Rachel Klausner, Founder and CEO of Millie

This is Capitalism: Up Close, Inspired, Explained

Rachel Klausner would agree the first thing you need to know about her is that she’s a millennial — a 30-year-old product software designer from Boston, who has found her calling with an app called Millie, as in millennials. In the world of 2020, it’s a vehicle for her fellow millennials to make contributions to charities and other nonprofits. But as it grows, it could well become the dominant platform for givers of all ages. If you can use a dating app, you can use Millie.

Key Takeaways:

[:22] Ray Hoffman introduces Rachel Klausner, Founder and CEO of Millie.

[:57] Rachel doesn’t mind when people compare Millie to a charitable version of Tinder. Rachel has never used a dating app. Millie matches users each week with nonprofits that match their profile. The user swipes right to donate, just like on a dating app.

[1:39] Rachel’s parents had tried to instill into their children a passion for giving. Rachel is grateful for that influence. She refers to her Jewish practice of tithing to set aside a portion of her income to give to charity. Rachel says that for many years she was not thoughtful about where she was giving. She created Millie for thoughtful giving.

[2:33] Millie is short for millennials, the core target market of the app. Rachel wanted an app for the millennial generation to feel good about their contributions.

[3:22] Rachel feels very connected to others in her generation, the first kids with tech before the world knew how to handle technology.

[4:26] Millennials are very different from their parents in how they give. Their baby boomer parents give more traditionally and thoughtfully, Rachel says. The data shows millennials give most of their money through their peers, for run/walk/ride fundraiser events and unvetted campaigns through sites like GoFundMe.

[5:43] Millennials give a big portion of their wealth, but their giving doesn’t necessarily match the causes about which they care. Rachel believes this is because millennials are approached daily for donations through their social media, and it is hard to refuse.

[6:20] Rachel realized when she was doing her taxes that most of the money she was giving was going through her friends. That struck Rachel, who had grown up with her parents being very thoughtful about giving.

[7:13] This realization lit a fire under Rachel to ask how we can get people to be more thoughtful and be more empowered to give to causes that are important to them.

[7:30] Rachel was working on a different startup with a friend. It wasn’t a passion project for her. She was working on a charitable event on the side because she cared about it. As she spent more time on her side event, she realized she had to choose one or the other.

[8:14] Rachel realized she could use her software product-design skill set to scale the work she was doing for her event into an app for other events. She shifted her focus from the startup to developing the Millie app. Rachel explains what it took to develop the app besides designing it — amazing people, advisors, mentors, engineers, and more.

[9:53] Rachel’s first big error was in underestimating the time for the Apple Store to approve the Millie app. They didn’t approve it but demanded changes to the app that were not detailed in the Apple Store guidelines. It took weeks to get approval, which delayed the roll-out. Rachel notes there were other mistakes along the way.

[11:34] Rachel had about 100 nonprofit profiles in the beta version of the app. The nonprofits were excited because they were not engaging millennials through the traditional channels. They knew this app would reach them.

[12:41] Since the app was released, it has grown organically. Millie doesn’t do any more outreach to nonprofits. Every U.S. nonprofit has a base profile Mille has pulled from the nonprofit’s IRS 990 form. The nonprofits come to Millie to clean up their profiles with photos, videos, and content for the web and mobile app.

[13:36] To get the first 100 nonprofits, Rachel set up a Calendly link for people to sign up. Rachel did back-to-back calls all day for the first few months. Rachel loved talking to the nonprofits about their pain points, challenges, and successes. Best Friends Animal Society was one of the first nonprofits on board.

[14:43] Rachel was able to get donor-advised funds on board. It took a lot of long, hard conversations with a lot of funds. There is still a lot to be done to democratize giving.

[15:34] Getting into a donor-advised fund (DAF) on Millie starts at only $20, compared to a $5,000 minimum donation to a traditional DAF. Most DAFs are not looking for everyday donors. They want to service high-net-worth individuals.

[16:21] Millie is launching an employee giving program with employee donation matching from the employer. They are in the pilot stage now.

[16:43] Rachel explains that operating costs are covered by a 5% fee on every donation on the consumer side. On the corporate employee side, the company pays Millie to operate their account, so there is no transaction fee for employee donations. Eventually, Rachel expects to shift the consumer transaction fee as well.

[17:39] Companies of every size are thinking about how to engage with the community, what their social impact is, and how they give back as a company. Rachel is excited to have a platform that can service companies with 10 employees, 1,000 employees, or 10,000 employees. Earlier giving software was focused on Fortune 500 companies.

[18:55] The app has five stars in the App Store. Rachel acknowledges there are pieces to the product that they want to improve. Rachel is excited about building out new features for companies as they come to the Millie platform, such as competitive engagement for employees and teams.

[20:02] Rachel talks about the risks she has taken in going from the employee world to the startup world. She compares the first startup she abandoned to her experience with Millie. You must be passionate about the startup. There is so much risk. If it’s the right path for you, and you have the passion, it’s okay to feel scared sometimes.

[22:15] Rachel has big dreams. She always thinks of Millie as being the future home for giving through your employer or on your own. Millie is a connector for people to understand nonprofits better and find great nonprofits. There is scalable growth for Millie, for which Rachel yearns. She is excited to do good in the world.

[23:12] Millie’s growth means bringing on more dollars for nonprofits and that is what excites Rachel. They want to make a huge impact.

[23:26] Ray Hoffman gives the address of Rachel Klausner’s website, MillieGiving.com. This is capitalism.

Mentioned in This Episode:

Stephens.com

Rachel Klausner on LinkedIn

Millie Giving

Tinder

GoFundMe

Apple App Store

Calendly

Best Friends Animal Society

Donor-Advised Funds

Fidelity Donor-Advised Funds

Vanguard Donor-Advised Funds

Fortune 500