Speaker 1:
From the library of the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, you're inside the Ice House. Our podcast from Intercontinental Exchange on markets, leadership, and vision and global business, the dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years. Each week, we feature stories of those who hatch plans, create jobs, and harness the engine of capitalism, right here, right now at the NYSE and at ICE's exchanges and clearing houses around the world. And now, welcome inside the Ice House. Here's your host, Josh King of Intercontinental Exchange.
Josh King:
In January, the US Census Bureau published its volunteering and Civic Life in America report. It provides data on the impact of Americans, both formally and informally, using their time to help others. It's the sort of data that researchers like Robert Putnam and Shaylyn Romney, our guests back on episode 274, pour over to measure what they've termed the I-we-I curve. Now, admittedly, I took a less scientific approach and stuck to one of the big bullets. Between September, 2020 and September, 2021, at the height of the COVID pandemic, Americans formally volunteered, meaning through a recognized organization like Team Rubincon or the Red Cross, more than 4.1 billion hours of service with an estimated economic value of $123 billion. Now, if you wanted to tally all of that up in 2021, those 4 billion person hours, combined with over 484 billion of philanthropy, according to Giving USA, it means that as a country, the altruistic instincts of the United States gave away the equivalent of the total market capitalization of American Express in labor, and the total market cap of Visa in donations in 2021.
Now, here at Intercontinental Exchange, over the past five plus years that I've been both an employee and the host of this program, I've watched our corporate processes for encouraging and facilitating personal contributions get better and better. The basic philosophy is that the company's done well, pretty well over its 23 year history and feels an obligation to give back to the communities in which it operates. Now, of the millions that ICE provides in donations, the view is that the sole decision making of where the money should go shouldn't be solely at the discretion of the few folks at the top of the org chart, but rather spread across our employee base of more than 15,000 people. And that's why every year, ICE says to employees like me, that the company is going to match dollar for dollar up to $5,000 in personal donations, a privilege that I use to the maximum.
And where do people give? It's up to them, based on their circumstances, their passions, and their perceptions of local needs. So among the charities that I give to are smaller 501 (c)(3)s where I know the leaders personally and what they're going to do with the money. That includes the Adaptive Sports Foundation in Wyndham, which puts wounded warriors and others with disabilities on skis and reconnects them with activity and nature, and also to the Wyndham Foundation, which among other things, provides free dentistry to a community too small to support its own dental practice. And also this year, a new one for me, Puppies Behind Bars, which trains incarcerated individuals to raise service dogs for wounded war veterans and first responders, facility dogs for police departments, and explosive detection canines for law enforcement. Now, everyone has their own unique stories about what motivates them to give. And at companies like ICE, it lets us act on those passions to the tune here of over a million dollars a year.
As long as the organizations conform to the standards and practices, they qualify them for tax exempt 501(c)(3) status of the IRS code. So just imagine scaling that to everyone who works at companies like ICE and using technology to make it frictionless for folks like me to easily act on our passions. And yet, and here is the big but, in many places, the underlying financial pipes and infrastructure that move the funds to where they're needed most, like me getting a match donation to Puppies Behind Bars is in desperate need of a dose of good old fashioned American ingenuity. And according to what our guest today, Groundswell founder and CEO Jake Wood wrote back in July of 2022, corporate giving in particular has not evolved much since General Electric created the program back in 1954. That's why he launched Groundswell in 2021, to revolutionize how companies and employees can give by leveraging best in class technology to remove that friction, increase efficiency, and democratize the process. Our conversation with Jake Wood on democratizing corporate philanthropy, using technology as a giving multiplier and his personal journey in purpose and entrepreneurship, that's all coming up right after this.
Speaker 3:
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Josh King:
Our guest today, Jake Wood, is the founder and CEO of Groundswell, a software company aiming to democratize philanthropy. He's also the executive chairman of Team Rubincon, a global nonprofit he founded in 2010. Prior to joining Team Rubincon, Jake served four years in the United States Marine Corps as a scout sniper platoon member in combat in the wars in Iraq and Afghanistan. He's the author of Once A Warrior and speaks frequently on topics of leadership, organizational culture and social issues. Thank you for your service, Jake, and welcome inside the ICE House.
Jake Wood:
Yeah. Josh, thank you for having me. So happy to join.
Josh King:
So talk about the philanthropic spirit. How much money did your four year old have in his piggy bank to incentivize you from staying home from work to help by paying the family bills?
Jake Wood:
That's right. Yeah. No, so I mentioned a week or two ago, I hit peak fatherhood when my little girl said, "Daddy don't go to work." And I explained I have to work to pay the bills. And she said, "I'll give you money from my piggy bank." I think she's got approximately $5 and 75 cents in there, so I'm not sure it would've gotten us very far.
Josh King:
Pay a little bit of a streaming bill, maybe a couple Apple rentals. Yeah.
Jake Wood:
Go watch Frozen for free for the next week on that.
Josh King:
Jake, the data that I talked about in the intro is from two years ago, and revealed this uptick in giving in volunteerism after years of reducing numbers. And we all sort of felt it, I think during the pandemic. But through your work, I imagine that you have got to have a lot more timely insights than that report. What impact has this fear that we all have of recession and the economic uncertainty that gripping companies have on philanthropy and corporate giving, maybe last year and into this year in 2023?
Jake Wood:
Yeah, it's really interesting because I think one of the things experts have seen in past recessions is that while charitable giving is not entirely recession proof, it doesn't historically get as impacted as more broad consumer spending. I think one of the things though that's so strange about the current economic environment... And listen, I'm not an economist, so I'm probably making some people cringe out there. I think that there's a disconnect right now between economists and consumer sentiment, right? And when you think about the nearly 500 billion a year given away to charity, the vast majority of that by individuals, I think we're still kind of in a wait and see a little bit of a holding pattern as to whether those consumers, those donors, where they're still out there spending their wages have increased at some of the fastest rates in recent memory, whether their charitable giving is going to dampen.
Now, what I can share unequivocally is that I think executives and the companies that they lead are a lot more fearful about the economic conditions that are forming or that have formed. And I think I have seen a pullback in charitable giving at a corporate level. I think in some ways, that's natural. Companies are hunkering down, they're cutting costs, they're reviewing it, budgets, headcount, all of those things you see in the headlines. I think CSR is a place that many folks can say like, "Hey, I don't blame you. It seems somewhat discretionary." But there are real downstream impacts to social services when that happens, so it's going to be important for us to get some better early indicators as to how 2023 is going to shape up.
Josh King:
Yeah. You've had amazing success in raising awareness and funding with Team Rubincon. We're going to talk a lot about Team Rubincon. And you're now revolutionizing philanthropy with Groundswell. Of course, looking back and getting ready for our conversation with you, we looked at the piece that David Gelles did in the New York Times in 2021 with you, that there was this connection as you're going way back in your history between you and your family visiting a Nazi concentration camp and what has ultimately been your life's work. How did that experience shape that work? And was service something your family supported you growing up?
Jake Wood:
My father took a job in Austria in 1989. I was a young boy. And probably about a year after being there, my family visited a place called Mauthausen, which had been a concentration camp during World War II. I'm not Jewish, but I don't think you have to be Jewish to have a visit to a concentration camp deeply impact you and your perspective on the world. I think in addition to really understanding for the first time, and again, to contextualize this, I'm six or seven years old, but to understand for the first time the depths of evil the human beings are capable of was really formative. But it was also really formative for me to see the exhibits that showed the liberation of the camp by Patton's army. These were men and women who had crossed an ocean to go save people they'd never met in a country they'd never been to. And that's really compelling.
And I think for me, that was kind of a seed that got planted. As I grew up, then my family moved back to the states a year later, grew up in the Midwest, pretty normal childhood, playing sports, all those things. I often would close my eyes at night and I would think about joining the military. I wanted to be one of those, those GIs that I saw liberating Mauthausen. Didn't end up doing that, but I think it's hard not to be inspired by those stories, and I was certainly no different.
Josh King:
So there you find yourself kind of, after the family's time in Austria, you mentioned in the Midwest, Pleasant Valley High School, Iowa, you're playing football, and looking at schools like both Stanford and Wisconsin. And then you make this choice of Wisconsin, probably good place for an aspiring offensive lineman. And so you have to chalk it up to bad luck that you're following on the depth charts someone who famously went fishing with his dad on NFL draft night was also on the roster.
Jake Wood:
Yeah. So I ended up backing up Joe Thomas for the last two years of my time at Wisconsin. And Joe, this year, will likely be a first ballot hall of fame inductee. In fact, I'm sure that news will get announced any day now. And I went to Wisconsin over a bunch of other schools because Wisconsin's the best offensive line program in the country. And at this point in my life, I'm 18 years old and I've made the decision that, hey, the military, that was a fun childhood dream, but now the dream is to go play in the NFL. And if you're an offensive lineman as a senior in high school and you have the opportunity to go play for the University of Wisconsin, it's a slam dunk. At the time, over the previous, I think six or seven years, every single player that had started a full season on the offensive line at Wisconsin had signed at least one NFL contract.
And that record has more or less persisted for the two decades since. I never broke that starting lineup in a consistent way. And you can't always predict who else they're going to recruit after you. I knew they were going to continue to go get great players because that's what Wisconsin does. Didn't know it was going to be a Hall of Fame player. But I wouldn't change anything. It was an amazing experience. I learned a ton. I played for a Hall of fame football coach who was great and taught me the importance of team culture and all of those different things. So awesome experience. Might've gotten more playing time if I'd gone to Iowa State or Stanford, but whatever.
Josh King:
Well, whatever. You did make it to the Big 10 academic all conference team, double majored while you were at Wisconsin, and then your life takes a turn. And we did a group enlistment on the floor of the New York Stock Exchange on our first opening bell just a couple weeks ago, our first opening Bell of the year. And I asked one of the marine recruiters here, I think it was somewhat naively in retrospect, I said, "Where are the best places to find Marines?" And he told me, emphatically, "We don't find Marines. We make Marines." You could have gone into business school, you could have done a bunch of things even after you had those dreams as a kid, but there were the Marines and there was that enlistment form.
Jake Wood:
I started thinking, in the second half of my time at Wisconsin, what life without football was going to look like. By that time it was clear that I wasn't going to the NFL, and it was time to start thinking about what that next thing was. And I had options. But 9/11 happened my freshman year. That was obviously impactful. Pat Tillman was killed right before my senior year, and I think that was kind of a moment of reckoning for me. I reflected on who I wanted to be, the type of person I wanted to be. And I thought Pat's example of making the hard choice, regardless of personal consequence, that he made in the weeks after 9/11. That was the type of person I wanted to be. So in that moment, right before my senior year, committed to joining the military in some fashion, and then the exploration began of what service I would join. I'd always been fascinated by the Marine Corps.
I always felt like the way they recruited spoke to me. You mentioned your exchange with the Marine Corps recruiter. That's just the marine Corps's way. We're not here for you to find a way to pay for college. We're not here for the job training. You're going to get that stuff. We're here to make Marines and win wars. That's the only thing we do. And for me, it was just kind of this no nonsense, almost mythical aura that I embodied the Marine Corps, and I just knew that that's what I wanted to be a part of. So I enlisted right after I played my last game, which was on January 1st, 2005, I was in the Marine Corps. There were some delays because of there was a backlog in the training pipeline. It was the height of the war. But I reported to Marine Corps Recruit Depot, San Diego on October 25th, 2005, and began my transformation to becoming a Marine.
Josh King:
So pat Tillman had set of great physical attributes, obviously based on his play with the Arizona Cardinals, but there was also this fact that Pat was somewhat older than your normal 18 year old recruit, same as you, a lot older than an average. You had a college degree, you had your experience as a NCA division one athlete and being coached for all your life up to that point, and being part of a high performance team. Did that give you a different kind of edge on the others that were coming into the depot in San Diego? And were you able to provide guidance to those other recruits with less life experience?
Jake Wood:
Yeah, I think the answer is no doubt. I showed up the recruit depot. I'm six foot six, 235 pounds. I cut a bit different than the rest of the guys that showed up. I'm 22, maybe going on 23 years old. They're all mostly 18. Got a college degree. You outlined it. I think the big thing was having played that college football, that high level college football where there's high degrees of accountability, performance is key. And my drill instructors love to pick on me. I'm sure I was a target frequently.
Josh King:
Did they have a name for you?
Jake Wood:
Well, when I went through Sniper school, this is a couple years later, one of the instructors, Sergeant Reyes, man, boy, he had it out for me, and he called me Woody Woodpecker just in the most demeaning way. But no, in bootcamp, the most demeaning thing you can be called is recruit. So that's all they called you, was recruit because it means you're not yet a Marine. I was put in charge of the platoon, so it's called the guide position. You guide the platoon. And so you're kind of like the top member of that 80 person recruit training platoon. And so I graduated as the guide of that group. And yeah, there was a lot of helping those other Marines get through it. You had a bunch of kids who had never been away from home before, and suddenly they're gone for 13 weeks and there's no phone calls, there's no internet, there's no... You get mail, physical mail once a week.
So helping those guys get through that home sickness, helping them study for the written exams, helping them to contextualize the hazing that was going on, and really help them see that light at the end of the tunnel. It's interesting because after bootcamp, you go off to your various occupational specialties. I chose the infantry, so I went off to the School of Infantry, but a lot of those guys went on to become cooks, supply clerks, truck drivers, you name it. And so I never saw... I'd say the vast majority of them, I never saw again in the next four years. But a handful of them have sought me out. Interesting. And in fact, one of them just yesterday shot me a note on LinkedIn and said, "Jake, I've gotten involved with Team Rubincon. I'm looking to apply to the fellowship program," which is something that we run internally.
"Would you write me a letter of recommendation?" And it is just kind of interesting, full circle, almost 20 years. Here's a guy that I kind of helped get through some of the toughest 13 weeks of his life, haven't really spoken to the guy in two decades, and our worlds collide with Team Rubincon, so it's pretty special.
Josh King:
Talking about Team Rubincon, Jake, initially you had done your time. You planned on attending business school after your discharge in 2009, but instead, you end up on the front lines of a natural disaster. Can you take us inside the decision you made to head down to Haiti, and according to one of the talks you gave at Wilkes University, accidentally become president of this nonprofit along the way?
Jake Wood:
Yeah, so I did two tours of duty during my time in the Marine Corps. Tough tours, both the two deadliest years of the war. And so I think I made this decision at the conclusion of those tours that I didn't want my life to be defined by war, and so it was time for me to get out, which was a tough choice. Part of me wanted to stay in and go back and keep fighting, but I think there was a voice inside of me that I chose to listen to that said, there's something more. So I got out my last day in the Marine Corps is October 24th, 2009, took the GMAT, applied to some top business programs, and was sitting around in January, two months later, waiting for those decisions to come back. And I turned on the news and an earthquake had hit Haiti. So it's January, 2010, a 7.0 earthquake hits the poorest, most corrupt nation in the western hemisphere.
And a lot of people don't remember, but a hundred thousand people died instantly in that earthquake. Another a hundred thousand people would die in the next two or three weeks from both their wounds, from violence, through a bunch of other ways. I think part of it was just being a recently discharged combat veteran with a high opinion of himself, whatever it might be. But I just looked at that moment in that situation and I thought, man, it's not that different from the war zones I was just in and I can help. And so knowing that I wasn't going to start that grad school journey for another six, nine months later in that fall, I started calling around offering to help go down and volunteer, kept getting rebuffed. Nobody knew who the hell I was and nobody cared. They weren't going to send some stranger to go help their organization in the aftermath of a major disaster.
And so frustrated by that, I just called some guys I'd served with, we got some doctors and we went to Haiti and got their four days after the earthquake and began treating people, doing these medical triage clinics in some of the hardest areas of the city, and it just snowballed. It just snowballed and my life took this unexpected turn where rather than go on this business school journey and join the corporate world, I found myself, for the next decade plus, running a global humanitarian organization.
Josh King:
Yeah, so it grows from that early days in Haiti to and a half dozen former Marines crossing the river to over 150,000 volunteers that you can marshal for these natural disasters. What did the experience and building the team to help you run the organization teach you about hiring and scaling that you would now put to use to Groundswell in other organizations?
Jake Wood:
It was interesting because it was a lesson I had to learn. In the Marine Corps, you're often just... You're given the troops that you have to lead. You don't so much assemble teams in the military. You inherit them, and then you have to shape them, mold them, train them, lead them. You can't fire marines. And so there were a lot of elements of that that I had to figure out. I think there were a few though that struck a chord with us early. One of the things that we did really early on was let try to define the skills or the experiences that we were looking for in people as we were hiring and more just the who's the type of person that we're looking for? What are the qualities? And then because once you define that, the type of person that you want... You can go and either teach the things that they need to know or you can find somebody that has it.
But I think too often, people start with the latter, not the former. So very early on, and still to this day, almost 15 years later, we had this kind clarion call in our job description saying we're looking for people foolish enough to think they can change the world and smart enough to have a chance. And that really was an early discriminator for us because a lot of people would read that and say, "These guys take themselves way too seriously. I want another." And that's fine, that was great. They weren't a good fit. But then there were a lot of people who read that. They were inspired by that. They saw themselves in those words and they said, "This is how I can become the best version of myself." And then you've thinned the stack of resumes down, and then you're going through and you're looking for those other qualities.
And then I think the other thing that we had to overcome is this tendency for young leaders, and I guess I shouldn't even just say young leaders, because I've now seen this with leaders at all levels, but this tendency for leaders to fall victim to their own insecurities in higher people that are measurably less talented than them, they do that because they think it'll be easier to lead those people. They don't want a palace coup. And so if they get people that are measurably less talented, they don't have to worry about it. But I think the best leaders, the best organizations are those that have a really just an enormous density of talent and leadership at all levels in the organization. And that really starts at the top.
So I made this conscious decision early to surround myself with super talented people that every day, I felt like I had to earn the right to continue to lead them. And they filled my gaps, I learned from them every single day, and they made me better. And like I said, I showed up to work every day feeling like I was auditioning for my job. And that was, I think, a good place for me to be in. I was a first time entrepreneur. I didn't know the first thing about building and scaling a company. If I tried to fake it, people would've seen right through it. I had to be humble enough and vulnerable enough to admit what I didn't know.
Josh King:
In a recent episode, Syndio's CEO, Maria Colacurcio spoke about her experiences volunteering beside veterans that were working with Team Rubincon and how that shaped her as a leader. Teaching corporate leaders how to run teams is this nice knock on benefit, but how were the thousands of veterans helped themselves by working closely with Fortune 100 and other large companies?
Jake Wood:
When we bring these two groups together, a ton happens. First, you kind of demystify both groups, right? So I think often corporate America thinks of the veteran community as a monolithic community. They think of it as largely white rural males, conservative, low, median education levels. And the reality is the military veterans are a rich tapestry of diversity. They are all walks of life, urban, rural, everything in between, education levels across the spectrum, racially diverse, sexual orientations, and politically diverse. And so you demystify that. Then you also just demystify this belief that we were all over there playing Rambo. And what you realize is, wow, this secure networks engineer is really just an IT nerd in a uniform who just so happened to be setting up secure networks in the most austere environments on the planet. He wasn't out there with a machine gun playing Rambo. He was doing his job to a high quality outcome in challenging situations. Once you start thinking about the veteran community through that lens, then you start reshaping your hiring practices. You start rethinking minimum requirements for job descriptions.
Because that person may not have a four year degree, but that's a highly trainable person who has proven that he or she can succeed in challenging environments with a team attitude and a mission first mentality. Who doesn't want that on their team? Conversely, I think the veteran community often leaves the military, and they sell themself short,
Josh King:
Yeah.
Jake Wood:
You have so many infantry men, the job that I came from, where we were, the guys out there patrolling with rifles and machine guns and kicking down doors. And they get out and they think, "All I can ever do is security or be a cop." It's like there's nothing wrong with doing personal security or being a police officer. We need more great people in those roles, in those functions, but you learned a lot of soft skills doing what you did. And I keep using this word trainable. The one thing that the military does a really good job of is teaching people how to be taught. And so you come out of the military like a sponge, able to soak up new skills, eager to soak up new skills. And you put those infantry alongside some corporate executives, some people that work in finance and accounting, or maybe their software engineers, and that rifleman suddenly sees himself or herself as a software engineer or as an accountant, or maybe even as an attorney, and their whole lens on how they look at their professional opportunities begins to shift.
Josh King:
The rifleman sees him or herself as moving in a completely different direction, but with that same really sense of purpose that has run through their service and then into their professional lives after that. And you have used this phrase sense of purpose, and I noticed passion is one of the major main words that you also use when describing your work with both Team Rubincon and Groundswell. Do you see this relationship between passion and purpose? And how would you define both of those for yourself?
Jake Wood:
Yeah, there's no doubt. I think regardless of what their motivation was to join the military, some people, it was patriotic duty, some people, it was economic opportunity, doesn't really matter. I think it becomes this melting pot where you do achieve, on the average, this unity of purpose and mission. And I think that remains important for those veterans when they get out. There was a pretty stunning statistic, and I won't be able to cite it directly, but a staggering percentage of veterans last less than one year in their first job outside of the military. And I think it's because they jump at a paycheck, or maybe they jump at the first thing that's offered to them. And then they get in there and they realize, this is not purposeful to me. And so they go and they look for that next thing that is purposeful.
And listen, people can find purpose in a lot of different ways. They can find purpose just by being a good parent in their family. They can find purpose by coaching the little league. They can find purpose in the church, volunteering with Team Rubincon. Maybe they find purpose in work, being a cop, being a firefighter, whatever it might be. But if they're lacking that, they are seeking it in some way. And that's one of the things we've seen in Team Rubincon. We offer the volunteers that work with us this opportunity to discover a purpose that's noble, a purpose that is, I think unimpeachable. A lot of people left the military questioning whether the wars were worth it. And I think that that drags on them emotionally, but now they can pour that same energy into a mission that is pure, right? Helping people in the aftermath of disasters. There's no debating whether you should go into a community after a disaster and assist those people. You can rightfully debate whether we should have been in Iraq. And so it just offers people this opportunity to bring clarity to who they are and what they're accomplishing.
Josh King:
As we head into the break, Jake, you stepped down as the CEO of Team Rubincon to devote more time to this startup called Groundswell. What was the tipping point where you realized that your stealth startup was ready for its debut, and as I've seen on your Twitter feed, that your friend, Art delaCruz was ready to take the reins of the organization that you and Clay Hunt started?
Jake Wood:
Well, make no mistake, Art was probably ready to take it over from day one. He'd been with us for five years. I think I just got to a point, after running the organization for 11 years, that I wanted to be an entrepreneur again. Team Rubincon gotten so big. And not that it was bureaucratic. We're still a lean, agile organization, but we had 200 full-time staff, 50 million budget, a hundred thousand volunteers, complex operations globally. I was missing that hooking and jabbing that you do when you're a startup founder. And so I had two girls, young, the window of opportunity to go and start a new company, new organization was closing fast. And I just knew if I wanted to do it again, and I'd always known that I did, that the opportunity was now. And I was lucky to have a guy like Art that could make the decision easy for me
Josh King:
Hooking and jabbing. After the break. Jake Wood, the CEO of Groundswell and I are going to talk about the development of his company and how employees are using the technology to decide where their philanthropy dollars are going to get spent. And that's all coming up right after this.
Speaker 5:
Connecting the opportunity is just part of the hustle
Speaker 6:
Opportunity is using data to create a competitive advantage.
Speaker 7:
It's raising capital to help companies change the world.
Speaker 8:
It's making complicated financial concepts seem simple.
Speaker 9:
Opportunity is making the dream of home ownership a reality.
Speaker 10:
Writing new rules and redefining the game.
Speaker 11:
And driving the world forward to a greener energy future.
Speaker 12:
Opportunity is setting a goal.
Speaker 13:
And charging a course to get there.
Speaker 14:
Sometimes the only thing standing between you and opportunity is someone who can make the connection.
Speaker 15:
At ICE, we connect people to opportunity.
Josh King:
Welcome back before the break, I was talking to Jake Wood, the CEO of Groundswell about his career, his work with Team Rubincon, and his decision to set out on his next entrepreneurial adventure. So Jake, we left off with your decision to move into the executive chair role over at Team Rubincon and publicly launch Groundswell. And I talked about it a little bit in the introduction about what I do personally at ice, what other companies do together, and what it could all mean if it gets scaled. But what are your estimates for the addressable market that philanthropy as a service is serving? And is the sector mostly white space, do you think?
Jake Wood:
Yeah, well I think the TAM, the total addressable market is enormous. If you think about other analogs that maybe don't immediately come to mind for most people, but this is how I think about it. You think about the 401k, largely ubiquitous across major companies today, The 401k did not exist in 1979. 1980, it was introduced via changes to the tax code. By 1983, I think there were 17 million accounts at 7,000 companies across the country right, right? Now, of course you fast forward to today, and you can't get a competitive job offer that does not include a 401k. And so when you think about the financial wellbeing as a trend in strategic human resources space, when you think about the charitable giving statistics that you outlined at the beginning of the show, listen, 73% of American households are giving to charity every single year. There's an opportunity for those households to do that more efficiently and for those companies that they're working at to help either make that giving more efficient by providing tax managed vehicles to do so or by directly subsidizing that charitable giving for those employees.
It's a way to align values. It's a way to really impact the bottom line in their household. And we think that this will be the next 401K and HSA in competitive compensation packages by the end of this decade.
Josh King:
Now, you got to be able to raise a lot of money to start a business that's going to scale the way you'd like Groundswell to scale. And I believe the reports that have been printed, you've raised about $300 million while running Team Rubincon for that venture. What did that experience teach you about fundraising now that you're running what many folks would look at as maybe a more traditional technology startup?
Jake Wood:
Yeah, I think fundraising is all about telling a good story. Certainly, you only get a good story if you have a good product. And for Team Rubincon, that product was the impact that we generated in disaster zones. But that story then invokes emotion in the person that's listening to it, and it helps them to envision a future state and convince them that you can achieve that future state. So when we were going out and raising venture capital money for Groundswell, the new company, obviously we didn't have a product yet that we could point to with that storytelling. But being able to weave together the unique nature of American society, the charitable nature of it with these trends that we see as real tailwinds, again, financial wellbeing being top of mind for a lot of HR providers, the growth of donor advised funds amongst the top 1% of earners in the country, the increasing expectation from all stakeholders, both employees and consumers, that companies take stance on social issues, which I don't know is a bad thing, but it's certainly unsustainable for a lot of executives to stay ahead of.
And so we see this as an opportunity to address that. And then of course, the newfound focus on issues of diversity and inclusion. And when you think about how a lot of traditional corporate giving has been managed over the years, hey, what nonprofits does the CEO sit on the board of? And we're going to cut a big check to that because it makes the CEO happy. And that's not a very equitable or inclusive program to run. And so our thesis kind of sits at the center of all those tailwinds. And our belief is that if you democratize corporate philanthropy, and not just corporate philanthropy, but access to tax advantaged giving vehicles like donor advised funds, that you can create a better way to move money to charity that empowers employees and solves the problems that they think are most pressing in their backyard.
Josh King:
Right. So the CEO or the chairman, we no longer cut a big check to the organization that they're on the board of. Now, we want to, as you say, democratize corporate philanthropy. I offered sort of my own experience of, deciding in December, and I saw you tweeting about this in December too, about saying, "Look, I want to make sure I give away some money before the end of the year, but I need good technology and a good platform to do it, and I don't need to spend all day filling out a lot of forms and not having good record keeping or not having it connected into the company's system." So just give us a little primer on how Groundswell works and how you make it tick.
Jake Wood:
Yeah, so Groundswell really has two products. Our consumer product is a mobile app that serves as a discrete donor advised fund for anyone that downloads it and creates an account. And so for folks who aren't familiar with donor advised funds, the best way to frame this is if you're super rich, filthy rich, you create a family foundation, Bill Gates, Warren Buffet, all of those folks. If you're just really rich, you have a donor advised fund, which for all intents and purposes, looks, acts, feels like personal foundation. It's got lots of tax advantages. You can take tax deductions immediately, but give the money away over time. You can invest the balance of that account for tax-free growth. This is how rich people give. Historically, those donor advised funds have not been accessible to normal people. They've only been offered by wealth management firms. They have exorbitantly high minimum contribution requirements like $20,000.
Again, normal people can't donate like that. So we've built a platform looks and feels like Venmo, but it's for charitable giving. Create an account, you've got a donor advice fund, minimum contribution is $1. So it's accessible to anybody. But the real strategy is we've built a corporate platform that allows companies to give these accounts to their employees, and then unlocks the ability for that company to either directly fund or match donations into those accounts. So really subsidizing the charitable giving of its employees. Tons of advantages for doing that. It's a better way of running corporate matching for companies that already have matching programs. We can reduce the administrative burden of those programs by 98%, virtually eliminating the accounts payable burden, all sorts of things. And then what companies get in return is really rich and compelling data about what their people care about, not at the individual level because we see that as a violation of privacy.
And it's really important in a polarized world, but anonymized data about all the different issues and causes that matter to their employees, which is really a roadmap for executives and people leaders to navigate these moments, like Tyree Nichols or a shooting at an LGBTQ nightclub. How do you respond in these moments? Well, having data about what really resonates with your people, because they're voting with their wallets, that's powerful.
Josh King:
Let's say there's another earthquake in Haiti. What impact does streamlining the giving process and using technology like apps have on the speed and effectiveness of getting money where employees think it needs to be to help, or responding to Tyree Nichols or other sort of late breaking news that says, "I want to jump in and help here?"
Jake Wood:
Well, I'd say a couple things. First, the traditional matching software platforms out there, they're pretty legacy and they only serve really large companies, and about the size of a company like ICE. And they're all desktop, right? Single sign on desktop application, got to use my work computer to get onto it. The reality is people give when they're inspired to give, and people generally aren't inspired to give when they're sitting at their desk at work. They're inspired when they pass a homeless person on the street. They're inspired when they are watching breaking news while drinking a cup of coffee in the morning or they're reading the newspaper on the train, they're commuting to work. They're not going to set a reminder to go to their desk and make that donation. And so there's just a missed opportunity here. That's why we went native mobile. We want people to have no friction in that moment of inspiration between, "I want help in this moment" and "I'm to give." They should be able to do that with a couple taps of their thumbs.
So that's what we've built. With Groundswell, the second thing I would say, and you mentioned what would happen in an earthquake, these legacy platforms that are servicing these companies, their match, the company's part of that matched doesn't come often for 75 days-
Josh King:
Right.
Jake Wood:
... after that request is submitted, 75 days. I ran an organization responding to disasters. I didn't know that money was coming. And oftentimes, our response would be over within that 75 day window. And then I'd have literally a mountains and mountains of checks matching gifts coming in that I didn't know I was expecting that are restricted to that disaster. What a massive pain in the what. But because of the way our platforms run, one, we're making these distributions electronically, two, the employee already has the match because it's already in their donor advised fund. They're not donating a hundred dollars to Team Rubincon and asking ICE to match it. ICE has already put that money in their account, so they're just sending 200, $200 to Team Rubincon.
Josh King:
So here on the floor of the New York Stock Exchange, Jake, we have been working and perfecting, for about 231 years, this wave for trades and data to remain a hundred percent transparent while also protecting the identity of both the end buyer and the seller. For Groundswell, why is separating both the company and individual employee from the contribution recipient an important part of your platform?
Jake Wood:
So one of the things that we've found is that some employees don't participate in their match programs. They don't have to disclose to their employer where they're giving. And there's probably two reasons why that might happen. The first one is the world is just extraordinarily polarized. And if you are the loan conservative in an otherwise progressive company culture, maybe you don't want somebody to know that you are supporting an organization that might lean conservative. The second one is a lot of people's philanthropies is deeply personal. If you're a recovered alcoholic and you support Alcoholics Anonymous each month with a donation, and you might not want HR to know that you're a recovered alcoholic, or you might be a closeted member of the LGBTQ community and you support issues in that area. So we just think privacy's really important. It's obviously a topic that's top of mind for a lot of people in 2023, as it has for the last five or six years as a trend. And we thought it was important to bring that layer of privacy to corporate philanthropy.
Josh King:
Looking at the end of the year and figuring out how employees for both pre-public, and in my case, a public company can limit my tax bill while I'm going to be helping my favorite cause.
Jake Wood:
Yeah. So one of the advantages of donor advised funds is it your single source of truth for all of your personal philanthropy. So if you route all of your donations through your donor advised fund, there's only a single receipt, tax receipt to track at year end. So that's really helpful. It's convenient for people to make a lot of different contributions throughout the year, or donations throughout the year. But the other thing is rich people don't donate cash. They donate appreciated assets. And it's really hard for a lot of people to donate stock to charities because a lot of charities don't have the capability to accept stock as a donation. But when you donate stock, you can take the full market value of that stock at the time of contribution without having to pay capital gains taxes on it. That's a significant personal finance hack for people that we've unlocked, which again, this is how rich people have always donated. It's time for everybody else to have an opportunity to do it, to the same.
Josh King:
So as we wrap up here, Jake, late last year, Groundswell partnered with Second Front Systems SaaS company led by Peter Dixon, who served with you in the Marine Corps. How is Second Front System... How do they use your platform? And what role generally do partnerships with other software services play in your own growth strategy?
Jake Wood:
Yeah, it's really fun to have my world's collide with Peter Dixon again. He was my platoon commander in Afghanistan. And listen, he's running a really exciting venture backed company in the defense tech space, keeping America safe. I think what he saw was his staff was growing substantially. They were trying to recruit. It's a competitive labor market out there. They wanted to differentiate their benefits to attract values aligned people. The second thing was I think that they realized they have a very diverse employee base. And Peter's one that's always wanted to give back and have an impact in the community. He wanted to democratize that, but he knew he had to do it in a way that empowered the diverse perspectives of his people. So they offer both a gift and match program internally. We love the participation rates we're seeing at his company. And frankly, he's one of many companies that we've brought on board to effortlessly launch or manage their employee giving programs.
Josh King:
And we've been focusing, throughout our conversation, Jake, on the ability to really transform a company's giving through technology like Groundswell. But what impact does actually implementing Groundswell have on retaining and attracting talent, particularly younger, more socially active employees?
Jake Wood:
Yeah, I think the data at this point is pretty irrefutable. Millennial and Gen Z talent, they want to have purpose in their work. It's different than previous generations in the workforce. And so they are looking not just to drive shareholder value. In the most common sense, they are looking to make an impact in the world. Frankly, I don't think a lot of them know what that means, and I don't think any company knows what it means. It's pretty hard to decipher, but the truth is you have to figure it out. If you want to be competitive in those demographics, I think Groundswell is a good step in that direction. Some of our competitors out there that have been in the space for 10 or 15 years have better data, larger data sets on retention.
And what that data shows is that employees who are engaged in corporate giving programs within the company are more likely to retain with that company over time. There's just an economic argument here. This impacts the bottom line in a very positive way. This is not just hitting the P&L with red ink. This can actually add value in your retention.
Josh King:
Jake, we've covered a lot of ground today. Just as we finish up, I just want to give you a chance to share any final thoughts with our listeners, and also let folks who would want to know more about Groundswell or Team Rubincon, find out more information about everything that you're doing.
Jake Wood:
First, appreciate the opportunity to come in and join you. And my challenge to your listeners would be this. There's no shortage of challenges facing the communities in which we work and in which we live. I think it's incumbent upon all of us to do our part, to make a difference to fund the solutions that are going to solve those problems. I think we can do that both personally and at a corporate level. If you'd like to learn more about Groundswell and how we can help, you can come to www.groundswell.io. Connect with me on LinkedIn. I'm pretty easy to find. And certainly would encourage you to think about supporting Team Rubincon, teamrubinconusa.org, doing tremendous work all around the world and in all 50 states here in the US.
Josh King:
Thanks so much, Jake, for joining us inside the Ice House.
Jake Wood:
Thank you.
Josh King:
That's our conversation for this week. Our guest was Jake Wood, the founder and CEO of Groundswell. If you like what you heard, please rate us on iTunes so other folks know where to find us. And if you've got a comment or a question you'd like one of our experts to tackle on a future show or hear from guests like Jake Wood, email us at [email protected] or tweeted us @icehousepodcast. Our show is produced by Pete Ash with engineering and editing from Ian Wolf. I'm Josh King, your host, signing off from the library of the New York Stock Exchange. Thanks for listening. Talk to you next.
Speaker 1:
Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties express or implied as to the accuracy or completeness of the information, and do not sponsor, approve, or endorse any of the content herein, all of which is presented solely for informational and educational purposes. Nothing herein constitutes offered to sell, a solicitation of an offer to buy any security, or a recommendation of any security or trading practice. Some portions of the proceeding conversation may have been edited for the purpose of length or clarity.
