Bright Funds Modernizes the United Way Model for Giving

By Whitney Phaneuf , written on August 15, 2012

From The News Desk

The United Way pretty much invented social cause crowdfunding when it started collecting and allocating donations to select charities 125 years ago. But the nonprofit never moved beyond paper-driven campaigns. Launching in September, Bright Funds aims to automate the process by connecting nonprofits, donors and corporations through a consumer website and software platform.

"Only eight percent of giving took place online last year. Most philanthropic contributions are done by check-writing. It's almost unimaginable, considering my mom doesn’t even write checks anymore," says Bright Funds co-founder Ty Walrod.

In preparation for its launch, Bright Funds has established partnerships with 100 invite-only nonprofits including Teach For America and charity: water and built a website that matches donors to the causes they care about most.

Integral to the United Way's success was the workplace-giving campaign, partnering with large companies who would help raise money among its employees and match those contributions. Post launch, Bright Funds plans to onboard companies onto its software platform, which Walrod says easily fits into an existing employee portal.

“There needs to be a Vanguard for giving so people can manage donations like they manage their investments or 401k. If it’s integrated into the payroll process, it also makes employers matching easier,” says Walrod. "It’s company giving, but employee powered."

Walrod and his co-founder Rutul Davè met while testing software at Coverity, and it was Walrod's own non-profit OutServe that gave them the idea for Bright Funds. OutServe represented thousands of LGBT service members to help repeal "Don't Ask, Don't Tell." Walrod still serves on the board.

Using their nonprofit connections, Bright Funds carefully chose each participating charitable organization, which the current beta website places into four categories: Environmental, Empowering the Underserved, Education and Clean Water. Donors can read in-depth research on each cause and charity and, post-giving, gain visibility into how the money is being used, a feature inspired by

It's the partnership model -- with both nonprofits and corporations -- that makes Bright Funds more competitive with the United Way than other social cause crowdfunding sites. Rally, Causes and Razoo, which hit the $100 million fundraising mark yesterday, work more like Kickstarter, allowing any nonprofit to raise money and share its story.

There should be room for multiple startups to profit by taking a percentage for processing donations: Charitable contributions in the US from individuals, corporations and foundations totaled an estimated $298.42 billion in 2011. Request an invite to be notified when Bright Funds launches.