Lenfest Foundation Chair Keith Leaphart’s startup Philanthropi raised a $4 million seed round to expand its “401(k) for philanthropy” platform.
American Express’ investment subsidiary Amex Ventures led the seed round. David Adelman's Philadelphia investment firm Darco Capital and Live Oak Ventures, a subsidiary of Wilmington, North Carolina-based Live Oak Bank, also participated.
“It was really about finding a partner that we felt was both a value add but also values-aligned,” Leaphart said.
Philanthropi lets consumers start their own personal foundations to support charities and nonprofits of their choice. The startup allows consumers to donate parts of their paychecks to nonprofits through their employers or banks much like with a 401(k), Leaphart said. Donors get access to tax benefits, and then they can manage and track their donations through Philanthropi’s dashboard.
Leaphart got his start in philanthropy after working with Gerry Lenfest, the late media executive and attorney. Lenfest donated tens of millions of dollars to causes in Greater Philadelphia and beyond throughout his lifetime, including to Abington Memorial Hospital, the Curtis Institute of Music and the Museum of the American Revolution. Leaphart now heads up the foundation bearing Lenfest's name.
Philanthropi was founded in 2018 and launched its platform in 2019. After the Covid-19 pandemic hit in 2020, Philanthropi added an employee hardship fund option to its platform so coworkers could support each other in times of need, Leaphart said. This year was focused on scaling the platform.
The startup now works with 14 employers, including WSFS/Bryn Mawr Trust and First Round Capital, Leaphart said. He declined to share revenue figures. The company’s revenue streams are subscription fees for nonprofits that are on the service and a payment gateway fee.
The startup will use the new funding to expand its technical team from three to about 13, Leaphart said. Philanthropi has 19 employees working across technology, marketing and operations.
Amex Ventures is always looking for founders and companies building solutions to longstanding problems for its customers and cardmembers, said Harshul Sanghi, founder and global head of the firm. Amex customers have committed over $100 million to charities over the last decade through an American Express program, so Philanthropi was a good fit, he said.
“We really want to make it a part of people’s everyday lives, rather than the sort of episodic giving that happens around a specific season or event,” Sanghi said.
Leaphart’s experience working in “big philanthropy,” where only billionaires could be philanthropists, shaped his vision for building the startup. Corporations and foundations are good at marketing their donations, but it’s the everyday individual philanthropist that makes a difference, Leaphart said.
The largest source of charitable giving in 2020 was from individuals, representing $324 billion, or 69% of total giving for the year, according to the National Philanthropic Trust.
“There’s a huge misconception around the drivers in the market, and it’s not super high-net-worth people driving philanthropy,” he said. “It's lots of small dollars on lots of different charities.”
