Part 3: Shutting Down Pennies 4 Progress
If you have read Part 1 and Part 2, you know Pennies 4 Progress started as a student project at N.C. State University then scaled into a national fundraising platform connecting 1,000's of merchants with 10,000's of trusted charitable organizations and schools.
Unfortunately, two things happened that caused Pennies 4 Progress to shutdown.
First, our main partner, GoodLabs, shut down due to a lack of funding and revenues. Despite building a successful platform, the business couldn't support its growth. Small bugs became large problems. Reports couldn't be run and the app wasn't working.
This alone wasn't enough to shut us down. We have several months of runway left from our grant and we had proven this model would work. We explored ways to capitalize on the footprint we built with GoodLabs. We launched a prototype fundraising application for e-commerce companies, which gained some early traction with beta customers.
However, our funding was frozen because the grant was originally intended to only work with 20 merchants and raise money for schools in North Carolina. Since our project had vastly expanded beyond our city and our state, we were told our funds would no longer be accessible.
Our one paid team member was told he would no longer receive a paycheck from the grant so we were faced with the tough choice to close our doors.
The team learned a lot of lessons, some of the important ones are listed below.
Due Diligence Matters:
We trusted our technology partner to deliver but they lacked sustainable revenue models and faced scalability issues.
Find Smart Backers:
We relied on grants from foundations and universities, which are historically very risk averse. Even though we surpassed our wildest dreams, in terms of adoption by merchants and funds raised, we were unsuccessful at communicating our local impact.
Sometimes For-Profit > Non-Profit:
Great organizations are needed to solve a lot of problems in society but the problem we were solving would have been better approached through a for-profit entity that would have been able to raise significant investment from patient investors.