Interview With Love Drop Co-Founder J. Money

by Ashley Jacobs on 5 February 2011 17 comments
Photo: Ellie

Recently, J. Money over at Budgets Are Sexy reached out to us to let us know about a new project he and Nate St. Pierre started called Love Drop—a new micro-giving network designed to help one family per month.

Check out Nate's video on the inspiring premise of Love Drop and our interview with J. Money below.

Wise Bread: Tell us how Love Drop works.

J. Money: It's nice and simple. Every month our members come together and "drop" some financial love on a family who really needs our help. Some give $5.00, and others $1.00 - but it's the whole idea that if hundreds of people did it all at the same time, we could directly affect a person's life in a major way! (Think Home Extreme Makeover, only not with homes... yet.)

The money is just part of it. We don't show up on their doorstep and just give them a pile of cash - we learn all about these families and share their stories of positivity and generosity online despite their current situation. As these video episodes and stories are released every week, our Love Droppers are behind the scenes raising other goods and services to support these families even more. And that's what this whole project is really about - community. People coming together to give back and make a difference in a super easy way.

How did you come up with the idea of Love Drop?

We (myself and Nate St. Pierre) both came up with this idea a long time ago before even meeting each other! Nate was already leading a team of people giving time in small increments every week and I was blogging all day long about personal finances. When we were introduced, it was the perfect combination of skills and interests to finally get this puppy started. The organization has been constantly evolving ever since, but our main goals of providing a fun and unique way to give back is still the cornerstone of what we're doing here. And one of our favorite parts is the fact that everyone can DIRECTLY see where their support is going each month! Within four weeks (max) you get to watch your money or clothes or tax services/etc go right into the hands of the family we're currently helping. You literally see us presenting these gifts right there at their home. We put it all online, and then we start all over again the next day. It's awesome.

Tell us about yourself and your cofounder, Nate.

I (J. Money) have been blogging at my site BudgetsAreSexy.com for almost 3 years now. It started as a place for me to ramble on about money and how I was saving (and spending!) a lot here and there, but now I like to think of it as a place where we as a community start up conversations based around a certain topic every day. A lot of people aren't comfortable talking about money in "real life," so it's nice to have places like this where we can share our ideas and solutions freely without worrying about Uncle Joe jumping down our throat. Exactly like how it is here at Wise Bread.

Our co-founder Nate St. Pierre is the man behind ItStartsWith.US and DropALoveBomb.com, where he organizes thousands of people to give back a few minutes of their time every week. At It Starts With Us he gives out a 15-minute mission to all his teammates asking them to do 1 small thing for their neighbor or friend, or even stranger, and with his Love Bomb crew he and his partner, Lauren Lankford, get hundreds of people to drop a comment of support and encouragement on a blogger who's really going through some tough times in their lives. It's all about giving back with Nate, and he's a damn good inspiration.

Besides you and Nate, who else is on the team? Who is doing the day-to-day work?

HAH! You're pretty much looking at it. Well actually, let me rephrase. Nate and I manage the day-to-day operations and management/marketing/organizing/community building/etc aspects of our company, but then we have the brilliant Hildebrand Creative who produce and shoot our video series. It's the four of us who pretty much power this thing forward. We're not gonna lie - it's a LOT of work. Nate and I literally spend 10 hours a day making sure everything's on track, 7 days a week, and there's always more to do by the end of it. But as all small business owners know, there's nothing better than being emersed in your own projects and doing everything from top to bottom. We've made Love Drop our full-time gigs right now and we are beyond excited to continue watching it grow!

How does one apply to become the next LoveDrop recipient? What are the qualifications? What is the selection process like?

You can't necessarily apply to become a Love Drop recipient, but you can nominate someone you think could really benefit from our community's support. Only members have the ability to do this and there are a lot of variables for us to review each month. Believe me, it's heart wrenching trying to select just ONE out of dozens of people needing our help! One of the most important factors we look for is their general outlook on life. We want to help those who are positive and genuinely trying to give back despite their troubled situation. We're not about swooping in and paying things off just for the heck of it - we want to find those families who have the greatest hearts in the world and just need a little push to get back on their feet and continue improving their surroundings. One of the most surprising (and difficult) things we've actually found so far, is making these chosen recipients ACCEPT our gifts! The first thing they want to do is give it to someone who "needs it more than them," and it's exactly that spirit that makes us proud to come together for them.

According to your website, the donations break down as follows: 50% to the recipient, 20% to taxes, and 30% to running Love Drop. Can you tell us a little bit about how the 30% is spent?

Yup, but first let me clarify that none of this money is considered a "donation." We're not a 501(c)3 - which I'll explain more in a bit - and you can't take any tax write offs from it. Love Drop is more of a "membership" type site where people basically pay what they want. Whether you have $1 or $1,000 to spare, all members get the same access to our community platform and they can come and go as they please.

Now back to your 30% question. You are correct - this portion of the membership money goes directly to our operating budget. Just like with other small businesses, this money covers production expenses, legal services, accounting services, marketing, travel, salaries, web design, hosting, etc. As you can imagine, 30% doesn't come close to covering it. This is where our corporate sponsors come in each month and really help us out. By using their portion to pay for a large chunk of our operations, it allows us to give out more of our member's money directly to the families every month! Currently, 50% of donations are given to recipients. That number will never go down, but our hope is to eventually bring that number up and up as we raise more awareness over time.

Is Love Drop a 501(c)3 organization? If no, why not? Will you make your expenses transparent to the public?

Nope, Love Drop is not a 501(c)3 charity. We are a small business doing charitable things. We wanted to build something super simple and scalable where we can focus on the “doing of good” over the red tape and restrictions a charity can bring (what you see online is what you get when it comes to our finances - there's really nothing more to it). It had been a constant work in progress for seven months straight, but as soon as we realized we could create our own little hybrid here, Love Drop was up and runnning in no time. Within 24 hours we had our first version of our site live and over 15 new members to our team! That was pretty eye opening for us and proves that at the end of the day people just want to help.

We know there are those who feel more comfortable giving to a charity - and we totally encourage that - we're just offering another fun and creative way to get out there and directly make a difference in people's lives. It's nice and simple and we're having a blast so far.

Tell us about the first Love Drop recipient and how and why you selected her.
Our first recipient is Jill! She is an awesome role model with a great great family and really is one of the most inspirational people we now have the pleasure of knowing. When you can survive being homeless (TWICE!) and literally lose everything you own in a fire and still keep smiling, there's really no words to explain how moving that is. Her story of moving on and giving back to the community throughout everything is truly incredible. We can't wait to show her all we've raised so far for her family - you can pretty much bet on me crying at the end of it.

If people don't have money to donate, are there other ways to help out?

Absolutely! I'm glad you asked that because we're really excited about some of the things we're currently working on together:

  1. If you're a blogger, you can join our blogger network! We'll give you all the content you need and all you have to do is blog about the person we're helping that month. It's a super easy and rewarding way to spread the word and raise more support for our families.
  2. You can join our Street Team - We have a small army of volunteers all around the web (and also on the ground) across North America. Their mission is to spread the word about Love Drop and provide support for our activities, both online and off - including social media.
  3. You can give a gift or service! Gift cards, clothes, fun stuff for the kids, letters, home-made items, etc etc. Jill's family currently needs all of this stuff above, but every month we'll have a new list of items we think can really help out each of these families.

If you'd like to provide any of these items above, or have other ideas of your own (we love ideas!) you can email us at team (at) lovedrop.us and we'll make it happen. To become a member of Love Drop, you can sign-up here. Thank you all!

Editor's Note: We haven't tried out Love Drop yet but we're very interested in learning more about this fascinating new way to give. If you are a Love Drop member please share your experiences with this program in the comments.

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Guest's picture
Guest

This smells like a big scam. There are 100's of companies that do similar charity work. Why start another company and skim 30% of the top? What a joke.

Will Chen's picture

It is always good to be skeptical of any organization asking you for money. =)

But J. Money has been an active member of the PF blogosphere since 2008, so I think it is fair to adopt a wait and see attitude.

If you come across any complaints (or praise!) please check back with us on this thread and let us know.

Guest's picture
J$

Sorry you feel that way Guest, but we understand our organization isn't for everyone :) We chose to start this company to give back and make a difference in one family's life a month in a way that's meaningful to US. Those who want to join us will, and those who don't will continue giving to their charities of choice - and that's totally cool. The point is that it's super easy for anyone to give back, and this is the way we choose to do it.

Guest's picture
Justin

30% is a lot for operating expenses. Charities take a cut too, but normally only around 15%. Why give through these guys when you could give through a charity, have more of your money get where you really want it, and get a tax write off at the same time???

Will Chen's picture

I'm guessing it won't always stay at 30%. Right now the organization is fairly small, so probably everything is really expensive for them. They don't have economy of scale or an army of volunteers to do free work for them.

I agree with you that if you want to get maximum efficiency out of your charity dollar, you might do better going on Charity Navigator and find a super efficient charity. But I can also see that some folks might prefer to do Love Drop because it is more fun and gives a sense of community that might be lacking from simply donating to a big charity.

Guest's picture
Leigh

Food for thought: most people don't file donations under a certain increment (ie, if i'm donating $1 or $5, tax deductibility might not be a huge deal).

In a lot of the non-profits where I donate, I don't have a real connection with how the money is being spent. With Love Drop, I watch videos + learn about the recipients + feel inspired and engaged. Those feelings of engagement + accessibility are a service, so I know that I'm paying for a service while also making a donation.

Understand that it's not for everyone. Completely understand that people might choose to donate their money in other ways - perhaps the services offered by Love Drop aren't that valuable to them.

But I think it's important to note that people give for many different reasons, which is why there are so many different ways to give.

Guest's picture
J$

This is all true Justin, charities are awesome organizations! Unfortunately the people we're helping don't get any support from these charities ;) What we love about our org is that you can literally watch your money being handed over to the family we're helping within 1-4 weeks of us receiving it. It's very direct, and it's all on camera. We also plan on following up with our families to keep our members up to date on what how they're doing since we last shared their stories. Again though, Love Drop is just another way anyone can give back. If you believe in certain charities over our group that's totally cool and you should continue rockin' it.

Guest's picture
Leigh

I'm a Love Dropper so I thought I'd chime in. I make one-time donations each month (instead of a predetermined subscription) so that I can give as much as possible within my monthly budget. It might be $5. It might be $15. And hopefully in the future, even more.

What I love about Love Drop is the community and accessibility. I think people are looking for ways to give back that aren't intimidating. With subscriptions starting at $1, it's really easy to join.

And, I'm a community nerd. So, I'm happy to see people come together to help someone. I live and work in Cambodia, but can be actively involved in a drop happening in Chicago - that's pretty awesome.

Will Chen's picture

Thank you for sharing your experience with us Leigh. Personally how do you decide which candidates to vote for? I'm sure it is quite a tough process since so many people are deserving of help.

Guest's picture
J$

Hi Leigh! Awesome seeing you here :) Thanks so much for spreading the love and always participating! It's refreshing. And from now on you are answering all of the questions about Love Drop - haha...

Guest's picture
Guest

I love the idea of peer to peer giving rather than lending

However I'm a little troubled by the fact that the goal is never to be a recognized charity. If you're not looking to be a charity, then you're looking to be a profit-making enterprise - it's really the only two choices.
Charities can pay salaries as part of their expenses.
The idea of a profit-making enterprise using 'donations' to a person in need to make a profit feels kind of wrong, to ME. I wouldn't give to that sort of organization.
I know you're not making a profit right now, but it felt like the interview suggested that you plan to in the future.
Most folks who are doing what you do either take nothing but strict out of pocket expenses as portion of the donations, or nothing at all, or are a 501(c)(3) corp.
Just my .02

Guest's picture
Leigh

Wow, such strong sentiments about the fact that Love Drop isn't a charity.

Yes, many donation-based organizations are in fact non-profits. Yes, if you're not a non-profit, then you have potential to make a profit.

However, there's an emergence of social businesses that pursue multiple bottom lines. Where financial gain isn't the only indicator of success. These businesses are cause-drive and use profits to make themselves sustainable. Additional money is reinvested back into the cause they support.

I suspect that once the subscription level reaches certain tipping points, Love Drop will be able to lower the percentage in order to continue paying for their own operation costs (instead of relying on grants) and thereby pouring more of the subscription money into the individual drops.

However, I can understand your hesitation about not having this information clearly presented and outlined.

There are enough hybrid business models that there should be room to be an organization that does good without automatically locking yourself into non-profit status, especially if it doesn't serve the goals of the organization you wish to create.

Guest's picture
J$

Leigh hit it right on the head -- as our memberships grow, we hope to lower the % of operations until it's barely noticeable. Even at 30% we still rely heavily on monthly partnerships from businesses to help spread out the cost of everything. We'd love nothing more than to give every penny received back out again to the families we're helping, but unfortunately we'd go in debt and then we wouldn't be able to help anyone :( It's a balance that we'll always be tweaking. In our books, 50% of thousands of dollars can better impact a family's life than $0.00. We're not in this for the money - we're in it to do some good.

Guest's picture
Sam

30% does sound like a lot, but giving 50% of your money is better than giving 0% of your money and using it on other things.

I think I was reading that the average charity takes 10-15% of your dollar for operations. So perhaps it will trend that way. I'm sure it's tempting to use the 30% for anything and everything, so I'm sure they'll publicize exactly where the 30% will go, line item by line item.

We give away 100% of our money to our Yakezie Writing Contest winners. So I think it's great they can use the 30% for their own operations. It's a good cause.

Cheers

Guest's picture
J$

Thanks Sam :) Love what you guys are doing too - keep it up!

Guest's picture

Hey guys, this is Nate St. Pierre, one of the co-founders of Love Drop. I wrote a guest post on the Spin Sucks blog here today: http://www.spinsucks.com/entrepreneur/love-drop-making-money-by-giving-i...

Not trying to take you away from the discussion here on Wisebread, but there are detailed answers to a lot of your questions on this post.

We welcome all thoughts and criticisms of what we do and how we do it - every single one helps us get better and make a bigger difference.

Plus, we like a little chaos too. :)

Nate

p.s. We're not worried about not having the do-gooder street cred, either. Both of us have many years of good standing in our respective fields, and anyone who does any kind of research will easily see that.

Andrea Karim's picture

I used to work for a business in Seattle that runs several websites that sell goods related to various causes. Mind you, it was a retail operation, and it wasn't a non-profit. But I'd estimate that much less of their overall revenue went to charity, and yet, it was still a great deal of money going to charity. No one seems to question their value or intentions; however, they are selling a tangible product, so once people get their African birdhouse or whatever in the mail, perhaps they don't care that only 5% of their purchase benefited charity in any way.