Think about how much stuff you have. Are you at your desk? Open the drawer next to you. What’s in there? Do you really need all that stuff, or is some of it just taking up space? Is any of it electronic stuff? Any old cell phones or chargers for cameras that broke? What about CDs or DVDs for old operating systems? Does your computer even use those anymore?
There’s value in all that stuff. Los Angeles-based startup KarmaGoat is working on capturing it, and then giving you 900 ways to give it away to charity. Sell your excess stuff online and donate the proceeds to the cause of your choice. It’s just an experiment for now, friends exchanging things with one another. But lots of folks are buying a new phone every year. What do they do with the old ones? If KarmaGoat can scale up, all those phones could be re-sold as a swarm of little mini-fundraisers for any of almost 1,000 causes (so far).
Who Needs All This Stuff?
Homes are full of excess stuff. Not everybody has excess stuff, of course. Not everybody has homes. But an economy driven by consumption generates, in the aggregate, lots of discarded stuff. Clothes, plates, CDs, books we’ll never read again, loose leaf paper, the wrong brand of something or other we bought by accident at the grocery store. All of this has resale value. We could just re-sell it ourselves and keep the money. But that would take work. Sometimes, it’s worth it. iPhones re-sell for lots of money. Other times, it’s too much trouble. In that case, it’s a sunk cost. But that’s wasteful, and consumers could put this waste to use.
For RWW readers, gadgets are an easy example. We probably have more gadgets than the average bear, and even old gadgets are worth something. Not just in raw materials, recyclable things, spare parts. We have phones that would work. Somebody might need that restore disk. Classic iPods are the best. I’m sure somebody would pay good money for some of that. But it’s just sitting there, right? It’s no loss to you. It might only fetch $9.88, anyway. Why not donate the proceeds to a good cause?
When KarmaGoat is ready, it could help us do that on a grand scale.
“KarmaGoat is an online marketplace where you transform your stuff into the stuff people really need in the world,” says founder and CEO Jonathan Lehmann, “like drinkable water, medical kits, school supplies, or a goat.” The Heifer Project – which donates livestock to people in poverty, providing them a living, breathing economic lifeline – is one of KarmaGoat’s founding partners, hence the name. KarmaGoat lists almost a thousand causes to which sellers can donate their proceeds, and users can submit their own.
Meeting, Buying, Selling, Giving
Sellers list items on KarmaGoat with a photo, description, location and price, as well as their chosen charity. The KarmaGoat marketplace operates on what Lehmann calls a “meet-and-buy system.” It’s a two-step purchasing process. On an item page, the button under the price says ‘Meet & Buy.’ Clicking prompts the buyer to enter credit card information, but the card isn’t charged right away. Instead, the buyer receives a password – “like, ‘sillyrabbit,'” Lehmann suggests – and then arranges to meet with the seller. If the item meets the buyer’s expectations, the buyer gives the password to the seller, who then enters it on KarmaGoat to complete the transaction.
Users are protected from fraud, and payments go straight to the seller’s chosen charity. KarmaGoat keeps 15% of the transaction for itself. It’s a for-profit enterprise. But 85% of a transaction made possible by KarmaGoat goes to the charity of the seller’s choice. Proceeds are paid to charities in one check on the 15th of every month.
Once the company gets out of startup mode, KarmaGoat plans to draw up legal arrangements to make sellers’ donations tax deductible, but the necessary legal expertise is out of reach for now. KarmaGoat says that’s its “utmost priority” for the next phase.
KarmaGoat accepts payments from all major credit cards using Authorize.net, a company owned by Visa. “We’re using all the industry-standard security measures to keep our users’ information secure,” says James Chung, head of technology and product. Chung worked for mobile retailer LetsTalk.com for six years, and he brings that experience with online payments and security to KarmaGoat.
The service connects to Facebook’s Open Graph to pull profile pictures and info, as well as to share the social activity of buying and selling old stuff with friends. Hawking a used Xbox for charity on Facebook is also a great way to promote one’s cause of choice. On the KarmaGoat side, the Shop Now page lets users filter for items their friends are selling, as well as by category, cause, price and location. On the MyKarmaGoat page, users can view their friends on KarmaGoat and browse their causes.
“The idea was to make this an experience among friends and other well intentioned, like-minded individuals,” Lehmann says.
The site lists over 900 causes, and it allows users to submit more for the KarmaGoat team to add. People affiliated with the organizations can also control the content on their KarmaGoat cause pages. The Causes page offers browsing by category and features a menu of the causes added by community members. It also displays 12 featured charities chosen by the team, including KarmaGoat’s three founding partner organizations.
Meet The Partners
In addition to the Heifer Project, KarmaGoat has two other founding partners. One is the United Way of Greater LA, which fights poverty in the Los Angeles area. It hosts an annual event called HomeWalk, which LA Lakers star Kobe Bryant is helping to sponsor this year. KarmaGoat and the United Way of LA are exploring the possibility of a drop-off donation system – as an alternative to meeting and selling – to support certain kinds of causes.
The other founding partner is the Somaly Mam Foundation, which fights human trafficking and sexual slavery. Somaly Mam and KarmaGoat recently teamed up for a fundraiser in Los Angeles, and they’re working together on KarmaGoat’s first celebrity campaign, which is yet to be confirmed.
United Way of Greater LA’s 2011 video
The idea is to get celebrities to sell their regular old stuff on KarmaGoat for charity at a fixed price – rather than the typical practice of selling their collectibles at auction. This isn’t intended as a primary source of fundraising, but rather as an inspiration to get everyone to sell their stuff to benefit the same organization.
With these key partners, KarmaGoat is brainstorming and getting some marketing advice. It’s also reaching out to their existing donors to encourage them to use KarmaGoat to support the causes they care about.
Reaching Into Closets, Not Wallets
KarmaGoat’s focus for now is developing the best practices for a local, in-person marketplace before expanding. There’s no formal process in place for shipping items and the refund hassles that might be involved, but that’s because the team is focused on building a good user experience and culture in a close-knit market first.
KarmaGoat was founded on the UCLA campus, and university populations are its first target market. The site launched in beta on May 19, and UCLA students are its testers. Anyone anywhere can use the site now, but the active community of buyers and sellers is at UCLA, and that’s where the team is developing the service and its features for now.
“College students are passionate about causes,” says Chung. “They might not have cash to donate, but they have stuff. Instead of reaching into their pockets, into their wallets, they can reach under their beds or into their closets to find stuff to donate and raise money.”
Students on campus are also a concentrated population. Lehmann adds that close proximity enables students to easily meet up and exchange the textbooks, furniture, gadgets and other stuff they’re already used to buying and selling all the time. The tight-knit campus environment helps KarmaGoat build a culture around donating excess stuff this way.
Once KarmaGoat, along with its initial partners and student testers, figures out the model that can have the most impact, it plans to expand its marketing message to “be everywhere.” It can be used by anyone already, but the company is focused on developing local marketplaces to figure out how best to expand its formal presence.
Burning Man Values
KarmaGoat was inspired by the gifting culture of Burning Man, which is a playground for a large and growing portion of Web workers. The desert festival is built upon ten core principles that serve as guidelines there, and the principles of gifting and decommodification underlie KarmaGoat’s values.
“Burning Man is a theater that can represent many experiences in your life,” Lehmann says, “and one of the great wealths for me of the Burning Man experience is when you’re able to reproduce [its values] outside in the real world. I’ve always like giving gifts and getting gifts, but before Burning Man, I never gave a gift to a stranger. This is something I discovered there.”
“KarmaGoat hopefully will be this experience adapted to our existing online world,” Lehmann says.
Where’s My Goat?
KarmaGoat has a knack for social media, and the team uses Facebook and Tumblr to spread its message. There’s a great photo album on the KarmaGoat Facebook page called “Where’s My Goat” that shows off the KarmaGoat SillyBandz all around the world. The KarmaGoat Tumblr shares new causes, beautiful photos, general nonprofit news and more. The goat also tweets as @karmagoat (baaaaaa).
Be sure to follow KarmaGoat and stay tuned. This is the kind of Web startup that can change things on and offline. High technology is churning through our stuff every day. New devices replace old ones, or they replace dozens of paper books we don’t have to lug to our next apartment. CDs are becoming vintage. There’s all kinds of stuff we could give away that’s still valuable to someone. And donating old stuff to charity through KarmaGoat does give something in return: the gift of having less stuff.
Burning Man photo credit: Josh Adler