Classy, a San Diego-based startup, has raised $18 million in new funding from Mithril Capital Management and Salesforce Ventures to bring nonprofits and social enterprises into the digital age.
Classy powers fundraising campaigns, event management, and communication with donors for mission-driven organizations. The company charges a monthly fee for its SaaS, which nonprofits can customize to reflect their own branding and use to launch campaigns in a matter of minutes.
According to founder Scot Chisholm, only 10 percent of the $360 billion that U.S. nonprofits collected last year was raised online. The clunky offline method used to collect the remaining 90 percent is what inspired Chisholm to start Classy.
When Chisholm was fundraising for the American Cancer Society back in 2006, he was so frustrated with the standard process of organizing a group and collecting money that he came up with a method of his own — essentially a combination of Facebook, PayPal and Eventbrite, he tells me.
This got old quickly, so Chisholm hired a developer from a Craigslist ad (who later became Classy’s VP of engineering) to build a basic app, and officially launched Classy with his three friends Pat Walsh, Marshall Peden, and Joe Callahan in 2011.
Since then, Classy has been used to help more than 1,500 social enterprises, including Oxfam, The World Food Program and National Geographic, raise hundreds of millions of dollars.
“Before Classy, people would have to donate on a PayPal form, which is so impersonal and very transactional,” says Chisholm. “Organizations were hesitant to move online because of this impersonal nature.”
By letting nonprofits personalize their sites and making donating as simple as possible, Classy has been able to boost fundraising by an average of 220 percent year over year, Chisholm tells TechCrunch.
The average donation across the platform is $90, Chisholm tells me, and the largest amount donated so far is a $75,000 gift to an aquarium at the end of last year.
Ajay Royan, who led the round for Mithril, had this to say:
The classic way to do this stuff is almost like running a national political campaign — you have a local committee, a regional committee, and executive organizers all over the place. But there are these strong micro interest groups all over the world, and you can go global very quickly by surfacing them and bringing in the connection, community and transparency elements.
Team Rubicon, for instance, a veteran-led disaster relief organization, started using Classy in 2011, when it had less than $500k in total revenue. This year, they’re on pace to do over $2 million without having to hire any of their own developers.
Classy, currently a team of 80 employees, will use the funding to triple its 15-person engineering team and expand across the U.S.
“It’s been far too long that social enterprise and nonprofits haven’t had first-class technology like other sectors have,” says Chisholm. “Once they’re more effective and efficient from an operational standpoint, they’ll be able to solve the world’s social problems faster.”