Carving a Social Media Fundraising Niche

Fundly Inc. wants to take the pain out of campaign fundraising by making donating easy — and social.

The software-as-a-service, or SaaS company, founded in Boston in 2008 as BlueSwarm Inc., moved its headquarters to Palo Alto, California this summer to take advantage of the region’s talent, venture dollars and social media ecosystem. The company plans to grow beyond its focus on political donations to include nonprofits and higher education as well.

The SaaS platform allows supporters of a cause or candidate to create their own social fundraising networks. Candidates and organizations can track and manage pledges and donations, and donations can be made via the Fundly website, Fundly for Facebook or any Web-enabled cell phone.

“‘Easy’ is our message, and that’s what Silicon Valley is funding right now,” said CEO David Boyce, a former Oracle Corp. executive who joined Fundly this spring.

Fundly is seeking to raise a $5 million round of venture funding this month, and has plans to aggressively hire engineers after the chaos of the November elections dies down.

To date Fundly has taken only $800,000 in funding from private investors, including Harvard business professor Clayton Christensen and Brad Gerstner, founder of Altimeter Capital, a hedge fund manager who sits on the boards of Zillow.com and Orbitz.com.

Fundly has helped Meg Whitman add $20 million to her coffers in the California governor’s race, and also is being used as a fundraising platform by gubernatorial candidates Tom Barrett in Wisconsin and Charlie Baker in Massachusetts.

According to the company, Fundly users convert 85 percent of their pledges into donations. Typical political campaigns convert 50 percent to 55 percent of outstanding pledges into donations.

For the Palo Alto-based company, that conversion rate translates into cold, hard cash. The company makes money by taking a transaction fee of 2.9 percent.

For organizations or candidates looking to scale up fundraising efforts, Fundly offers packages to bring the transaction fee down.

As of Sept. 8, Fundly has powered $182 million in fundraising, and was growing that number at a rate of about $500,000 a day. Boyce expects that number to drop off a bit after the frenzy of the upcoming November elections.

Individuals donated a total of $310 billion to various causes last year, making the small percentage that Fundly takes in fees potentially a very large number.

Boyce said Fundly takes a non-partisan approach to political fundraising.

And several advisers to the company believe that Fundly’s true value proposition comes not only from the platform’s ease of use, but also the addition of social media.

Fundly adviser Mark Johnson, former vice president of software engineering at Netflix Inc. and now the Silicon Valley-based chief data officer of Groupon Inc., said beyond dollars and talent, Fundly’s new location brings it into the epicenter of the social revolution.

“Every social player is here, and having that immediate accessibility to tech partners is valuable,” Johnson said. “You see companies now that are relatively basic ideas getting more traction because of social development.”

James Currier, co-founder and CEO of San Francisco-based Ooga Labs and social gaming company WonderHill, said Fundly has picked a great market because fundraising in the coming years is going to have more social functionality attached to it than ever before.

“This is going to happen, and they’re the leaders in it,” said Currier, also an adviser to Fundly. “They’re starting with the larger verticals, but after that they can go bottoms up and target smaller groups of people who can use the platform, type in what they need and just go.”

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Mary Duan writes for the Silicon Valley/San Jose Business Journal.