Dwolla Helps Encast Create A Greater Impact
Encast offers a fee-free platform for nonprofit donations, thanks to an integration with Dwolla and the ACH Network.
What started as a passion project morphed into a full-fledged company to boost philanthropy in the workplace.
Leo Ramirez Jr. was a cofounder of the nonprofit organization MiniDonations in 2008 that allowed people to round up purchases at the point of sale and donate the difference to charity. For the six years that MiniDonations operated, Leo estimates he put nearly 13,000 hours of work into his passion project.
Then in November of 2014, Leo left his full-time job at Oracle to cofound Encast, a cloud-based system to make it easier for employers to offer their employees a way to donate.
Using Encast, employees are able to set aside money in each paycheck to donate to a nonprofit, the same way they may set up an automatic contribution to their 401(k). With more than 1.8 million nonprofit organizations within the Encast database, Leo wants to connect people through their values and philanthropic activity, without charging transaction fees to the organizations.
He says more than $400 billion is given to nonprofit organizations each year but $4 billion of that—or roughly 1%—never makes it to the intended organization. Instead, the funds go to credit card companies, merchant services or donation platforms in the form of transaction fees.
Losing 1% of a donation may not sound like much, but the $4 billion meant for nonprofit organizations in 2017 was enough to cover the combined operating expenses of the United Way, the Salvation Army, St. Jude’s Research Hospital and the Metropolitan Opera—with more than $2 billion to spare.
“I believe it’s wrong that, when someone makes a donation to a nonprofit, money is taken away from the nonprofit’s pockets,” Leo says. “Luckily, Dwolla has this fee-free mechanism on the transaction side that allows us to meet our promise of never charging transaction fees to nonprofits.”
Becoming a ‘Purple Cow’ for Nonprofit Donations
Leo wanted to find a way to make Encast profitable, versus his time at the nonprofit organization where his focus was solely on getting donations. His mission remains the same and he hopes this leads to creating a stronger social sector and to forging more genuine human bonds.
Before he could achieve that mission, he needed a better way to track donations.
Prior to using Dwolla, Leo would have to manually deposit the donations each company would send Encast that were deducted from their payroll.
“It was a lot of manual work,” Leo says. “The spreadsheet-based approach of keeping track of all our clients, employees and payroll deductions was a mess. It was stressful knowing that mistakes through manual processes were a possibility, so we needed something better that could eliminate human error.”
Leo says he considered building his own payment solution along with integrating with Stripe and PayPal, but chose Dwolla for Encast because of the fee-free transaction plan.
“When I started this, I told my team we will never charge a transaction fee,” Leo says. “I want to be unique and be like Seth Godin’s ‘Purple Cow’ and this is one of the ways we are going to do that.”
After integrating with Dwolla—and releasing the second version of Encast in February of 2017—each user is now able to choose how much they want deducted from each paycheck. Donation deductions are transferred, via the Dwolla Platform, from a company’s bank account and made available on Encast for each user via notifications.
Then, each employee is able to direct where they want that money to go and how much each nonprofit organization receives.
Encast has aggregated more than 1.8 million organizations in its database from which each user can create a portfolio of all the causes that matter to them.
“Dwolla reduced stress and increased accuracy substantially. We’ve had no errors whatsoever in tracking donations since integrating with Dwolla. Dwolla helps me honestly say that anything that was given, was given away.”
Integrating with Dwolla
After looking at Dwolla’s API, the various features within the Dwolla Platform—and the cost projections— Encast determined Dwolla was the payment solution to help them achieve their mission.
“It became really clear that working with Dwolla was going to be the best fit in accordance with our mission,” Leo says. “Now, I’m very much a fan because of our ease of implementation and how cost effective Dwolla is. This will be a great partnership as we grow and find new innovative ways for our platform to scale.”
Leo says as the number of monthly transactions increase, the Dwolla dashboard becomes more and more valuable as a place to find transaction analytics and insights for each user and organization.
“It’s just nice to know that when everything is in place with this integration that everything just kind of happens behind the scenes,” Leo says. “There is no friction whatsoever with Dwolla since we deployed.”
To make it easier for new businesses to sign up, Leo said adding micro-deposit capabilities will offer a self-service mechanism for onboarding clients, a feature that Dwolla offers and Encast doesn’t currently use.
“I want to make Encast the easiest to deploy and maintain employee engagement solution in the market, that just so happens to boost social consciousness in the world,” Leo said. “Dwolla plays an important role with us being able to say with no reservations that we are a transaction-fee-free platform for nonprofits.”
I want to make Encast the easiest to deploy and maintain employee engagement solution in the market, that just so happens to boost social consciousness in the world. Dwolla plays an important role with us being able to say with no reservations that we are a transaction-fee-free platform for nonprofits.