New bank challenger Spiral aims to facilitate charitable giving

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A new fintech called Spiral aims to harness the philanthropic side of Americans by allowing them to give to charity through their banking app.

The company said on Wednesday it has secured $ 14 million in funding led by global venture capital group Team8 and with participation from Communitas Capital, Phoenix, Nidoco AB and MTVO.

The funding, said Spiral CEO and co-founder Shawn Melamed, will help the startup launch its “ethical banking” service that allows clients to support charitable causes while earning monthly cash rewards and bonuses on their deposits. Spiral will match customer donations up to $ 150 per year.

“There are 1.5 million nonprofits in the United States and they’re run by amazing people who are trying to make an impact, help the homeless or cure cancer, and they have struggling to raise capital, ”Melamed said.

Spiral aims to remove some of the friction associated with giving by connecting donors with nonprofits, which have been hit by a shortage of in-person events that help generate funds, Melamed said.

“Most people would love to do good, but they don’t have a lot of opportunities to do it easily,” said Melamed, former head of technology and business development in Morgan Stanley’s office of innovation.

Nonprofits can use the Spiral app to share content with supporters and collect donations at no cost.

The challenger bank is currently testing its service in beta with 200 customers and has a waiting list of 20,000 customers, Melamed said, adding that it expects the platform to be fully launched at the end of May. Spiral’s FDIC-insured deposits are held at nbkc bank in Overland Park, Kansas.

Melamed said the digital bank plans to roll out a new product every year, starting with credit cards next year.

“We aim to become a full-service consumer bank, which means we can offer all kinds of loans, credit cards, personal loans, mortgages and auto loans, in addition to offering brokerage services in the future. and wealth management, “he said.

Spiral hopes to encourage customers to donate to charities through a reward system attached to their future credit card, as well as by offering competitive interest rates on loans.

Through a search engine feature in the app, customers can locate and donate to charities in their area. They can also donate to any of Spiral’s nonprofit partners including David Ortiz Children’s Fund, Culture for One, HERHealthEQ, Cerebral Palsy Alliance. Research Foundation and Boys and Girls Clubs of Metro Baltimore et al.

Spiral’s partner charities provide users with content such as images and videos that show where their donations are going.

“We believe that if you present compelling content to customers and quantify what their donation has done, they can go from your one-time donation to becoming monthly support,” Melamed said. “This is really the mechanism to level the playing field for all nonprofits, giving them direct access to capital and direct access to engage with our donors.”

Other challenger banks market financial services with opportunities to support social and environmental causes.

Ando, ​​launched in January, promises to invest clients’ money in carbon reduction projects such as clean energy, sustainable infrastructure and regenerative agriculture.

Suction bank allows its debit card customers to round their purchases to the nearest dollar, and the remaining pennies are used to plant trees.

Challengers such as Greenwood and Cheese target racial wealth disparity by offering services that support Black, Brown and Asian communities and businesses.

“What motivates us, besides building a super profitable bank that is high growth and that hopefully will go public someday, is to really make an impact,” said Melamed. “Just like what Amazon did for consumer one-click, this is what we’re trying to do for charitable giving.”

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