Givebutter is turning a profit making tech for nonprofits | TechCrunch

GiveButter started in 2016 in a dorm room at George Washington University as a software solution to make nonprofit fundraising more transparent and fun. Eight years later, the company is profitable and has raised $50 million as momentum grows for nonprofit-focused startups.

The company’s co-founder and CEO, Max Friedman, raises money for a variety of organizations at the college, from raising money for GW’s Greek life to national nonprofits like TAMID. Friedman told TechCrunch that regardless of the size or scope of the organization he was raising money for, they all had the same problem: They all used a disjointed mix of one-solution tech software that didn’t actually work. Didn’t make the process any better and often came with hidden fees.

Friedman said, “We realized that nonprofits are using so many different tools to solve different problems, and the best thing we can do for this sector is bring everything under one roof. Is.” “It is present in restaurants and e-commerce; There [was] No Shopify or Toast for nonprofits.”

The result was GiveButter, a CRM platform for nonprofits that strives to be transparent and ubiquitous. This includes marketing resources, ways to track donors, fundraising tools for a variety of strategies, and payment processing. Nonprofits can either use GiveButter for free if their fundraising campaigns offer a space for users to donate to GiveButter, or organizations pay a 1% to 5% platform fee.

“We had customers from day one,” Friedman said. “It was very clear that there was a lot of demand for great fundraising tools and there wasn’t a great tool set for those change makers.”

The startup raised $50 million this week from Bessemer’s Venture Partners’ BVP Forge Fund with participation from Ardent Venture Partners. Friedman said the money will be used for marketing to help the startup scale as the company has grown to this size with almost zero marketing expenses so far.

What initially interested me in this deal – beyond the fact that the company is profitable from a largely donation-based revenue system or the fact that it calls its employees “butter slices” – was that it was a non-profit tech company. There was a big trend in the field, which has been emerging quite recently.

During the most recent YC Demo Day, two startups, GiveFront and Addy, were building technology for nonprofits. Although these companies were not the first nonprofit-flavored startups to go through YC, they are some of the first companies to build software for nonprofits; Many previous YC companies in this space are nonprofits themselves, and Givefront and Aidy stand out This year’s AI- and dev-tool-dominated group,

I asked Friedman if it felt like the momentum for this category had changed since he started eight years ago, and Friedman said it certainly had and the time was right for this category. There has been considerable consolidation in the sector recently, particularly with respect to private equity-backed non-profit software players. bloomerang And boneteraEach of which has made a handful of acquisitions in the last few years alone. This leads to higher fees and many nonprofits looking for less-expensive solutions, Friedman said. Once people become interested in the field, they often realize how big the potential market is, he said.

Americans will donate nearly $500 billion to charity in 2022, according to National Charitable Trust, down 3.4% from 2021. There are over 1.5 million nonprofits and growing, and building to get a piece of that market could also provide a huge windfall. GiveButter is a good example of this. The company works with more than 35,000 nonprofits and has processed more than $1 billion in donations, but it’s still barely making a dent in the overall nonprofit industry.

“We have about 1% market share,” Friedman said. “That’s amazing. I’m really proud of it, but I also love that 99% of the time there are nonprofits out there that could benefit, and a big part of what we did was to do that.

GiveButter may face more competition on the way. “Nonprofits are incredibly resilient,” Friedman said. “There [have] There have been recessions and booms in the economy over the years and there has been a growth in nonprofits. Nonprofits also solve some of the world’s biggest problems. I’m glad to see that more and more people are becoming aware of it and investing in it.”