When I first heard that CMDI’s Erik Nilsson was taking to C&E to launch a broadside against Rally.org and was lumping us in with one of the biggest brands in the world (PayPal), I smiled. Then I read his piece, and found myself perplexed and exasperated.
Erik’s piece was so full of inaccuracies and misleading half-truths, Factcheck.org would have a field day. I’m surprised that someone from a company that we’ve worked with so well with in the past would be attacking us. I’m not going to respond to every charge leveled in Erik’s piece, but I do want to debunk a few of the biggest distortions.
First and foremost, here’s what you should know about Rally.org: We were the largest online fundraising platform for political campaigns and advocacy organizations in the last election cycle. We serve candidates throughout the country, at every level, on both sides of the aisle. From the presidential race to school board contest, candidates and advocacy organizations are raising millions of dollars using Rally’s social fundraising tools.
And while the company's roots are in politics, Rally powers fundraising for all types of causes aiming to amplify their purpose. For example, Rally is currently being used to raise money for a foundation for families of fallen soldiers. We're also helping a child with an inoperable brain tumor and a family that has lost everything in a fire. We focus on empowering campaigns, causes and individuals to share their stories with tools they've never had before. We want to help our users change their world.
Now a few facts in response to some of the points Erik raised.
Charge: The donations are not really your funds.
Fact: The funds that pass through our settlement process are not ours. In fact, this would be illegal.
The intended recipients of funds are the Rally.org account owners. Our company has worked closely with money-transmission law experts and is in full compliance with regulations determined by various banking commissions to act as an agent to help our users collect and process funds.
Charge: You don’t receive your donations when the donor’s card is processed.
Fact: When a campaign raises funds, they get their earnings as fast as the banking network allows. Our users are not waiting for weeks or months on end to get their cash.
Furthermore, Erik implies that any organization can simply “walk up” to a payment gateway and get their hands on a merchant account. This is inaccurate. In fact, it’s one of the biggest reasons we’re in business today – the process is far more complicated than he attempts to make it sound.
By acting as a master merchant, we take headaches off our customer’s plate, such as the complexity of holding reserves, interchange rates, and other stringent requirements that would make an MBA from Stanford cry.
Charge: Aggregators are more expensive than merchant accounts.
Fact: This is comparing apples and oranges. You pay for what you get. Rally.org is far more than just a payment gateway, we’re a platform with tools and services specifically designed to help our users raise money and tell their stories as effectively and efficiently as possible. There is also no setup fee, no contract, and no monthly charge to run a campaign on our platform.
Charge: You lose control of chargebacks.
Fact: Rally takes the burden of chargebacks off of campaigns. This is a hidden value we offer our users. Our team focuses on building and standardizing reconciliation tools to help our users deal with refunds, chargebacks, and other compliance items. We’re moving tens-of-millions of transactions, so we’ve built systems to grind through this cumbersome process in real time. It’s a battle in a world of donor remorse and never-ending telephone calls with banks and processors, but it’s a battle that we choose to fight for our users. As a result, at Rally, we have some of the lowest chargeback rates in our industry. We don’t make money until our users do.
Charge: Aggregators withhold a portion of your funds to compensate for fraud and unanticipated chargebacks.
Fact: We have an entire team that spends countless hours evaluating every transaction that passes through our system. Anyone issuing a customer a merchant account does the exact same thing – it’s an industry standard to hold some portion of funds in reserve. If anyone thinks that folks who issue merchant accounts are any kinder on reserves and fraud protection, they’re mistaken.
Charge: The aggregator’s name appears on your donor’s credit card statement and thus donors don’t have any idea what it is for, which causes chargebacks.
Fact: Most transactions do include a user’s organizational name. It’s called a secondary descriptor. Here’s the challenge: many banks are operating on ancient technology – and many don’t support secondary descriptors on card statements (yet). This is an industry-wide problem, but one that a consortium of card and payment companies are actively working to fix. But the bottom line is that at Rally, we have some of the lowest chargeback rates in our industry.
As the three-time winner of this organization’s Reed Awards for online fundraising and technology, Rally.org has built something very different from CMDI – or Paypal for that matter.
CMDI has built a terrific engine for managing complex federal and state compliance issues. We’ve enjoyed collaborating with them in the past on what they’re best at.
Rally.org, on the other hand, has built a complete hybrid vehicle. We have a lean, fast, effective and, I’m proud to say, really attractive vehicle for fundraising and storytelling. For rallying.
I’ve followed the work Erik did at Fundly, where he used to work as founder. It was a competitor to Rally, but he left the world of social fundraising and joined a long-established player in party politics and campaigns. I wish him well, but I wouldn’t want to be selling those tools in the era of social-powered, story-based online engagement and fundraising. That’s the crowdfunding world that Rally.org is dominating in, and others are following.
For lots of good reasons.
Tom Serres is the founder and Chief Rally Officer for Rally.org, an online fundraising and storytelling platform that allows users to raise money and build awareness for the causes that they care about. Prior to founding Rally.org, Tom was the founder and director at Texas Ventures and the founder and CEO at Piryx Inc.