When he founded Causecast, Ryan Scott focused on one major problem that charitable organizations were facing: they were paying too much in donation transaction fees. So he set out to find ways of lowering those costs, since they bleed so much money away from a non-profit’s core fund-raising goals. “I realized [nonprofits] needed better IT infrastructure because they were getting overcharged on transaction costs. I wanted to bring those costs as close to $0 as possible,” he says.
Now, about two years later, Causecast helps lower transaction fees using a number of methods, from linking the non-profits up with companies who cover the fees through dollars earmarked for cause-marketing, to making the payment processing infrastructure more efficient for non-profits using emerging technology. For example, Causecast is launching a system by which consumers can make donations via their cell phones, using a text-to-pay payment system that generates low or no transaction fees.
But Causecast is focusing on much more than lower donation transaction fees. It has grown into a kind of marketing matchmaker between non-profits and the private sector. It links worthy causes with companies that want to launch entire cause-marketing campaigns. “Cause marketing is a $1.5 billion industry and that is expected to increase dramatically as businesses realize they need to start supporting causes,” says Scott. He likens the growth in cause marketing campaigns—in which companies align their brands with specific nonprofits and pledge to support those organizations through donations or by sharing proceeds—to the growth in green products.
And just this week, Causecast announced a new project called IMPACT, though which it partners with media outlets to connect readers with nonprofits. The initial IMPACT partner is The Huffington Post. It is running news stories—take, for example, a story about an upstart sixth-grader in Seattle who started a program to raise funds to improve education for Rwandan girls—and then at the end of the stories, readers are presented with a donation link to a like-minded organization, such as 826LA, a writing program for students aged 6 to 18.
Scott says Causecast is in the process of finalizing a number of other media platform partnerships for IMPACT, and thinks the model could really transform the way that nonprofits attract donors. “It’s a way to make the content on these sites actionable,” he says. If IMPACT stories compel readers to support specific charities that are working to solve societal problems related to the news, it’s easy for them to make a contribution by clicking on Causecast-hosted links right on the same webpage. Or, readers can navigate through a widget (the one on HuffPost is sponsored by AARP) that also runs adjacent to the news story. The widget makes it easy to search for other nonprofits doing similar work.
Before starting Causecast, Scott co-founded NetCreations, an opt-in e-mail marketing company that went public in 2001, after which multimedia advertising firm SEAT Pagine Gialle bought the firm for $111 million.