One Year Later — Launching the Fundraising Report Card!

Back in October of 2015 I wrote an article titled Notes From Creating a New Product. In that post I shared my excitement about beginning to work with Greg Warner, the CEO of MarketSmart on a new software. Today I’m even more excited to share an update on our progress.

If you’ve chatted with me in person, I’ve probably tried to explain to you what the Fundraising Report Card is. But, to be entirely honest, I most likely left you feeling confused — I struggle to describe what I’ve been working on for all these months. By writing it out here I hope that I’ll be a little more effective in sharing what exactly I’ve been up to.

What is it

The Fundraising Report Card is a business intelligence and data analysis tool. The Fundraising Report Card empowers nonprofits to make data-driven decisions.

Data-driven decision making is such a buzz phrase, so let’s breakdown what it really means. And, more importantly, what it implies in the context of fundraising at nonprofit organizations.

First though, I need to share a brief overview of how donations work.

When you donate $20 to Save the Children (or any nonprofit organization) 35% (sometimes more, sometimes less) of that money goes towards overhead expenses. Overhead expenses include paying for consultants, investing in infrastructure, and sending letters to you asking for more money. (Yes, it’s a tough reality, but your donations are part of what gets invested in the “fundraising budget”). In a perfect world all $20 of your donation would go straight to the children that need to be saved — but in reality there are operating costs that need to be paid.

Okay, with that in mind let me frame how important data-driven decision making really is.

Right now, in this very moment your favorite nonprofit is spending thousands and thousands of dollars on direct mail appeals to try and raise more funds from you. There is nothing wrong with that (although some people might argue otherwise), they need to raise money and they need to ask you (and others) to help. Fine.

Behind the scenes most nonprofits are relying on a consultant (or a consulting firm) to help them decide who to mail to and what to mail to them — should this letter with a picture of a starving kid go to this list of donors or that list? This makes sense, right?

Like any good business the nonprofit wants a sound strategy before taking any action. Spending an extra $5,000 or $10,000 on a consultant to try and make sure you get the highest return on investment (ROI) makes sense.

This is the current system — hire a consultant, send out a bunch of mail, wait for results. You experience it, I experience it, it’s kind of shitty from the donor perspective to be honest (you end up with a lot of letters in the recycle can). Of course there are different techniques for different segments of donors (major donors don’t get mailed letters, they get a fundraising officer at their doorstep), but the process is generally the same.

It should be apparent that there are a few obvious issues with the current fundraising paradigm.

The Fundraising Report Card disrupts this pattern.

A user of the Fundraising Report Card (usually a fundraiser or executive at the nonprofit, but also consultants) uploads anonymous donor data to the Report Card. With this data the Report Card calculates fundraising key performance metrics. Also known as, “really important statistics we should have been monitoring and analyzing for the past few years”.

Here’s an example, taken straight from the for-profit sector — customer retention broken down by engagement channel. Think about it for a moment, what do you think the odds are that Netflix keeps track of how many users they retain each month? High, right? They have shareholders to report to every quarter, and you better believe those shareholders want to know how many users Netflix has been retaining. (More on this here).

Internally, Netflix may break down that metric even further. They might segment the data by plan type and demographic information. What is our retention rate among users paying $20 or more a month on the east coast?

Answers to questions like these help inform strategy and are fundamental in setting realistic goals.

Yet, when it comes to the nonprofit sector a void exists. Sure, data abounds, but how can a fundraiser, executive director, or director of development really be asked “what channel provides your best ROI?”, most don’t have the tools to answer that question. And if they have the tools, they are not easy to use. They are inconvenient and clumsy… not to mention expensive. This is the void that the Fundraising Report Card fills.

By providing fundraisers, executive directors, consultants, and and even board members with access to easy to comprehend key metrics and interactive reports, we’ve created a platform that allows for data to be a vital part of decision making.

For example, we generate a retention analysis report, just like the one Netflix would use internally. And, one of the great things we do right off the bat is segment that data by giving level. Users can take it one step further and upload historical data based around specific appeals, and before they know it, they are taking a peek under the hood of their fundraising machine.

How is our donor retention among mid-level donors who have received our end of year appeal letter? With the Fundraising Report Card the nonprofit can answer that question, and depending on the answer they can adjust their strategy. Ultimately the nonprofit cuts costs and invests in fundraising efforts that prove to have the highest ROI. Cool, right?

You can learn more about the Fundraising Report Card here, and you can read a short case study from one of our early users here.

What I’ve been doing

Since August of 2015 I’ve been working with Greg to develop our strategy for the Fundraising Report Card. Beginning in January of this year, I was given the resources (money, time, people) and the responsibility (hit deadlines, set product demonstrations, build my network) to take this idea and make it into a reality.

On April 4th 2016 we launched the beta version of the Fundraising Report Card. Leading up to that event I spent most of my time focused on product development. I consider this my “product manager” phase. A lot of my time was spent on:

  • developing a product road map
  • determining which features would be included in which release
  • managing expectations of key stakeholders
  • learning about software as a service business models
  • reaching out to industry leaders who were interested in providing feedback and testing
  • designing the logo and front-end of the application
  • and writing a lot of Angular and JavaScript code (user interface stuff)

The objective early on was to get a minimal, functional, viable product in the hands of our potential users. We started working towards our April 4th release date at the end of February. We hit our deadline and we got plenty of engaged users to test it out. We found a lot of bugs, got a lot of great suggestions and learned a ton about the market we were trying to position ourselves in.

After the initial product was out in the wild I pivoted my focus towards getting people to use it. And, most importantly, getting those people to talk to me. This was, and still is part of the “collect feedback” phase. I’ve spent a lot of time…

  • reaching out to people on LinkedIn
  • setting up screen-share demonstrations
  • holding phone calls with existing users
  • hosting webinars with industry groups
  • configuring automated emails to nurture and engage users
  • and playing the role of “support agent” on our live-chat widget

Today my role has evolved even more. Elements from the product management, and collecting feedback stages are still part of my day-to-day, but now I have started the transition into “sales”.

This stage has involved a lot of…

  • researching pricing psychology
  • developing relationships with potential “partners” (consultants, consulting firms, data CRM companies)
  • organizing sales materials
  • building the foundation of a sales funnel (deal stages, workflows, etc.)
  • writing marketing and sales copy
  • talking with more and more users
  • and getting people (nonprofits) to give me their money

Sounds kind of fun, right?

Moving forward

Taking the Fundraising Report Card from idea to fruition has been an educational, challenging, and unbelievably fun process. Yet, the most exciting and compelling moment so far has been receiving supportive feedback from users.

For example, I recently I completed our first case study. The client, the Director of Philanthropy at a multinational relief organization with over $60 million in annual budget, used our beta tool and had a great, positive experience.

Creating that case study meant talking with the client and learning how they used our platform. Hearing their Director’s comments and learning how powerful our software was for them made me feel vindicated.

Receiving positive feedback is some sort of validation for all the work our team has put into this project. For me personally it has helped frame how important what we are working on really is.

Learn more

If you’re interested in learning more about the Fundraising Report Card please take a look at our website (press play on the video and you’ll even get to hear my voice!).

If you have any questions for me, like, “Zach, how the hell did you end up making some data analysis tool for nonprofits?” please don’t hesitate to reach out.

And finally, if you want to learn more about the nonprofit sector and how you can make an impact check out some of these resources…

Considerations for “Freemium”

Freemium – the combination of “free” and “premium” – has become a mainstay business model for many technology companies.

The theory is simple. Users get access to basic features at no cost, while they also have the option to pay a subscription fee for more advanced capabilities. There are examples of prominent freemium companies across every sector. If you have listened to music on Spotify, networked on LinkedIn, or sent an email through MailChimp, you have experienced it firsthand. Slack, HubSpot, and Box come to mind in the B2B world as well.

For businesses the primary benefit of freemium is obvious, it’s an organic marketing tool. For a small company, freemium can seem like an attractive way to get market share fast. In theory, free users will use and share your product or service. Eventually, some of those free users will upgrade into revenue generating premium users.  Yet, as with most theories, freemium is not quite that simple. Before an entrepreneur makes the decision to go freemium they should ask themselves a few questions.

What market type are you entering?

Taking a page out of Steve Blank’s book, The Four Steps to the Epiphany, the first consideration you need to look at is market type.

Let’s assume you are entering the existing market of mobile music streaming. Since you are entering an existing market your goal in year 1 is to gain as much market share as possible. Freemium makes sense. Your free software should market itself and bring users to you. This does not mean you should overlook mature competitors who are offering similar products or services. Organic growth from free users may be stunted if your free feature set is not “good enough” to draw users from alternative free services. (Think about Peter Thiel’s “be a magnitude better” theory).

If you are not entering or re-segmenting a market you must be creating a new one. Your goal in year 1 is to educate your target market. Offering a free version of your product or service can be a cost effective way to do this. You may also mitigate expenses on traditional marketing and sales activities. Organic growth may be hard to come by because there is no community or industry to evangelize around your company yet. But, the benefits of empowering new users to learn on their own can provide meaningful long term benefits.

Freemium can work in any market type. Identify which you are entering to help clarify what potential pitfalls lay ahead.

What is free?

Imagine you are product manager of a new software with 15 distinct features. You decide 5 of the features are basic enough that any user can have access to them while the other 10 are only for those who pay. How do you know that you’ve made the right choice? What do you do if it turns out you were wrong?

Remember, the primary benefit of freemium is in attracting new users. That makes the “what is free” decision overwhelmingly important. A 2011 research paper written by Kim Joar Bekkelund, titled Succeeding with Freemium analyzes the thoughts of many academics focusing on this problem.

There are three main ways to differentiate your free and premium product.

  1. You can offer less functionality in the free version.
  2. You can offer less capacity in the free version.
  3. You can only offer the free version to some users. For example you let nonprofits use your service for free, but charge for-profit organizations.

These concepts are relatively straight-forward, the difficulty comes in executing one, or all effectively. One strategy to optimize your free vs. premium differentiation is to use beta tests as a crutch. Overtime you will be tweaking your free vs. paid differentiators based off of user feedback and the data you collect. Running many rounds of beta tests can be a cost effective way to learn what your users respond to.

Can you afford free users?

The freemium model is only profitable when the variable costs of free users are less than the profits generated by premium users. In the case of software products or services this concept is easy to grasp.

All expenses  that are not “one-time” are part of your variable costs. Money spent on servers, technology infrastructure and people must be less than the operating profit you realize from premium subscribers. If it costs you $1 a month for every free user you need to be realizing at least that much in revenue from every paid user.

By modelling future costs and watching expenses you can somewhat reliably predict if the freemium model is plausible for you.

More questions

This blog post touches on a few important considerations for freemium businesses. Below are more questions that you should pose yourself before deciding to go into the free/premium landscape.

  • Do users need the premium offer?
  • Are free users providing referrals?
  • Are you hitting your target conversion rate?
  • Do you have a large addressable market?

Related readings

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One Year after Resigning from College

One year ago I left the University of Pittsburgh.

In early December of 2014 my mom was diagnosed with stage IV lung cancer. On December 22nd she shared the devastating news with me.

Two week later I went back to Pitt for the start of the second semester on January 5th.

Four days after that I had packed up my bedroom and was on a flight back home. There was no decision to be made, I knew that I wanted to be with my family.

In the time since I have had many, “when are you going back to college” discussions. I have not returned to school, and my current plan does not directly involve it.

Without school in the equation I have managed to do a lot in the past twelve months. I’m very proud of how I have grown, matured, and adapted to my new situation.

In case you were curious, here is what I have been up to during the past year.


  • I have helped my mom continue to live a “normal” life.
    • This was my number one priority when I made the decision to move back home. I wanted to do everything I could to help her lead an active, engaging and interesting life.
  • As a result I have also taken some of the burden off of my dad to aid in that cause.


  • Although I was consistent about going to the gym while at Pitt, I have become more committed.
    • I have exercised and written down every workout over the past year.
  • In an effort to save time I have prepared my lunch for the work week every Sunday.
    • This has also helped me increase my savings and productivity (more about that here).
  • I have finally achieved a 1000lb total in the three main lifts of power-lifting (bench, squat, dead lift).


  • I have greatly improved my knowledge and ability with Adobe Illustrator.
    • I have also learned how to use Adobe Photoshop and InDesign.
  • I learned and now understand the fundamental concepts of HTML and CSS.
  • I finally learned JavaScript and jQuery.
  • I learned my first JavaScript framework AngularJS (more on that here).
  • Recently I have started learning Angular2.
  • I’ve also become well-versed in constructing HTML emails… 🙁
  • I have been fortunate enough to learn how to create a “scope” document for business ideas (this is what I have learned from that so far).


  • In February I found a nice company to start my young career.
  • Within a few months I earned a nice raise.
  • I have been tasked with developing a new product, which has confirmed by desire to develop my own product someday (more on what I’m learning here).
  • I have managed the technical aspects of our company’s largest account for over 10 months.
  • I have also had the amazing opportunity to interview and on-boarded new employees (side-note, building a great team is hard).


  • I started cold-emailing business about a “hiring” solution that I envision creating in the near future.
    • I actually spent a lot of time reading, writing and organizing my thoughts before I ever reached out to any companies. This was the first time I executed on an idea with patience and diligence. In the past I would simply think of something and immediately pursue it.
  • I read and took notes on The Four Steps to the Epiphany.
    • This book has greatly shaped the way I envision starting up my own business.
  • I have been fortunate to have saved enough money to potentially fund my own business.
  • I took legal steps to kill GymBro, the first company I started while in college.


  • I traveled to Pittsburgh to watch the Arizona Cardinals lose to the Pittsburgh Steelers.
  • I bought a car.
    • I never thought I would dislike driving, but doing it for two hours a day wears you down quickly.
  • I traveled to Montreal for my sisters graduation from Mcgill University.
    • I found a way to lose my passport in Toronto (it is kinda fun being stuck in Canada).
  • My picture was featured on (thanks dad).


  • I attended my first professional conference at NationJS.
  • I failed out of the community college calculus II course I enrolled in.
    • Sorry mom 🙁 Calculus simply isn’t my thing.
  • I applied and was not admitted to the University of Maryland school of Business.
    • This was a bummer and surprise at first. Everything happens for a reason.


  • I stayed relatively consistent and published 33 articles on this blog.
  • Somehow over 17,000 people visited this website over the past twelve months (thank you).
  • I became a “most viewed” writer on Quora, accumulating over 200,000 views on my answers.

I have been busy, and I love it.

I have written in the past about a three year “goal” plan.

I strive to make those goals a reality.

The Power of Habits: Forming a Morning Routine

Doing the same thing every day is boring. Getting in a “morning routine” exacerbates this boredom, but with good reason.

What makes routines so powerful? Why are habits so important for success? Do you really need to do the same thing everyday to achieve more?

Think about all the stress associated with deciding what to eat for breakfast. If you could avoid that, would you have a more productive day?


Routines are formed around habits. Habits are specific decisions that you make, which over time become automatic — you no longer decide to do something, it just happens.

Habits are triggered by “cues”, which form “routines” that ultimately deliver a reward.

With that in mind, think about how powerful a concise morning routine can be. One habit in your routine may be to eat the same oatmeal at 6:30am each morning. Your cue for that habit could be the fact that it is 6:30am. You automatically know it is time to eat because the clock says so, that is your cue.

A slight side note… Cues are interesting and important. Charles Duhigg, author of “The Power of Habit: Why We Do What We Do in Life and Business” explains in-depth how to determine what cues trigger your habits. Compelling stuff.

Routines are constructed of habits which are formed by cues. Ultimately, your routine produces some sort of reward.

In our breakfast example your reward could be the fact that you are sticking to your diet, or rather that you do not have to stress about what you are going to eat every morning.

My morning routine

Beyond breakfast, my morning routine has multiple components. I follow this routine for one main reason… to not think. By doing the same thing every morning I avoid stress and accomplish many little tasks before my day really starts. As a result I save my mental capacity for later in the day, when surprises and stress are more frequent.

This is a typical Monday – Friday morning for me.

  • Wake up at 4:15am
  • Eat a similar high protein breakfast at 4:20am
  • Bathroom break…
  • Leave for the gym at 4:50am
  • Arrive at the gym by 5:05am
  • Do my weight or aerobic training (I even have a routine for this)
  • Leave the gym at 6:15am
  • Listen to Mike and Mike until 6:30am
  • Shower and shave completed by 6:50am
  • Respond to emails and browse Hacker News until 7:10am
  • Eat a small snack, read the newspaper and leave for work by 7:30am

In the first three hours of my day I have already completed a ton of small tasks. I eat, I exercise, I read, and I relax.

By the time I leave for work at 7:30am I have accomplished more than I ever did in a whole day a few years ago. This is an amazing feeling.

The scary component of this is that it just happens. All of these habits that make up this routine simply just “occur”. I don’t question it, I embrace it.

What is the reward I get from this? Some people would argue that my routine is more punishment than privilege. I would strongly suggest it is the latter.

Aside from the mental reward I get from being productive in the morning, I get the luxury of not having to stress, not having to worry, and not having to be rushed. I leave my house everyday for work with a positive mindset.

It is on the days where my routine is interrupted that I find myself flustered, unable to concentrate and less productive.

Forming a routine

Routines can occur organically. You probably already have a few that just seem to “happen”. But, thanks to the research of people like Charles Duhigg there are a few techniques you can employ to help form your own strategic routines.

Duhigg, and other professionals suggest planning specific, measurable, reward-able, and track-able (SMART) habits. A relatively recent Washington Post article does a good job outlining how this process works.

In addition to planning SMART habits you can make your routine public information. Sharing with other people your plans reinforces the chance that you stick to them. With goal setting this is a common practice, the same can apply to routines.

James Clear also did a fantastic job outlining the time it takes to form a new habit. I would suggest reading his article to further understand why it takes up to two months for habits to become automatic.

There are plenty of other resources on line that dive deeper into habit-forming. A 2012 Chicago Tribune article helped me understand that my morning routine (albeit strange) is actually a “blessing”. And, a 2009 study published in the European Journal of Social Psychology (this study is referenced in the James Clear article) helped me better understand how long it takes for routines to become automatic.

Routines are boring, but their benefits far outweigh the taste of eating the same thing for breakfast five days a week.

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Take This Idea: Gig Economy Retirement Benefits

Uber has over 327,000 active drivers. That is a ton of people.

If you consider those 327,000 people to be employees (which they are not) you would be looking at a company comparable in size to General Electric, the Home Depot, and UPS.

Obviously Uber is humongous regardless of how their drivers are categorized. What makes Uber and other “gig economy” companies compelling is that their workforce’s are entirely comprised of independent contractors. Uber, Handy, Postmates and others have found hundreds of thousands of able and willing individuals to contract for them. That is amazing.

The trade-offs that come from contract labor are under reported. Making money from Uber has its perks, but you can’t seriously consider making a career out of it, can you?

Investors seem to think differently. Venture capital has flooded the “gig economy” scene, and startup companies have billion dollar bets riding on them. Uber is a fundamental social service, but lacks legitimacy at a valuation of $50 billion.

What is holding Uber and other similar companies back?

Financial security.

Job seekers want three things from a potential career.

  1. A good salary and benefits
  2. A certain level of freedom and authority
  3. A guarantee that there job will be there every single day

Uber does a fantastic job providing two of the three. Drivers have a great sense of authority – they choose the hours they work. Drivers also know that when they wake up on any given day they will be able to turn on their Uber app and start making money. In this sense, Uber has greatly empowered its contractors.

Yet, Uber falls short on the most important career consideration – salary and benefits. Do you think Uber’s corporate employees get paid hourly? Do you think corporate employees have no retirement benefits? No, and no. So how can Uber provide this to contractors without being forced to call them “employees”?

They can’t, and that creates a problem.

Third Party Retirement Benefits

Uber will never be able to pay their drivers salaries. If they did, they would no longer be independent contractors, and if drivers are no longer contractors then the whole gig economy comes to an abrupt end.

Uber will also never be able to provide 401k retirement opportunities to their drivers. Again, if they did drivers would become employees, and, just like above, that would really mess things up.

But, in order for Uber to gain legitimacy they will need to provide some services to help make up for the fact that they legally cannot provide these benefits to their contractors. Either that, or the federal government  will create a new type of employment status. The latter option seems unlikely.

How can an independent third party company come in and save the day? By simply reapplying the fundamentals of insurance companies. Bare with me here.

Insurance companies collect premiums from their members. From these premiums insurance companies make money in one of two ways.

  1. Underwriting income: the difference between premiums collected on insurance policies by the insurer, and expenses incurred and claims paid out
  2. Investment income: interest payments, dividends, capital gains collected upon the sale of a security or other assets, and any other profit that is made through an investment vehicle of any kind

Insurance companies tend to actually lose money on underwriting and generate their profits from investment income. Take a look at publicly traded insurance companies stock prices. When the market crashed in 2008 insurance companies were hit especially hard. Look at historical stock price charts to see what I mean.

The principle here is that a company (in this case an insurer) collects a large amount of cash up-front and has a long time horizon to pay it back. In the mean-time, that company can generate investment income that offsets expenses.

A similar company could do the same thing to help alleviate the strain currently being felt in the sharing economy.

Imagine a company, let’s call it S Capital.

S Capital provides retirement matching for independent contractors. For every dollar an independent contractor puts in their individual retirement account, S Capital will match it up to 3%.

S Capital only offers their matching service for contractors who’s parent company has partnered with S Capital. S Capital receives annual premiums from companies like Uber, Handy, and Postmates to provide this service to their contracting workforce.

S Capital will generate revenue by investing premiums from parent companies, and also investing on behalf of the independent contractor. A vesting schedule will be in place for contractors to retain their matched contributions, and S Capital will have multiple years to generate income from every dollar it brings in.

After the vesting schedule has completed the contractor can access their matched funds. The contractor get’s to enjoy the benefits of compounding interest, and S Capital makes a profit from generating more income from investing the initial premium. Everyone wins.

I have written about this idea before. I actually submitted a similar idea for Ycombinator Fellowship. and posted my application on my blog.

I don’t have the knowledge or experience to take on a problem as large as this one, that is why I am sharing it here. I really do think 3-5 years from now there will be a company that is doing something very similar to this. It seems almost inevitable.

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