Matt Pfaltzgraf - A Founder Story
Matt Pfaltzgraf is the 33-year-old Founder and CEO of Softgiving, a FinTech startup that creates alternative recurring fundraising solutions for nonprofits to help them bridge the gap to the next generation of donors. By designing innovative fundraising technology, Softgiving enhances the relationship between nonprofits and their donors by revolutionizing the way people can give. Softgiving’s innovative technology integrates seamlessly into any donors lifestyle and creates passive revenue for nonprofits. On average, annual donor attrition for a nonprofit is roughly 55% however, with Softgiving’s technology nonprofits retain over 90% of their donors. In less than two years, Softgiving has grown into a team of 11 that have worked diligently and successfully signed on international nonprofits like World Vision and CARE. Matt’s mission to help people give more to great causes was born of personal experience and very humble beginnings.
IN THE BEGINNING
Growing up in Iowa, Matt and his older brother had a father who was a brilliant international food scientist whose tragic addiction to meth eventually eroded his career and his relationships. In the 4th grade, Matt’s parents divorced when his father’s behavior became more irrational. Over time, Matt and his brother watched their father constantly lose jobs until he eventually passed away. Having a parent who struggled so profoundly with addiction meant there was always a level of stress in Matt’s early years and a household with minimal income.
Despite the chaos his father created, Matt describes his childhood as an adventurous, caring, and very formational one due to his mother. Ultimately raising her sons on her own, Matt’s mom worked full-time as an Administrative Assistant while attending a local community college. Matt’s care and respect for her are apparent. In his words, “I had a bedrock of a mother. She has always been incredibly consistent, caring, and loving, beyond any person I’ve ever known.” The resources in Matt’s community along with his hardworking and loving mother created a stable and supportive environment for Matt and his brother despite their circumstances. With inconsistent child support payments, funds were limited and Matt’s family relied heavily on nonprofit services throughout his childhood. Organizations like the Boys & Girls Club and YMCA ensured he and his brother had a safe place to go before and after school. They received used bikes, furniture, and clothes, including the tie he wore to his first job interview, from nonprofits like Goodwill Industries and The Salvation Army. In his words, “Nonprofits allowed us to have a normal childhood despite the challenges we faced.”
HIS FIRST JOBS
Matt marched to a different tune than most of his school friends. At a young age, he was often working multiple jobs. His first job, at 11-years-old, was delivering newspapers with this brother every week. Together they made $20/month combined. By the age of 13, he worked on local farms detasseling corn. Legally not allow for his age at that time, it was backbreaking work. Matt would walk through waist-high water, work through horrible storms, and would arrive home covered in mud. When he turned 14-years-old, Matt became a dishwasher at a pizzeria and after a few years eventually become a cashier at his local Home Depot. As a soft-spoken, introverted, and laid back kind of guy, Matt decided to step out and be the leader he knew he was. As Matt says, “I’m very patient but I am always looking for opportunities. I’m constantly evaluating what’s around me. If something excites me, I go above and beyond, but I can’t feel like I am just part of a process, then I don’t apply myself fully.”Academia was not a place where he applied himself. In his words, “I was a horrible student. I never got A’s or B’s, a C was a solid grade for me. I was capable but just wasn’t interested. In my classrooms, my teacher would always move my desk away from the window because I was easily distracted.”
While Matt floated through school coming up with creative ways to pass classes, he didn’t stop looking for things that caught his interest. And, when he did find something he went after it. During Matt’s senior year of high school, his mom had a connection that gave him the opportunity to apply for an internship at the Governor’s office. He knew his academics wouldn’t land him the job, but Matt had grown up listening to Rush Limbaugh and watching C-SPAN when he accompanied his Dad on sales trips. His interest in politics and news led him to stay informed and Matt started reading newspapers avidly at a young age. He learned professionalism from watching his Mom. By the time he reached high school, Matt could speak intelligently about impeachment proceedings and local politics. In his words, “I killed that interview. I was the only high schooler there, and I was the one that landed the job.” Matt’s incredible work ethic combined with his independent childhood created a very intuitive and ambitious young man who had a unique approach to creating opportunities and success in areas that interested him.
DISCOVERING HE COULD LEAD
During Matt’s senior year of high school, the annual ‘unofficial’ student Senior Bash lost their venue and was in danger of being canceled. This quiet student who had hung back and worked long hours decided to take the lead on executing the whole event. He started by looking at what did and did not work in years past, made vast improvements, gathered a team, laid out every detail of the logistics, and even created a caravan to a secret location. Matt ended up throwing the most epic party the school had seen, and when he walked into graduation rehearsal the next day he got a standing ovation from part of the student body. In Matt’s words, “That was the moment I learned that true leadership wasn’t just for someone else, it was something I could do myself, and do it well.”
After graduation, Matt attended a few colleges until he eventually landed at the University of Iowa. And while he studied, he never stopped working and looking for things that interested him. From an internship in Washington DC as a congressional intern, to a summer job as a janitor cleaning emergency rooms, Matt hustled to make tuition and went after things with hyperfocus and determination. For example, Matt tried out for Mock Trial and was rejected, but he decided to start showing up to practice sessions anyway. They eventually caved and let him on the team where he ended up becoming Captain and leading them to win a tournament that year.
MAKING POLITICAL HISTORY
Matt also continued to dabble in politics. He heard about a movement to change the bar entry age to 21 in his city, so he decided to run a ballot initiative with local bar owners to keep the entry age at 19. He broke early voting records and won that initiative by placing voting booths in student areas to register and vote at the same time, which led his campaign to be victorious.Matt then noticed the school was promoting alumni credit cards and decided to investigate. He leveraged his position with the student government to ask for the credit card contracts and ended up unearthing a scandal that exposed the University as running predatory marketing on behalf of credit cards in exchange for money to go to the athletic department. What Matt uncovered went all the way to Capitol Hill, where Matt was called to testify in a special hearing in front of the Government Oversight Committee. Iowa became the first state that universally banned credit card marketing to students. As of 2009, that is now federal law through the Credit CARD Act.
One of Matt’s friends mentioned her mom was stepping down as State Representative for Iowa and suggested Matt should run- so he did. At 22-years-old, Matt won the primary and while he didn’t win the election in the end, he did receive the most votes in Iowa state house history for the candidate who did not win. As a 22-year-old, Matt received 46% of the vote despite running against a well-established candidate.
ENTERING THE TECH WORLD
Matt never actually went back to receive his degree and after a couple of years of political consulting, Matt wanted out of politics and government. In his words, “I wanted a real job.” So he applied at SHAZAM for an ACH product management position. Matt confessed, “I didn’t actually even know what it was. I was googling ACH throughout the phone interview. But, I got the job. Then I made it what I wanted it to be.” Matt quickly gained expertise and became hyper-involved in National Automated Clearing House Association (NACHA) boards as a fresh young voice.So what did this crazy life path teach Matt about being an entrepreneur? In his words, “I learned through all these different areas that no one knows what the hell they are talking about and we’re all just kind of making it up as we go. There’s no “right”’ way of doing things. I feel like most people spend the majority of time looking at the side of them improving on the margins. But what I did (and do) is look closely at something then I think if I could start from scratch and build fresh, how would I start? How would I do it? I always do things on my own terms. I want the most appropriate strategy for the problem. I don’t want to do it how it was already done.”
BECOMING AN ENTREPRENEUR
In June of 2016, Matt quit SHAZAM and finally decided to start his own company. While he didn’t have the plan quite yet, he knew it would be in the nonprofit space that had influenced him so strongly in his childhood. Six weeks later, Matt launched Softgiving.In July 2016, Matt received his first commitment of pre-product investment from a contact he had made at SHAZAM. However, it was a verbal commitment only and no check was written yet. The investor lived in Georgia, so Matt moved down to Atlanta to show his dedication to the idea. Matt says, “I loaded up my car with a couple of baskets of clothes, moved in with a stranger, and spent the next few months trying to convince that investor to write the check.” Eventually, he landed that $100,000 and Matt hired a development group to produce his first product. According to Matt, the first build didn’t go well. Often with any product or software development, the project went way over budget and time. But, Matt didn’t give up. He was able to obtain more investment funds to pay the previous developers off. In the fall of 2017, Matt brought on a whole new team to rebuild the software from scratch, and this time it worked.
By the beginning of 2018, Matt had hired his first in-house developer, stabilized the product and company, and began to build a team. His first Business Development Rep (BDR) started cold calling leads with no marketing materials or support. A cold call is what landed World Vision, and that BDR is now Matt’s Co-Founder, Chip Harden.You can’t find a Founder or team who is more committed to building something with pure strategy, sheer will, and who is equally passionate about the mission and purpose of their work. Softgiving is creating a balance between healthy capitalism and charitable giving while genuinely pioneering consumer philanthropy. They are disrupting charity for good.
In Matt’s words, “The idea behind Softgiving is not based on some crazy technology, it’s based on people’s interactions with their finances and the organizations they care about. It’s about being able to find the correct fit to enable people to give more while having a bigger impact.”But it wasn’t an easy path to get here. In Matt’s words, “It was a slog. Most of 2017, we were under $10k in cash-on-hand. It was survival, truly holding on until we could catch our break. The good news is that so many assumptions we made came to be true about how we thought donors would interact with our software. Investors are now presenting themselves to us, instead of us solely chasing them, 30% of donors signing up had never donated before to nonprofits. And it’s recurring, so this is huge for them and us!”
Softigiving’s reachable market has grown from a few thousand donors, at the beginning of this year, to nearly 10 million today. Their big vision is to be at the center of all philanthropic giving, both personal and enterprise. Matt wants to be at cash flow positive by early next year and they’ve got a fighting shot to do it. In his words, “I can’t write code, I’m not a great salesperson, and I’m not super organized. But what I do well is lead. I find great people who share my passion and vision and then I give them the freedom to make it happen.” The Softgiving team has created a better way for people to give and for nonprofits to grow by making giving a regular part of everyday life. Not many startups’ success has quite the ripple effect of goodness that Softgiving does. As for Matt? Today he is grateful, excited, and energized. He is leading a team that is truly making a difference. They believe that together we can do a lot with a little. And so do I.To learn more about Softgiving, check out their website here.