Read the email Expensify's CEO sent to customers on MLK Day outlining the company's plan to fight injustices with a 'highly experimental' crowdsourced campaign

• Expensify will spend an extra $3 million to fight systemic injustices in 2021.
• CEO David Barrett outlined a "highly experimental" plan to let volunteers and donors choose causes.
• Expensify will focus on climate change, homelessness, hunger, criminal justice, and youth issues.

Expensify plans to donate an additional $3 million toward causes tackling a range of "systemic injustices" in 2021 through its charity arm, Expensify.org, the company announced on Monday.

In an email to customers, CEO David Barrett outlined Expensify's "highly experimental" new approach, which will involve "crowdsourcing the best ways to spend these funds" and giving them directly to volunteers working on five categories of causes: climate change, homelessness, hunger, reducing recidivism, and youth-related issues.

The email, which was sent on Martin Luther King Jr. Day and quoted at length from one of the civil rights activist's speeches, "The Other America," outlined how Expensify would rely on volunteers and donors to guide its contributions.

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"We know a lot about receipts, but much less about saving the world," Barrett said. "However, we are confident that among the millions of people reading this, there are countless who do this every day -- and we would like to help you continue your important work."

Read more: How the boom in socially conscious investing is influencing the way massive corporations react to events like the Capitol riots

Expensify plans to solicit applications from volunteers who are already working on - or would like to start - working on tackling those five issues and how they'll use the money and scale up their operations, according to Barrett's email.

Expensify will then let all Expensify.org donors vote on the best applications, give the top 10 a minimum of $25,000 each, work with those campaigns to refine their applications, let donors vote again, give the top 5 a minimum of $50,000 each, refine and vote again, and give the final winner a minimum of $100,000.

Barrett told Insider another key aspect of the new initiative is to "increase the emotional engagement between donors to charity and the recipients of that charity" by connecting donors directly to the volunteers their donations helped out.

"There's a tremendous amount of potential generosity out there that it's just not being captured by most of the nonprofits because they just do a poor job kind of connecting people emotionally," Barrett said in an interview with Business Insider.

Barrett said in the email the idea came out of internal discussions among Expensify employees around its own lack of diversity and how the company could help offset existing systemic biases. Referencing a study by Payscale.com that found women of color overall earn just $0.75 for every $1 that white men earn (in terms of median salaries), Expensify said it would donate $0.25 for every $1 earned by white men at the company - around $3 million annually- to help close that gap.

"In a way, it recognizes that every white man in the organization received the invisible, unavoidable benefit of the systemic bias of society, so any time we hire someone who received this benefit, we try to quantify the effect of that benefit, and pay it back to society," the email said.

Expensify's moves come on the heels of a year in which George Floyd's death created major pressure on companies to do more to address racial, gender, and other inequalities - both within their companies and in terms of their businesses' impacts on society Major companies promised more than $35 billion, according to an analysis by The Wall Street Journal. However, it remains to be seen where all of this corporate philanthropy ends up being spent, how effective those efforts ultimately are in addressing systemic inequalities.

Read Expensify CEO David Barrett's full email:

From: David Barrett
Date: Mon, Jan 18, 2021 at 5:12 AM
Subject: [Expensify] Honor Dr. King by using $100k from Expensify.org to fight injustice

Tl;dr - Go to Expensify.org/apply to help save the world with up to $100,000!

2020 was a helluva year, good riddance. Of the very few good things to come out of it, one is a glimmer of hope that social media will begin moderating their platforms in defense of democracy.

But the other was the stark reminder of how non-violent protest is the most powerful way to accomplish real change. I think the most powerful orator of this concept is Dr. Martin Luther King, Jr., especially in his lesser known -- but I feel most moving -- speech, The Other America:

"Let me say as I've always said, and I will always continue to say, that riots are socially destructive and self-defeating. I'm still convinced that nonviolence is the most potent weapon available to oppressed people in their struggle for freedom and justice. I feel that violence will only create more social problems than they will solve."

Indeed, watching that speech again, his words seem more prescient than ever. Contrast how a patient, persistent, and overwhelmingly peaceful Black Lives Matter movement successfully passed scores of police oversight bills around the nation -- while a violent spasm of insurgents at the Capitol brought nothing but chaos, destruction, and an indelible shame to themselves and those who supported their heinous acts.

And yet, while the actions of these domestic terrorists (let's call them what they are) cannot be defended, and derive from an elaborate framework of conspiracy and lies, I'm reminded of what Dr. King said immediately after:

"But at the same time, it is as necessary for me to be as vigorous in condemning the conditions which cause persons to feel that they must engage in riotous activities as it is for me to condemn riots. I think America must see that riots do not develop out of thin air. Certain conditions continue to exist in our society which must be condemned as vigorously as we condemn riots. But in the final analysis, a riot is the language of the unheard."

In a way, the highly successful BLM movement and the catastrophically ineffectual militants serve as two potent case studies in how to succeed or fail in creating positive change in the world.

This is especially interesting given that the two groups, who would seem to have virtually nothing in common, in fact share a key complaint: neither are enjoying the "milk of prosperity and the honey of opportunity" of the America that sees a booming stock market securing the value of their retirement. In the words of Dr. King:

"But tragically and unfortunately, there is another America. This other America has a daily ugliness about it that constantly transforms the ebulliency of hope into the fatigue of despair. In this America millions of work-starved men walk the streets daily in search for jobs that do not exist. In this America millions of people find themselves living in rat-infested, vermin-filled slums. In this America people are poor by the millions. They find themselves perishing on a lonely island of poverty in the midst of a vast ocean of material prosperity."

Though obviously Dr. King is an outspoken advocate for the Black community, he is also an avid defender of all who suffer under the yoke of injustice:

"Injustice anywhere is a threat to justice everywhere. We are caught in an inescapable network of mutuality, tied in a single garment of destiny. Whatever affects one directly, affects all indirectly."

So reflecting back on 2020, with so much anger creating so much destruction, I feel the best way to honor the memory of Dr. Martin Luther King, Jr. is to consider the systemic injustices in our society that give rise to this anger -- and to do something about it.

With that in mind, you might already know we launched a charity this time last year, eponymously named Expensify.org. With the generous donations from thousands of donors using the Expensify Card's Karma Points (which makes a small donation with each purchase), Corporate Karma (which makes a donation for every dollar of expenses approved), Personal Karma (which makes a donation for each dollar spent), or just direct donations to the site we were able to help thousands of families with grocery assistance throughout 2020. And that was big. But this year, we want to go much, much bigger:

We are committing an additional $3 million dollars a year to Expensify.org to fight injustice, and we need your help figuring out how to spend it.

Expensify.org exists to "create a just and generous world" by patiently eroding, as "upstream" as possible to have the largest and most permanent achievable impact, large social problems resulting from systemic injustice. We do this by using a direct-giving approach and creating a "Karmic feedback loop" between donors and volunteers as follows:

1. An Expensify user makes a donation (ie, an Expensify Card holder makes a purchase, resulting in a Karma Points donation being made to an "offsetting" fund for that purchase -- hotel expenses, for example, donate to Expensify.org/homes)

1. An Expensify.org volunteer scans a receipt for some purchase made as part of one of the charitable campaigns working from that fund

1. The Expensify.org campaign manager reviews and approves the receipt

1. 50% of that volunteer's receipt is reimbursed using donor funds

There is one problem: ever since finishing our SNAP grocery reimbursement campaign, we have no active campaigns. This means Expensify.org is accumulating funds, but has no active campaigns to reimburse. This is where you come in.

See, we know a lot about receipts, but much less about saving the world. However, we are confident that among the millions of people reading this, there are countless who do this every day -- and we would like to help you continue your important work. Accordingly, we are crowdsourcing the best ways to spend these funds on campaigns that are at the intersection of justice and one (or more) of five funding areas:

• Expensify.com/climate - Anything helping mitigate and reduce the effects of climate change, especially on those who will be disproportionately affected as a result of historical disenfranchisement.

• Expensify.org/homes - Anything helping those who are houseless or in a housing compromised situation, especially if this results from redlining or other racially biased policies in the past.

• Expensify.org/hunger - Anything helping those struggling with hunger, especially if that struggle results from systemic inequality.

• Expensify.org/reentry - Anything helping those who are re-entering society after incarceration to avoid recidivism, especially those who were incarcerated based on unjust or even obsolete laws.

• Expensify.org/youth - Anything helping those under 18, especially those who are in groups that are already marginalized and suffering injustice.

If any of these sound similar to what you already do (or would like to start doing), please let us know! To apply:

1. Go to Expensify.org/apply

1. Describe the community work you are already doing, or intend to start

1. Detail the specific kind of expense that you will be seeking to get reimbursed

1. Explain how this work relates to one or more of the current funding areas

1. Outline your plan for how to recruit other volunteers to scale up your campaign

We expect quite a few applications, so we are going to evaluate them in stages. But doing that is also a lot of work, so who better to help than all Expensify.org donors. Specifically, it will work as follows:

• We will present the complete list of campaigns to every current donor to Expensify.org.

• They will rank the campaigns in order of interest (after all, we work for them), and we will award a minimum $25,000 budget to the top 10.

• We will then work with those 10 to flesh out and improve the campaign description, after which we will present the enhanced campaigns again to donors, to re-rank.

• We will pick the top 5 and award a minimum $50,000 budget to each.

• We will then work with those 5 to flesh their campaign concept out further, including interviewing initial volunteers to get stories of how each campaign is working out in the real world -- and present one last time to donors for a final vote.

• The top choice will be awarded a minimum $100,000 budget.

Each selected campaign will be run for at least one year, by the campaign manager who proposed it, during which it will be provided with at least as much budget as was awarded during the donor voting phase -- with the most popular options conceivably receiving much more depending on how much activity we see.

Like everything we do, this is highly experimental as we figure out the right way to be the most helpful to the largest number of people. Hit me up on Twitter @dbarrett if you have any questions about it, or any ideas for how we can do a better job.

One final note before I hit Send: about that three million dollar budget. The idea for this whole thing came out of an internal discussion triggered by the BLM movement reflecting on our own less-than-optimal diversity as an organization. Quite a few improvements and initiatives have come out of that, most of which aren't very visible to the outside. But in particular, we were trying to get creative about how to internalize the concept of "equity" -- which in large part means helping solve problems that happen outside of our walls, not just those we create within.

To try to quantify the scale of the problem in some numerical way, we turned to the Payscale: State of the Gender Pay Gap 2020 report. Specifically, we were struck by the "Gender pay gap by race, relative to white men" chart, which outlines the "uncontrolled pay gap" -- a value that does not limit itself to people in the same role. We feel this is the best measure of the financial effects of accumulated systemic inequality, as in theory if society were perfectly just, everyone would follow the exact same career trajectory regardless of gender or race. But in practice, obviously, that is far from the case.

As you'd expect, the first place we looked was internally, to ensure that everyone at the same role was being paid the same, irrespective of race or gender. Thankfully this is guaranteed by our compensation review process, which has evolved a ton over the years and now calculates compensation formulaically based on an internal voting system involving all employees. This makes it essentially impossible for any one person's bias (positive or negative) to skew the results for anyone else. But we also acknowledge that we exist in a fundamentally biased society -- and that even in the perfect case of us being totally neutral, the accumulation of injustice before people arrive here would still result in skewed results.

This conundrum is the whole basis of the philosophy of "equity", which led us to our first, very brute-force proposal: let's just directly pay anyone in a historically marginalized group more, based on the Payscale data. This would mean white women, who earn $0.81 on the dollar relative to white men, would get a 19% raise -- to "catch them up". All Black, Native American, and Hispanic women would get a 25% raise. The thought process was that in theory, had they not experienced systemic bias prior to joining the company, they would be earning that much. However, those who were slated to receive the bonus were universally opposed to the idea -- everybody obviously wants to be paid more, but those who would have benefited the most wanted to help others more than they wanted to help themselves.

So the second thought was to take that same money, and rather than paying it to the employees directly, to instead donate it to Expensify.org with a focus on justice and unwinding the effects of systemic bias. This was similarly well intentioned, but missed the mark: it in effect creates a "tax" on all non-white men, which creates perverse incentives in hiring.

This led to the third idea -- the one we're actually going with -- which is to take the largest wage gap ($0.25 on the dollar), and then for every one dollar paid to a white man in the company, donate $0.25 to Expensify.org. The result adds up to about $3MM/yr. In a way, it recognizes that every white man in the organization received the invisible, unavoidable benefit of the systemic bias of society, so any time we hire someone who received this benefit, we try to quantify the effect of that benefit, and pay it back to society.

Is this the best possible idea? Probably not. But "perfection is the enemy of the good", so we've opted to do something tangible, rather than debate endlessly without taking action. Got a better idea? Let's talk on Twitter @dbarrett, I'd love to hear it.

And that's a wrap. We're super excited to launch this initiative, and can't wait to hear what ideas you have. But for now, let me finish with one final quote:

"True peace is not merely the absence of tension; it is the presence of justice."
- Dr. Martin Luther King Jr.

Take this day to reflect on the path that got you where you are, and how that path might have been helped or harmed by the invisible hands around you. Regardless of gender or race, nationality or political affiliation, injustice is everywhere. Every one of us sees it every day. It's our decision what to do about it.

-david

Founder and CEO of Expensify