DataDay Design is interviewing CEOs and Founders of start-ups and early-stage companies to chat about entrepreneurship and learn how these businesses are navigating the COVID-19 pandemic. This interview is with Alan Wei, CEO, and co-founder of Humanitru, a custom fundraising CRM, uniquely designed for the needs of non-profit organizations, helping them to develop and streamline the process of raising funds!
You can read more of our interviews with America’s brightest entrepreneurs here.
What is Humanitru?
Humanitru (est. 2016) is a software company that provides non-profits (NPOs) with CRM and fundraising solutions. It helps NPOs to source, manage, and engage with supporters, such as donors and volunteers. This allows NPOs to better oversee their stakeholders from one place and helps improve their understanding as to why and how they engage with them.
In 2019 alone, charitable giving by individuals was over $300 billion, making up nearly 70% of total giving. Despite that, 8/10 first-time donors will never donate to the same non-profit. In practice, that means that, on average, an NPO will churn 55% of its donor base each year. As such, NPOs constantly face the issue of finding and attracting donors. This is where Humanitru fits in; helping non-profit organizations maintain their donor base.
How Did Humanitru Get Its Start?
The company began as the brainchild of two University of Virginia students. While an undergraduate student, Alan met PJ Harris, who was studying law, and together they started a social media app called Totem. The app was designed to engage local college students to fundraise on behalf of local NPOs. For example, they’d get student groups to fundraise in competitions for which the winning groups would receive a prize like free pizza or lessons at a local yoga studio.
However, as Alan and PJ built the platform, they realized that NPOs didn’t have the tools to engage their audience effectively; their social media app meant little for non-profits if they couldn’t retain their donors. That’s where the inspiration for Humanitru began (though the name did not change from Totem until October 2020).
How is Building a CRM Different for NPOs vs. For-Profit Organizations (FPOs)?
NPOs interact with their customers (donors), very differently than do FPOs. Humanitru’s chief consideration is the breadth of how these organizations engage with their audience.
FPOs, for example, are typically divided into sales and marketing teams. Alan notes that marketing teams communicate through all different types of media channels. Though they have target markets, they don’t usually know, down to the individual, who needs to receive their message. For Sales, FPO’s are driven by the intent to get consumers in the door to buy the product, and less focus is placed on a multi-year relationship timeline.
NPOs, on the other hand, often have uniquely personal relationships with their customers which allows them to focus on strengthening that tie.Furthermore, the timeline of the relationship with customers is often much longer than for FPOs.
For instance, a relationship might begin with a high school student volunteering with an organization; as they enter college, that might turn into seeking a small donation through a fun event, let’s say a charity cornhole tournament. Then, as that student graduates college and begins to earn income, NPOs might seek larger monetary donations. Finally, as a mature workforce member, these organizations might receive stock and eventually benefit from estate bequeathment. Clearly, this is a long-tail timeline that FPOs strive for, but is more often typical for non-profits.
Traditional CRM’s aren’t built to handle such lengthy relationships; Humanitru, on the other hand, is designed specifically with this type of relationship in mind.
As a Fundraising CRM, How Has Humanitru Approached Raising Capital Itself?
Humanitru has raised two rounds of capital. The first was in July 2018, the second, in early 2020, right before the COVID-19 pandemic. Initial capital fundraising was for the purpose of proving out the business model.
Thanks to these first rounds raising capital, Humanitru currently serves about 65 NPOs in the United States with a team of 8 people, including part-time employees.
How Was Humanitru’s Experience With Lighthouse Labs?
Humanitru participated in Lighthouse Labs during the summer of 2019. The timing was extremely beneficial because it gave the company an opportunity to gain feedback and practice their pitching skills right before their successful second round of fundraising.
What Has Been the Greatest Challenge to Winning Over Investors?
Unfamiliarity with the non-profit space. Many investors think NPOs are not run like businesses but like charities. There’s also a general misconception that these organizations do not have strong cash flow or that it’s not a serious market. That’s why the development of tech in the non-profit industry has been so underfunded.
However, NPOs do have strong cash flow. Including corporations, Americans donated $450 billion in 2019, which is about five times the size of the US coffee market. Furthermore, NPOs will, on average, spend $3 million annually on CRM, analytics, and digital marketing software. As such, it’s certainly not a small market and the challenge is changing investor’s preconceptions.
One way Humanitru has done that is by introducing the market, but removing the word “non-profit” and replacing it with “small-to-medium sized companies”. According to Alan, investor’s ears perk up when the industry is illustrated this way; that’s when they know they’ve created an opportunity.
The tide may be turning though. In just the last month, the company has begun to receive more interest from the VC space as investors have begun to realize the opportunity in the non-profit sector. Even if NPOs have a social-focused mission, money can be made.
What Challenges Has COVID-19 Presented to Humanitru and Its Growth?
Like many other industries, the uncertainty that the pandemic has engendered in the non-profit space has been the greatest challenge. For Humanitru, that has hit home with fundraising. This year, the company’s fundraising round was cut short by half. Their outbound strategy was proving extremely successful, but the global crisis required a re-evaluation and shifting of focus.
On the positive side of things, Alan feels that the forced transition to remote work has actually helped to develop a stronger company culture. Many businesses struggle with culture and process when dealing with remote workers, so Humanitru made an intentional effort to focus on these areas when the pandemic began.
Perhaps most importantly, the state of the world has strengthened Humanitru’s mission. Non-profits continue to need help fundraising in the face of declining economic growth and Humanitru continues to ensure that they achieve their goals.
How is COVID-19 Affecting Humanitru’s Approach to Digital Strategy?
At the time of our interview, the company was in the process of rebranding from Totem to Humanitru. In combination with the pandemic, the rebrand required a greater shift of focus to digital and inbound marketing. Prior to the global crisis, Humanitru had a more outbound approach, but that has changed to a content-focused perspective.
In practice, that has meant running case studies, connecting with fundraising consultants, and building networks of thought leaders in the space to develop and share content that will attract consumers to the business.
How Would You Describe Humanitru’s Brand?
Humanitru revolves around the idea of serving humanity. The business serves an under-resourced and over-burdened sector. As such, the company slogan has been “helping the helpers”.
Everything Humanitru does, from its business model to its pricing and product is designed with its users in mind. While Alan recognizes that may sound trite, he notes that the company’s focus is on listening, and testimonials on Humanitru’s behalf recognize that fact. As such, the business brand upholds values of empathy and humanity.
In keeping with their values, the company recently chose to change its name from Totem to Humanitru out of respect for Native American people. You can learn about the company’s decision to change its name here.
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