Donatekart gives us a glimpse of how charity can be made more ‘meaningful’
Donatekart does not want donations in cash. It has devised a novel approach to the concept of giving by approaching it as a marketplace.
For instance, many times the items donated are either not among the required items or are already in abundance, which then defeats the entire purpose. Many NGOs use part of the monetary contributions, meant only for charity, for various other commercial purposes. This means many potential donors would often be often be skeptical if their contributions will be used efficiently. In a bid to bring transparency in this, two NIT Nagpur graduates, Anil Reddy and Sandeep Sharma, both 24, formed Donatekart, an organisation that lets NGOs present their actual needs and also enables donors to track their donations.
Reddy and Sharma’s charity acts date back to their college, where they were part of a club called Prayas which was involved in various philanthropic acts, collaborating with many NGOs. During 2015 Chennai floods, Reddy volunteered with an NGO, Goonj, to help in sending relief items to victims. There he noticed that while many well-wishers generously sent water, food, clothing, and donated blood in large amounts, they, however, did not send the desperately required items such as bleaching powder, blankets, and mosquito nets. Reason? Lack of awareness about the ‘specific needs’.
Further, people were ordering clothes and food from Flipkart and Amazon and getting them delivered to the site. “There was a mismatch of what people were giving and was what needed,” Reddy told ET, adding how this mismatch planted an idea in Reddy’s head and he started Donatekart with Sharma in 2016.
The much-needed bridge
The startup’s website works like an e-commerce crowdsourcing platform that acts as a bridge between the NGOs and the donors. “We allow NGOs run their campaigns on the website for around 35-40 days during which they present their specific needs, which can be anything from 200 jeans to 100 tarpaulins. Under this timeline, the NGOs publicize their campaign on social media, emails, to attract potential donors,” says Reddy.
On the website, the donors can see the NGOs’ campaigns and details such as how many people have donated to any campaign, how much has already been donated, how much more required. The details are updated and donors can extend money to Donatekart, which in turn sources the required items through reverse bidding drive from several vendors across the country. In this, Donatekart is the only buyer and with multiple vendors in the line, vendors bid their prices and the startup buys the supplies at the cheapest rate possible.
These vendors usually include manufacturers of school bags, groceries, animal food, among others. Thereafter, the vendor directly transports the items to the respective NGOs. While Donatekart do not charge the NGOs any money to campaign on their website, it earns the revenue by charging a 10-15% commission from the money the vendors make. As their orders are mostly in bulk, the sellers are content giving up a small portion of their revenue.
Offering more visibility, the website allows donors to easily monitor the transit and ensure that their money reached the right hands. People can donate from Rs 3 to Rs 3 lakh. With over 3 million NGOs in the country who most often find it difficult to register donations, Donatekart offers a strategically worked-out trustworthy service. “The donors also get to experience the joy of giving as they receive pictures and videos of the supplies, bought through their monetary contributions, being handed over to the ones that need it,” says Reddy.
DonateKart works with a cross-section of NGOs, from the ones helping lower income people and orphaned children, to NGOs working for animal welfare, women empowerment, health and old-age shelter homes. The major categories include education, natural disasters, and animal welfare and majority of donations go to Tier 1 cities like Mumbai, Hyderabad, and Delhi.
“We have seen that 40-50% of the amount donated in various charitable organisations goes in the marketing operations and only the remaining 50-60% is efficiently used. But, Donatekart does not pluck out any percentage of the amount donated for social media advertising or marketing and the money goes straight to where it’s needed the most,” says Reddy.
Before listing the NGOs’ campaigns, the startup vets the NGOs. From thoroughly checking their yearly financial to their previous successful campaigns, Donatekart leaves no stone unturned. For the recently-formed small NGOs, Reddy said they have to first drive some successful campaigns on their own. Once Donatekart is convinced with their performance considering the number of donors they received and whether they sent their donors updates or not, the firm will push their campaign on its website.
Till date, the startup has raised funds amounting to more than Rs 6 crore acquiring over 32,000 donors and working with more than 450 NGOs. Notably, 35-40% of the donors are from abroad and the US takes the majority cake here. Reddy added that they get donors from 25 countries and they accept donations in multiple currencies, including dollars, euros, and dinar.
One of the biggest and commendable projects of the firm include its service during the devastating Kerala floods last year. Soon after hearing the news, its team sprung into action and worked alongside 20 different NGOs and kept sending relief materials round the clock. According to Reddy, the most inspiring thing in the whole operation was how people from across the country joined hands without thinking twice.
“We were really touched by how people from all walks of life came together for this cause?- doctors, poets, artists… you name it. Everyone wanted to help in some way,” Reddy said, adding that more than Rs 2 crore worth relief material was donated from across the world to around 50,000 families in Kerala in a span of just seven days.
However, Like every other startup, Donatekart had its fair share of obstacles. One of the major challenges was to convince people to donate to them. Reddy explained that as they are fairly new in the industry, people are more willing to donate to an NGO than to a crowdsourcing platform. “People find it easier to donate money to a known NGO despite knowing that 50% of the contributions will be spent on operational expenses. So changing from ‘giving in cash’ to ‘giving in kind’ is the key challenge here,” Sharma said.
In addition to this, the startup faces the constant challenge of convincing people to continuously keep giving. “A lot of people tend to donate only during disasters or natural calamities and are not willing to do so otherwise,” he says.
The nearly three-year-old firm which started as a bootstrapped establishment, has raised over $360,000 from a clutch of angel investors led by LetsVenture in its seed funding. Some of the investors who participated in the round include MS Unnikrishnan, managing director and chief executive officer of Thermax, Pravin Gandhi, founding partner of Seedfund and Pradeep Nair, regional director of Ford Foundation.
Also, LetsVenture’s founder Shanti Mohan joined the board of Donatekart recently. According to Mohan, it was the startup’s concept and its dedicated team, which attracted her to join the board. “It takes away the donor’s concern of whether the money is going to the right cause or not. Donatekart has solved the donor’s trust issues.”
The startup’s exemplary efforts didn’t go unnoticed. This year, the Donatekart team received an invitation from the prestigious Bill and Melinda Gates Foundation to be part of the Greater Giving Summit. Notably, 180 leaders from across the world were invited to the summit to promote greater giving among individuals.
The firm is now looking to invest a lot in technology, scale its team and launch new products like religious giving, CSR giving, employee giving, etc. Reddy said, “We have plans to expand to other geographies such as the US and UK and raise at least Rs 100 crore in donations in the next three years.”