Last month, LendUp hosted a panel and brainstorm session with tech innovators, social impact changemakers, and nonprofit professionals from the San Francisco Bay Area. The evening began with a conversation centered on the intersection of social impact and technology, with panelists from LendUp, Hustle, Mission Economic Development Agency (MEDA) and the Bill and Melinda Gates Foundation. We then held a hands-on, collaborative session to brainstorm solutions for a challenge faced by MEDA.
LendUp invited MEDA to be its spotlight nonprofit for the evening, but the relationship with MEDA didn’t start there. MEDA has been a valuable partner to LendUp’s credit card team, helping to connect them to actual consumers for research on early prototypes. And this event was LendUp’s turn to help MEDA address a challenge it’s currently facing.
As a direct service provider, Laura Ospina-Jaramillo shared that MEDA is more of a high-touch than high-tech organization -- most interactions with clients are in-person. They rely on volunteers and interpersonal relationships to meet the needs of their clients. But, it’s also about timing. One of their programs is a comprehensive financial coaching program, where clients meet one-on-one to create and achieve financial goals. Tax season, as you might imagine, is a big entry point. When clients are coming to do taxes, they can recruit participants for their other programs, like the financial coaching program.
MEDA’s challenge, then, is to improve retention for its financial coaching program. A year-long program, clients are scheduled to check in with a MEDA coach every 3 months. The goal is for clients to come to 4 follow-up meetings in the calendar year. However, the reality is that the average client only attends 2 follow-ups. Sharpies, sticky notes, and creativity on full blast, teams brainstormed ways to keep clients engaged throughout the year and increase attendance.
By the end of the evening, one of the teams came up with the “winning solution” -- in their own words, “a relatively low-tech, but community driven solution.” They recommended a two-fold approach: 1) an intake survey of client financial needs and expectations for coaching coupled with 2) monthly peer-client meetings on client-driven financial topics. With monthly meetings, the hope is that participants will be more likely to attend quarterly 1:1 coaching follow-ups, and MEDA would be able to build a stronger community.
Why was this team’s solution chosen? This idea was simple, low-cost, and realistic, making it easy to implement within MEDA’s limited budget. It also allows client needs and services to be aligned, with expectations being set upfront. MEDA also appreciated the team’s correlation between client engagement and MEDA’s capacity to understand their needs. And MEDA can leverage the survey as a tool to evaluate their ability to meet client needs over time.
So what’s next? MEDA has already started by training new staff to focus on the intake of financial needs and expectations. And they’re building a robust list of financial topics for the peer-client meetings, to be led initially by MEDA staff.
In addition to the solution for MEDA, there were a few key themes coming out of the panel conversation:
1 - Mission and profit: more compatible than you might think
This seems to be one of the most burning questions in social innovation, particularly for those of us who work for venture-backed startups. But, the list of for-profit companies that are making an impact through technology and a commitment to customers’ wellbeing is growing. The trick is to ensure that social impact is embedded not only in the business model but also in major business decisions.
Tim Lucas, a panelist from LendUp, shared how LendUp holds itself accountable: “it’s less of a challenge to balance mission and profit when the business is focused on building a partnership with its customers. LendUp serves the 56 percent of Americans who are new to credit or trying to rebuild it. Our customers are struggling to get out of debt and we’re here to help them do that. There are so many lenders that are instead trying to take advantage of that.”
And Jean Pembleton, a panelist from Hustle, spoke about the importance of attracting diverse and “mission-aligned talent from a variety of backgrounds.” She shared: “We have many people who have worked in the nonprofits that Hustle supports, and many who don’t come from traditional tech or client success backgrounds, such as myself. We’re also proud that 51 percent of our company is women and 37 percent of our company identifies as individuals of color. For us, it’s important that we’re reflecting our commitment to our clients in our hiring. A few examples of our clients include Bernie Sanders, Planned Parenthood, most of the major labor unions, as well as nearly 50 universities and many K-12 institutions.”
2 - Metrics make us, keep us on track, and matter to investors
We all know that metrics matter. For nonprofits, they ensure that funding dollars are going toward maximizing impact for clients. For for-profits, they help keep the lights on, and then help grow the business to expand its reach and impact. But as a for-profit evaluates these business metrics, it must monitor and find ways to improve its social impact metrics.
As a socially responsible investor at the Bill and Melinda Gates Foundation, Kimberly Marshall focuses on investing in “innovations that improve outcomes for first generation, low income and and underrepresented minority students.” She shares that “when we’re talking to an edtech startup, we are interested in the impact they’re having on student success outcomes -- for example, graduation rates and time to graduation. We also sometimes engage external impact evaluators to ensure consistency across data. The nice thing about working with edtech startups is that like all technology companies, they track everything.”
And for LendUp, Tim Lucas shared that: “investors and backers understand that we’re partnering with our customers to help them improve their financial health. The bet became whether we would gain the trust of our customer to forge a partnership for life. So balancing mission and profit is a longer play. Our recent milestone of $150 million in savings for our customers is a perfect example.” In addition to cost savings in interest and fees, LendUp tracks credit score improvements, financial education courses taken, and financial health using a financial health framework developed by the Center for Financial Services Innovation (CFSI).
3 - The more we connect, the more we can learn from each other
The evening reminded us that there is a lot that we can learn from each other, and the more we talk, the more potential we have to help each other maximize social impact. The potential of public / private and nonprofit / for-profit partnerships cannot be understated. This is no different in the technology sector. Technology can play a pivotal role in addressing social issues, however it’s not a solution on its own. Technology is an enabler.
This is why LendUp is always looking for other organizations to help deliver on its promise to its customers. One example is LendUp’s partnership with The Aspen Institute’s Financial Security Program to launch Finance Forward, a multi-city event series to bring together key stakeholders to discuss the complex issue of income volatility. This is just one example, but it underscores the opportunity we all have to work together, which our friends at CFSI further champion.
We should all connect more. And we’re pretty confident that our panelists and participants would agree too.
If you’re interested in supporting MEDA, you can sign up to mentor youth in tech literacy through the Mission Techies or volunteer during tax season through the VITA free tax preparation program! You can also reach out to learn more about this pilot program.
Stay tuned for more events and industry insights from LendUp. And if you’re interested in partnering with LendUp on its mission to help anyone on the path to better financial health, reach out at socialimpact(at)lendup.com.