What's So Special About DonorsChoose.org?

A VC - musings of a VC in NYC

So Fast Company has selected DonorsChoose.org as one of its most innovative companies and on top of that, they decided to put DonorsChoose founder Charles Best on the cover of the magazine and write a longer article about them as well. It's pretty unusual that a non-profit would be selected for such a list and highlighted in this way. But then again, DonorsChoose is a pretty unusual non-profit. I've been fortunate to have been involved with DonorsChoose for the past seven or eight years and have been on their board for the past three or four. So I thought I'd list some of the things that DonorsChoose has done to illustrate the point.

- DonorsChoose launched a crowdfunding service and business model in 2000, fourteen years ago. To my knowledge they were the first crowdfunding service launched on the Internet, long before the leaders of the category like Kickstarter, Lending Club, and other emerged.

- DonorsChoose has built a network of almost 200,000 teachers, over 10mm students, and over 1mm funders. That network has brought $227mm of funding into public school classrooms but it is being used for a lot more. Entrepreneurs are using it to get things like 3D printers, underwater robots, and computer science classes into schools. DonorsChoose has become a distribution network in addition to a funding network.

- DonorsChoose has open data sets and an API that allow anyone to analyze what resources teachers and students are seeking. Increasingly policy makers are accessing this data to determine what resources are most needed in the public schools.

- DonorsChoose is a sustainable non-profit. They apply a take rate like every other commercial marketplace (it is currently about 13% and donors can, but usually don't, opt out). This revenue scales as giving scales and has been covering the costs of the operating the business for a number of years now. Any profits they make above covering their costs are given back into the marketplace, usually in the form of match offers.

- DonorsChoose looks like, acts like, and is a startup. When I walk into the DonorsChoose office, it feels just like walking into the Etsy, Kickstarter, or Twitter office. People are active, animated, and energetic. They have a large software and product team. They could easily fit into the USV portfolio and if they did, they would be one of our star companies.

Networks are replacing hierachies as we enter the information era. And in the world of non-profits, the DonorsChoose network can and should be a model of how you can build an organization with huge impact using a networked model.

Another node on the DonorsChoose network are corporations and their marketing and corporate social responsibility teams. Corporations and their brands have a place on DonorsChoose as well. They provide match and challenge funding in all sorts of interesting and innovative ways. If you are involved in these kinds of programs and want to work with DonorsChoose, you can go here and learn more and contact them.

It's very satisfying to see Charles and DonorsChoose get this kind of recognition. They are one of the most innovative organizations I work with. And I work in the innovation business. Congratulations DonorsChoose.