Start-Up Rally Wants Your Cause to Raise Money Online, Even if Justin Bieber Isn’t Tweeting About It

Published on July 15, 2011
by Drake Martinet

There’s an old maxim in fundraising: It’s better to get one dollar from 100 supporters than it is to get $100 from one supporter. Or you can just get Justin Bieber to tweet about you.

Assuming you can’t trap yourself a Bieber, a new online fundraising start-up called Rally is available to take advantage of the network effects of your real supporters.

Rally CEO Tom Seres was quick to point out that social online fundraising isn’t new, but says that “most organizations see the Red Cross’ success and think that putting a Twitter button on their site will make them more money.”

According to Seres, they are wrong.

“The reality is, those few campaigns that succeed in social do so because of huge networks,” he said. “[But] not everyone … has Will Smith tweeting about their fundraising.”

Rally’s recent growth got it a chunk of funding from a prominent string of investors, including Mike Maples, Reid Hoffman and Ron Conway. Seres would only describe it as a “fairly large seed round.”

The cash is being spent on turning an existing white-label product called Piryx, built by Seres and his co-founders, into the more consumer-focused Rally, which is both the name of the new platform and the pivoted company.

Why the consumer focus?

The most significant way Rally’s model differs from other fundraising sites such as Kickstarter, Seres said, is that Rally is the payment processor as well as the fundraising platform. Kickstarter farms its payments out to Amazon.

The four percent Rally charges on most transactions — which covers the credit card fees, as well as Rally’s profits — leaves a pretty slim margin. Therefore, massive profitability for Rally will only come at massive scale.

The reborn Rally’s main focus is to make online fundraising “more social” — or more annoying, depending on your take.

Its platform allows for two layers of supporters, Seres said: “One who just wants to donate … and another who can actually start [his or her] own fundraiser associated with an existing Rally campaign.”

This model isn’t new for fundraising, and Seres said it has been successful for events such as walks for charity, partially because “People respond better to requests from people they know. It is about leveraging that closer network connection.”

Just as interesting as Rally’s “better mousetrap” model for the online fundraising space is the type of data it will gather about what works with donors online.

If it can reach scale, Seres said, Rally would “be able to tell fundraisers what the value of a piece of content they post is, and on the larger scale, what people actually care about online and what makes them act.”

Here is a video interview of Seres talking about all that and more:

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