Benefit App Aims to Help Schools Make Fundraising “Frictionless”

2/10/14Follow @XconomyDET

Benefit, a startup based in Grand Rapids, MI, has created technology to disrupt a traditional method of school fundraising. With the SCRIP method, schools buy discounted gift cards and then sell them at a markup to parents, with the difference going toward the school. SCRIP does away with the old, cumbersome door-to-door pizza kit and chocolate sales, but Benefit’s CEO, Derik Lolli, still saw room for improvement.

“We’re doing something very similar, except we’ve removed the need to physically pick up and carry the gift cards,” Lolli says. “When you download the Benefit app and shop at one of our partner retailers, it allows you to purchase a gift card at the register in a matter of seconds. We like to call it frictionless fundraising.”

Users go to Benefit’s website, create their fundraising campaign, including a start date and monetary goal, and then invite other users to participate to support the school. The invitations contain a link to the free Benefit app. (Benefit also can be used by nonprofits.)

After parents download the app and select their method of payment, they select their school of choice and are given access to the list of participating retailers. So far, Benefit has teamed up with Amazon, Gap, Banana Republic, American Eagle, Papa Johns, CVS, Foot Locker, and others. Benefit makes its money by taking a percentage of each transaction.

SCRIP fundraising is big business; Lolli says it’s currently estimated to be a $9 billion market. Lots of schools use SCRIP, but Lolli says they often don’t like it because the process of ordering gift cards is time-consuming. “We built this to be a painkiller for that process,” Lolli says.

Lolli started the company in 2012. He’s got a background in mobile technology and design. One day, his son came home from school with an invitation to participate in SCRIP. “I said, there’s got to be a better way to do this,” Lolli adds, and he got to work building the app. He’s now spearheading Benefit full-time along with two partners.

Benefit is contemplating raising a large financing round, but the startup has already scored an impressive number of investments from Rick DeVos’ Start Garden pitch contests; so far, Start Garden has invested $130,000 in Benefit.

For the past six months, Benefit has beta-tested its platform with Holland Christian and Grand Rapids Christian schools, Lolli says. Now, the company is ready to roll out Benefit statewide at first, and nationwide one day if it continues to perform well.

“We wanted to make sure we were ready before we scaled,” Lolli explains. “The work for us is not getting parents to sign up, it’s building a good connection with the schools. We want it to be worth it to schools. If they spread the word, we’ll have mass transactions.”

Sarah Schmid is the editor of Xconomy Detroit. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET

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  • Bobbie

    Any idea when a droid app will be released?