SEATTLE, Wash. — When Minda Brusse co-launched the venture capital firm First Row Partners at the beginning of the year, she and her business partner Yoko Okano were going hard when a pandemic shift in the world caused major pause.
"I think we went into a phase where we were just sort of like, 'What are we going to do?'" recalled Brusse.
The pandemic left many people wondering how they could help. It's not like they could fill a sandbag or meet in person or fight COVID-19 in the same way communities rally together for a natural disaster. Brusse sat at home happy, healthy and safe but with a nagging question: how could she directly help people?
The startup entrepreneur started investing in an idea to provide direct payments to families. She connected with Alex Iskold, a venture capitalist based in New York to form the $1k Project, a volunteer-led initiative to give families $1,000 a month for three months. The program matches families in financial distress with people who are willing to sponsor them. Donors can also make smaller contributions.
"It's faster if it's just person-to-person," said Brusse.
She said she wanted to give people another option than going through an institution that may not be able to adapt quickly to a situation that's failed to exist before. Tech entrepreneurs, engineers, and designers have banded together to help bring the project to life.
The $1k Project works because of a network, said Brusse. For example, small business owners might want to nominate a person they laid off during the pandemic. Then that family can nominate someone else. It becomes a trusted network of people instead of a group of people sending applications and uploading personal information. GoFundMe is a partner to the program, and once a family is selected, a private account is created that helps anonymize donations.
"Instead of asking people to upload pay stubs and do all sorts of complicated identity things, which honestly just creates more barriers to help, we decided to work specifically with small businesses to have them nominate and refer past employees," said Brusse. "What keeps these small business owners up at night is what has happened to the people they've had to let go or furlough. They're devastated by their own businesses, but they're more devastated by knowing the human impact that closing their business has had on those employees and that now they're in these situations. So, they've been very responsive in wanting to nominate people that have worked for them."
The project has already helped 339 families with the support of 347 sponsors across 39 states. GoFundMe has helped process $1 million in donations, according to the group's website. And even though the group is run solely on volunteers, Open Collective has been sheltering the project as a non-profit to enable it to receive larger donations.
The architecture of the $1k Project is innovative because it creates a scalable model for a trusted network to facilitate direct giving. Brusse said many people want to support organizations at their galas, but there is a growing desire for people to see their money directly impacting a cause.
Whether the $1k Project evolves into a bonafide non-profit or a group, will be up to Brusse, a new investor, who clearly knows how to evaluate risk and reward.
"We first really always want to ask ourselves, are we relevant? Because if we're not, then we don't need to exist," said Brusse. "But we continue to find that what we're doing is incredibly needed and relevant. And that the model that we've created is something that people are really attracted to--so that is kind of inspiring us to think more long term."
Coronavirus: Your Money, Your Future
Do you have a question or concern about money during the coronavirus pandemic? Email us at email@example.com.