Gamification has already revolutionized how many people interact with learning and working, but it hasn’t always been clear how broadly the concept to apply to the business world. To understand how gamification has helped businesses and average people alike participate in conscious capitalism, we spoke with Rob Sobhani, founder and CEO of Sparo.
ABERMAN: I’d like to ask: how does Sparo work to make not-for-profit giving more compelling? And how did a foreign policy expert become an entrepreneur in the first place?
SOBHANI: I want to address your last point first: you said, how does an entrepreneur go from academia to entrepreneurship, right? And I’ll tell you a little story: I was in Azerbaijan after the collapse of the Soviet Union. The whole health care system had fallen apart, and the president said, I need inoculation for our kids. And so, I contacted an oil company that was interested in doing business there.
We leveraged a hundred thousand dollars, and inoculated all the children in that country. That sparked in me a nugget that said, companies that do good can actually benefit, and there is a double bottom line. You do good, like Toms does every time you buy a shoe, and you’ll see the rewards. Jeff Bezos is doing it with Amazon Smile. Sparos started with this notion that if companies truly put giving at the center of their fundamental business, they will see results in the double bottom line.
ABERMAN: When you say double bottom line, another word I hear to describe this is conscious capitalism. The idea that, if you have a business that focuses on serving the broader community, it actually helps with your branding, and also helps with how people feel about it. I heard recently that companies that practice conscious capitalism actually outperform their peer companies in the S&P, for example. It’s very compelling, but how does your company, Sparo, make this possible?
SOBHANI: So, we have six patents, actually, from the Patent Office, which tells me that we are doing something no one else has done. And what we do is, essentially, gamify charitable giving. That’s one of our patents. We started off with an e-commerce portal, very similar to Amazon Smile, we can talk about that later, but for now, you start off by talking about March Madness. So what we do is essentially turn the concept of a sweepstakes on its head. Instead of Jonathan and Rob winning the lottery and walking away with 400,000 dollars, we’d be happy.
But instead of 400,000 going to Jonathan and Rob, 360 may go to charities, only 40 of that goes to Jonathan and Rob. So, it’s a daily game where players select their charity. Twenty five percent goes directly to that charity. The rest goes into the pot, and at the end of the day, depending on how much there is in the pot, a winner is selected. Why did we settle on this model? Very briefly: today in America, the top twelve percent of charities take in 86 percent of all the dollars I want to repeat that: the top 12 percent take 86 percent of all the dollars. We want, with Sparo, to democratize charity giving.
ABERMAN: Do you think that this approach of democratizing charitable giving is made more or less important by the changes that the Trump tax cuts made in how people do deductions?
SOBHANI: Absolutely. You know, each day in America, we give a billion dollars to charitable causes. A billion each day! But that only is from fifty five percent of the population. What we want is to expand that. And so, when I mentioned for example, the skewing of the 12 percent taking in 86, I think the tax laws, to the extent that they discourage giving, creates a void, and that’s where Sparo should come in, and companies like Sparo should come in.
ABERMAN: Because my understanding of the way that not for profit giving has traditionally gone is, the larger donors are the ones that drive it. As you say, it’s the 12 percent getting the 86 percent of the money. But with the changes in deduction rules, those big donors, a lot of them are discouraged. So what’s the average size of a donor in one of your competitions of gamification?
SOBHANI: So in America, the average donation is around 20 dollars. The average individual gives 20. We’ve seen through our platform 50 dollars, and it’s because we have a system where we also reward people for using our platform. So, Jonathan, let’s say Jonathan goes on our platform, decides to give one hundred dollars. Twenty-five dollars goes to the Maryland Food Bank, the rest goes into the pot. You get a notice at the end of the day: hey, Jonathan, congratulations. You know, here’s your receipt for your money that you gave to the Maryland Food Bank.
You’re gonna get another notice at the end of the day: hey, Jonathan, congratulations. The Maryland Food Bank won a million dollars. Or: oh, sorry Jonathan. The Maryland Food Bank didn’t win today, but the Nebraska Food Bank won. And then finally, you’re gonna get another notification if you’ve played the platform a lot, which says: hey Jonathan, congratulations. You’ve played the platform so many times, you just won a trip to go to Paris.
ABERMAN: So, how do you get around the sweepstakes rules? This sounds like a lottery or something, in some ways.
SOBHANI: Well, we are actually asking users to use our platform. We’re not necessarily going out there advertising that we’re trying to help charities. This is for users to come to our platform and use our platform. But the fundamental goal, Jonathan, though, is the following. Ford Foundation. Hewlett. How did they start? They started with a massive check from their founders. We want to be able to have a world someday, very soon, where we can wake up and give a check of a million dollars to the Maryland Food Bank, so that they don’t have to worry about chasing after dollars.
ABERMAN: This is neat stuff. So, Rob, before I let you go. Where do people go online if they want to participate in this community, or maybe use it as a way to fundraise?
SOBHANI: Basically they go to sparo.com, or sparoprize.com. We’re going to try to make it easy for people to come onto our platform. But let me just finish off, Jonathan, by saying we’ve been able to raise 45,000 meals for the hungry in Maryland. We were able to raise enough donations, through our platform, to take a little girl called Arwa from the Gaza Strip to Israel, and operate on her heart. This is what companies should be doing. You’re a rich company if you enrich the lives of others.
ABERMAN: I completely agree. Rob Sobhani, thanks for coming and joining us today.