Jackpot Rewards: An Online “Economic Engine for the Common Good”
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marketing mechanisms in the world. So we took what we thought would be these two very compelling offers for consumers and pursued them on a new scale.”
To get the program off the ground, Jackpot Rewards has raised $16.7 million in Series A financing from a group of individual investors including Lynch, Connors, Chuck Clough (the CEO of Boston’s Clough Capital Partners and a former Merrill Lynch global investment strategist), and Tom McDonnell (the CEO of Kansas City, MO-based DST Systems).
“I do think we ended up with a particular type of investor,” says Miller. “Imagine going out to raise money and telling investors that you are going to give half of it away. You have to find an investor who is passionate about giving—and we’ve attracted people whose business acumen is only exceeded by their generosity.”
Indeed, Lynch, who is famous for driving the Fidelity Magellan mutual fund to unheard-of returns in the 1980s and 1990s, has long had a charitable foundation (worth a reported $74 million as of 2003) that funds Boston-area religious, educational, and recreational projects from Catholic-school scholarships to skateboarding parks. Miller says that when he went courting Lynch and the other investors, “To a man, their first question was ‘How can I help you?’ rather than ‘What’s in it for me?’ They’ve all made it in life, and they are all passionate about giving back.”
It was Lynch, in fact, who spearheaded the planning process four years ago that led to the company’s creation, Miller says. “Peter got leaders in the business community together to look for new and innovative ways to raise money for charities,” Miller recounts. “We had all these people around the table with incredible business acumen, but we all found it incredibly difficult to raise money, so I said, ‘Why don’t we built a company where 50 percent of the profit goes to charity.’ That was interesting to them.”
But while the company’s giving—to be conducted through a separate, non-profit organization called the Jackpot Rewards Charitable Foundation—was always the keystone of the business plan, its most visible activity, the sweepstakes, isn’t just a marketing ploy. That, too, reflects the core philosophy of the founders and funders, Miller says.
The sweepstakes idea “grew in many ways out of the transformational experiences we had as young people, and how those inspired us,” he says. “Winning a million dollars would change just about everyone’s lives. It would allow you to pay off the mortgage, get completely out of debt, save money for the kids’ college, and set aside money for retirement—basically, to achieve the American dream. But what would you do with $100 million? That’s a very different question. Most people move very quickly from ‘How can I change my life?’ to ‘How can I change the world?’ We want to create an environment where people are thinking about those big dreams.”
“Dream Big,” in fact, is the Jackpot Rewards tag line. And it would be easy enough to write that off as advertising hokum, except for the programs Jackpot Rewards has created to encourage sweepstakes winners to become philanthropists in their own right. Members are allowed to create “Jackpot Groups” that split the jackpot equally if any member has the winning numbers for the progressive $100 million-plus jackpot or the weekly $1 million jackpot. If a jackpot group designates itself a Charity Group, Jackpot Rewards will give 50 percent of any jackpot that group wins to … Next Page »