigns), the company takes in some $40,000 per day in donations.  It does not disclose revenue.

Joe Green explained the success of Causes and why it is such an advantageous model for non-profits and organizers, telling Bloomberg that money spent on large direct-mail marketing and telemarketing is often wasted, since only a handful of people actually respond. 

“The big untapped area was leveraging social capital between people to get things done in the world,” said Sean Parker in an interview with Bloomberg.  The big difference between traditional charity marketing campaigns and Causes is the social angle.  Causes allows users to recommend charities to friends and see which charities their friends support.

Some of the most successful campaigns on Causes include Aflac Inc.’s Cancer Center, which has raised $1.17 million through the company, more than any other group on Causes.  Second is The Nature Conservancy, which has raised $399,716, followed by the Humane Society of the United States, which has raised $372,005.

In 2009, Americans donated $303.8 billion to causes and charities, down 3.6% from 2008.

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