Donating to your favorite nonprofits just got easier—and free.

Proseeds is a seamless way for people to support their favorite local nonprofit organizations by simply visiting participating Proseeds merchants.

Upon signing up, consumers choose one or more of their favorite nonprofits they wish to support and link an existing credit or debit card to their Proseeds account. Whenever the consumer visits a participating merchant and pays with a linked card, that merchant automatically donates 5 percent of the consumer’s purchase to the chosen nonprofits without costing the consumer anything extra.

Omaha-based Proseeds profits off a percentage on top of the 5 percent (that merchants give to Proseeds), guaranteeing that the 5 percent of the consumer sale will always be donated to the participating nonprofit of the consumer’s choice, unlike competing platforms similar to Proseeds.

“It’s really important for us that consumers know that with our model when we say 5 percent of each sale goes to their chosen nonprofit, we mean it,” said Jared Bakewell, co-founder of Proseeds. “There’s no processing or transaction fees that interferes with consumers generating funds for their causes.”

There are currently over 200 local nonprofits using the platform including Millard Public Schools, Big Brothers Big Sisters, Hear Nebraska, Youth Emergency Services (YES) and Habitat for Humanity. The platform has already raised thousands of dollars for the nonprofits, and is also free for nonprofit organizations to participate.

“If they’re a nonprofit in Omaha, chances are they are on the platform, or they’re on their way to participating,” said Bakewell.

After incorporating in January of this year and launching on May 3rd, the company has experienced a rapid growth of users, participating merchants and nonprofit organizations. Over 100 merchant locations are currently participating on the platform including Voodoo Taco, J. Coco, Sam & Louie’s Pizza and Dave & Buster’s.

“We’ve really tried to focus on a good mix of popular local favorites,” said Bakewell. “But we also have participation from franchisees like Gandolfo’s and Goodcents Deli Fresh Subs.”

How Proseeds started

Bakewell and some members of the team have been in a similar industry for over 12 years. Starting out as the owner of the Saving Sidekick coupon book, Bakewell had already formed a solid network of local merchants.

“I’ve been thinking about applying innovation to the coupon book space for a long time,” said Bakewell.

Backed with a computer science and business degree, Bakewell thought that if anyone could make a coupon book into an app, it would be him.

“It turns out there’s a lot of reasons why that’s not a super sustainable model,” said Bakewell. “Through the exploration of that process is how Proseeds became a thing.”

Bakewell said that while running a coupon book business was a good way to make a living, he always saw himself doing something bigger.

“My passion has always been trying to apply innovation and technology to helping nonprofit organizations,” said Bakewell. “Potentially, Proseeds could make it so nonprofits never had to worry about fundraising.”

But it wasn’t until assembling the founding team of Josh Kelley and Gio Barahona that the idea really took off. Bakewell credits Barahona with building the technology to make it work and Kelley with much of the marketing strategy, including the company name. Since then, the team has grown to five, including Erik Hoffman and Jodi Duckert.

Supporting the community while driving sales

Bakewell explained that Proseeds allows participating merchants to support local nonprofits, while differentiating themselves from their competition and driving sales. He said that the team is really trying to tap into the passion people have for supporting their favorite nonprofit organizations while driving loyalty to participating merchants.

“Consumers that are using Proseeds are actively choosing to go to a participating merchants over another business because the merchant is supporting causes that are important to the consumer,” said Bakewell.

With Proseeds, every consumer, merchant and nonprofit has an account that they can log onto to check their activity. The merchant accounts include up-to-date information on how many sales were driven by Proseeds, and the amount that the business is donating, as transactions are processed.

“The platform really shows companies that we are driving sales to their business by their participation,” said Bakewell. “This process has never been so measurable and automated before.”

Redefining classic fundraisers

Bakewell explained that the closest equivalent to Proseeds would be something like a dine-out night to support a local school.

“That model limits donations in many ways,” said Bakewell. “It’s usually limited to one restaurant, one location, one nonprofit organization during one time frame, and participants of this model also are required to identify themselves at the point of sale which causes havoc for cashiers.”

Proseeds allows users to easily pick from a wide range of participating merchants while supporting a big, customizable mix of nonprofits at any time.

“The special thing about it is that we’ve removed the friction for the consumer and for the participating merchant,” said Bakewell. “Once consumers have linked their card to their Proseeds account, the transaction happens automatically.”

Gamifying the donation process

Every user who participates in the program is automatically synced to their choice of nonprofit’s leaderboard. Currently the leaderboard is ranked by how much money each consumer has collectively raised for each cause.

“The goal is to be the top Proseeder of a cause,” said Bakewell. “It’s also an additional driver for consumers to go out and choose to give their business to a participating merchant over one that isn’t.”

Bakewell said that the Proseeds team is currently interfacing with participating nonprofits to make it so that consumers are rewarded for being a top Proseeder.

“Perhaps the top Proseeder gets a seat at the head table of the nonprofit’s annual banquet, or gets a behind the scenes tour of the nonprofit’s facility,” said Bakewell. “It’s things that don’t cost the nonprofit organization a lot of money, but still holds value for the consumer.”

Bakewell said that it’s been fun to see consumers embrace the competition of the platform, but these ideas are just the tip of the iceberg for the Proseeds team.

“There’s just so much that Proseeds will be that we’re in the process of building right now, so it’s cool to see that people are embracing what we have released because there’s so much more coming,” said Bakewell. “Potentially Proseeds can move into the direction where we’re the social network of good in the world.”

Bakewell added that there is currently no way for the consumer to add additional money to their direct donations besides spending money at the participating merchants.

“It’s not part of our platform right now, but it might be in the future,” said Bakewell. “Right now we are really focused on donations as a byproduct of commerce.”

Finding merchants

Bakewell said that getting merchants to participate hasn’t been a huge challenge. However, finding the right person to talk to can take some time, especially with larger businesses.

“It’s easier to find the right person to talk to with local businesses; but once we’ve been able to reach the right person at a larger organization it’s really clicked with them because they’ve never seen anything quite like this before,” said Bakewell.

Bakewell added that very recently the team has started receiving inquiries from merchants to join the program.

“I’m not going to say that every business we’ve pitched to has agreed to become a participating merchant,” said Bakewell. “But the ones who do it are really embracing it. To date, we haven’t had one merchant leave the platform.”

Waiting on technology

Bakewell explained that the component where a business can interface with a card link and the payment networks to get access to the transaction component is relatively new. It’s called card-linked marketing, a process that closes the loop between online advertising and offline transactions.

“It’s a way for you to take an offer, loyalty program, or some marketing idea that is advertised online and close that loop to an offline transaction,” said Bakewell. “Typically, a consumer would have to cut a coupon out or use a punch card. Now with card-linked marketing, marketers can link that idea to a credit or debit card automatically.”

A number of years in the making, Proseeds started working with companies like First Data and CardSpring (a company acquired by Twitter) when they first started rolling out the idea for the platform.

“The process was a lot slower than I would have liked it to be. We’re talking about years where we were ready to go with the idea but the technology just wasn’t available yet,” said Bakewell.

Bakewell said that Visa is currently one of the biggest companies trying to pioneer the space, and they have made their platform available for select publishers to tap into every Visa transaction automatically, rather than select merchants.

“We’ve been waiting for the technology to catch up to our idea, which took a lot of patience,” said Bakewell. “We were sitting on our idea and building the rest of the model while waiting for that technology to become a reality.”

Bakewell added that they are on the bleeding edge of where card-linked marketing meets cause-based loyalty programs.

“The timing is really great for us, and I feel like we are uniquely positioned to take advantage of the opportunity because we’ve been in this space for a long time,” said Bakewell.

Connecting with the philanthropic and investment community

Bakewell added that launching the business in Omaha has been special because he believes the people are generally generous and understand the idea behind Proseeds.

“It’s a good place to test what you could call our MVP,” said Bakewell.

Bakewell added that the team has connected with a lot of people that are helping them to grow the platform on a nationwide scale.

“I have a network of people in the fundraising industry around the country, and several of them expressed interest in bringing Proseeds to their market before we even launched to the public,” said Bakewell.

Bakewell said that growing Proseeds nationwide will take more money than his personal financial resources.

“We’ve already had some pretty substantial interest from venture capital in Omaha and from outside of the state,” said Bakewell.

Data collection and privacy issues

Bakewell explained that looking at the data that the platform generates is really interesting, but there are also a lot of privacy issues that go into card-linked marketing.

“It’s important for the consumer to know that their data is secure with us,” said Bakewell. “Any of the data that supplied to the companies or the nonprofits is either aggregated and anonymized or not shown at all to anyone.”

Bakewell said that Proseeds does provide zip codes to the participating merchants, but is not currently giving out data such as specific demographics.

“We’re kind of waiting to see what people really want, rather than putting everything out there,” said Bakewell. “We’re really looking at what the most valuable information is for the companies and nonprofits, and then we’ll figure out ways to responsibly display that information.”

Bakewell added that you can participate in Proseeds anonymously.

“Selling that data and monetizing it really isn’t part of our model because there’s already revenue generation built into Proseeds,” said Bakewell. “From the first day we launched to the public we were generating revenue.”

What’s next for Proseeds

While Proseeds is moving towards validation of their model, their mission goes beyond Omaha and even the United States.

“We started working on ideas for that expansion even before we launched in Omaha,” said Bakewell. “I believe that relatively soon we’ll be moving into other markets.”

Bakewell explained that there is a virality to the mechanism behind Proseeds. Bakewell believes that after seeing how much business is driven by Proseeds, other businesses will start signing up, and in turn, all of those businesses that have owners who sit on the boards of nonprofit organizations will start signing up their nonprofits, as well as all the employees that work for the nonprofits.

“The desire to support nonprofits is a universal thing,” said Bakewell. “It’s kind of a snowball effect, and we’re seeing it start to roll right now.”

Bakewell added that he hopes that Proseeds encourages consumers to interact with nonprofits in other ways, like volunteering, once they’ve established a donor relationship with the nonprofits.

“It’s a way for nonprofits to interact with advocates of their cause without asking for a direct donation,” said Bakewell.

Bakewell said that overall, Proseeds is on a mission to change the way nonprofits are funded.

“Imagine if a percentage of all commerce went to benefit good in the world,” said Bakewell. “It’s cliche to say that as a startup we could change the world, but Proseeds can change the world by helping fund the organizations that are doing the most good in the world.”

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Mel Lucks is a regional freelance journalist and former intern for Silicon Prairie News and AIM.