Q&A with PRASHAN PARAMANATHAN

Prashan Paramanathan

I am building a transparent, inspiring and personalised philanthropic platform to create change.


 
Prashan Paramanathan is Founder and CEO of Chuffed.org, a crowdfunding platform for socially-conscious projects. Chuffed received funding from Blackbird Ventures and the Telstra Foundation. Previously, Prashan worked for the International Finance Corporation and Social Ventures Australia. Prashan is on the editorial advisory board of Pro Bono News. He has been featured on the Guardian and the Australian.


AP: Can you tell us about your family background?

PP: I was born in Sri Lanka in 1983, the year when the Black July riots happened. For those who know the history of Sri Lanka, the civil war started that year. My mom was pregnant with me at the time. It was a pretty terrible environment and most of the violence was targeted towards people who look like us. That was the environment that I was born into. I grew up with stories of people being kind to us during this time. My parents decided to move to Australia when I was three years old. We moved to Armidale, New South Wales, which was a small regional town back then. When I was 10, we moved to Sydney and I’ve been here since. In Australia, my parents were always helping their brothers and sisters back in Sri Lanka. My life would have been very different if my parents didn’t move to Australia. That decision that I had no part in, determined much of the rest of my life.

It made me realize that you either get dealt a good hand in life, or you’re not. It’s just sheer luck. We often hear stories about people working hard and making their way to success but when you dig deeper into their background story, it is just a lot of luck. To me, that feels very arbitrary.

You have to ask yourself this question, ‘If you’re in this world where most of your life outcomes are determined by sheer luck, what role should you play in society?’. You have to help people who didn’t get such luck.

AP: What was your dream as a child, what did you want to do? 

PP: I think similar to a lot of Asian families, I absorbed the dream that my parents had for me. I did relatively well in school so the options laid before me were either becoming a doctor, a lawyer or an accountant. I absorbed that and thought about becoming a doctor. From a young age, it was repeated over and over again. Growing up, I didn’t think further about other possibilities.

 

As I got older, I still had a connection to medicine. I observed friends who were either doctors or were heading down that path and it seemed like a really hard life. It was 10 years of education, in university and then outside. It was exhausting. I still wanted to do something medical-related or in a field where you can help people so I studied biomedical engineering for five years.

After graduating, I spent more time thinking about what I actually wanted to do. I looked around at different engineering careers, they didn’t seem that appealing to me and I couldn’t get the sense of how I was going to actually help people. At the time, Australia had a tiny biomedical engineering industry. There wasn’t much going on in terms of current roles in that space. I enjoyed maths and science and I wanted to do something that would help people.

AP: It’s very hard to be top of the class at UNSW but you were a university medallist. Was there a reason that motivated you to study very hard back then? Do you think students nowadays still need to get the top score at school in order to be successful in life?

PP: I don’t think you need to. I think that’s just drilled into me from a young age. It started in grade three where my parents got all the photocopies of the prior class tests and study notes from all the other Sri Lankan parents who were passing them around. You learn how to do tests really well and through that ability, I earned a scholarship to attend Sydney Grammar. By the time I got to university, I had a decade of experience of doing tests really well, how to study, and how that system works. It took hard work to do that but I don’t think I had a huge passion for the topics I studied.

AP: Tell us about the early days of your career. How did you get your first job in consulting?

PP: It was actually a very strange path because I didn’t want to go into consulting at all. I actively pushed back on it because I thought it was this world of rich people making rich people richer. I’m not exactly sure at what point my opinion on it changes but the message that I got over and over again is if you actually want to do good stuff in the world, you need to get some sort of background or understanding of the corporate and business world. The traditional path for people who wanted to do social good stuff is to spend 40 years in the corporate world making money and doing bad stuff along the way and then making it up in the next 20 years.

So I did the usual thing and applied to a bunch of different consulting firms and ended up at Port Jackson Partners (PJP), which is a great firm. PJP was a very small consulting firm back then. There were a handful of partners who have gone on to do amazing things. I learned a lot about business, how the corporate world operates, how to communicate and how to write very effective PowerPoint presentations.

But, inevitably, I got stuck on a client whose values I didn’t align with, and  that wasn’t what I wanted to do. I wanted to do good work, learn more about the international development world and  learn more about China so I applied for a position in the Australian Government aid program called the Australian Youth Ambassadors for Development (AYAD). Eventually, I got a role as an Operations Analyst in the International Finance Corporation (IFC) which is part of the World Bank.

 

AP: How was the experience working at the IFC and was the culture bureaucratic? How was your experience working on the China project?

PPThe IFC also taught me a lot about the international development world. I learned a lot of things during my time there.

The best way of thinking about the IFC is to split it into a management consulting arm and an investment banking arm. The way that the consulting arm operated was that we would hire foreign consultants to do consulting projects. It was such a weird model where we pay taxes in Australia, which get funnelled through our government through the form of an aid budget into the World Bank, which then get funnelled into the IFC, and then finally funnelled through Hong Kong and into this regional China office. It then got paid out to a European consultant.

In that environment, the Chinese staff knew what they were doing but they had to operate within that framework. In that framework, a lot of decisions would be made out of the Hong Kong office or out of Washington D.C., so even though the China office was the best place to make the change happen, they weren’t always seen that way. My unofficial role was acting like a culture translator between the Chinese team and the European consultant. Despite spending a year with the Chinese team, I barely scratched the surface of understanding Chinese culture. I had enough respect for the Chinese team though and enough ability to culturally translate from the European side that I could understand both sides. I think it’s hard for outsiders to  understand the scale and the pace that China was moving in.

“You either get dealt a good hand in life, or you’re not. It’s just sheer luck. We often hear stories about people working hard and making their way to success but when you dig deeper into their background story, it is just a lot of luck. To me, that feels very arbitrary.”

It became clear  that China was fine, they understood what they were doing. They had a lot of very smart Chinese staff who were driving the country and were very much in control of where China was heading. It made the aid to China seem weird and silly. People were trying to apply their Western frameworks to China, it didn’t work. My biggest learning was that the people that are confronting the issues are best placed to solve them.

AP: How did you transition to the non-profit world?

PP: Initially, I thought I needed some business knowledge before I went into the non-profit world, but that wasn’t right. Then, I thought international development was where to go to make the biggest impact but realized that it wasn’t really a problem that I owned so I thought, ‘What if I could mesh the two together to help non-profit organizations be better?’. I think that was how I ended up in Social Ventures Australia, a management consulting firm for non-profit, foundation, and corporate social responsible teams in the private sector. There were so many amazing people in the sector doing great things, who were much better placed to solve the problems on the ground than me. Where I landed on my contribution was to help them do what they do better. It wasn’t that I had this lightbulb moment of where I wanted to go. It was me gaining a better understanding of the situation that I was in.

AP: From engineering to entrepreneurship, what were the things that you’ve learned to be able to make that transition? 

PP: It’s not about learning things and then transitioning but the reverse — you transition and then you learn. I don’t think I was necessarily a born entrepreneur. I’m in the category of an accidental entrepreneur. I’m solving a problem that I thought I could help and we started building a product to solve it. We started out as a charity and I feel very fortunate that the Telstra Foundation believed in us and gave us $460,000. We were lucky to receive a large grant for the stage that we were at. Then all of a sudden, I was an entrepreneur. I was thrust into the problem and the circumstance meant I had to figure out how to do it. It was at that point that I actually learned. 

AP: Building a startup takes lots of hard work, what were the challenges that you faced while building Chuffed?

PP: We had to figure out how to build a product for people who were doing incredible things in the world but were struggling to get their voice heard. At the same time, there are people who want to help but their interactions with the charities are non-existent. They either never hear back from the charities or would just get harassed on the street. We thought we could bring the community to the people who are doing good work.

We hit the point where we became global. We were doing okay but we wanted to be much bigger so we needed to raise more money to hire more people. We also wanted to figure out a way of growing fast while maintaining our purpose so we invented a company structure called the Social Benefit Company (SBC), which mirrors the US Public Benefit Corporation but for Australian corporations. I think we were the first company in Australia to do that. It was challenging to pitch a ‘social goods’ product to venture capitalists because you get this mixed response — either investors don’t understand it, they mistakenly give you a donation instead, or they just feel plain bad about making money off charities.

Fortunately, we were one of the first customers of Stripe Australia and also an early customer of their product, Stripe Connect. Back then, Stripe had two staff in Australia and one of them was Susan Wu, who is an incredible person. She was really helpful in introducing us to Niki Scevak from Blackbird Ventures. We were a charity so we had no immediate value for Niki but he would give me advice and try to be helpful by putting me on stage at events. Eventually, when we got to a stage of wanting to convert the company structure, I went to him for help to pitch to investors. I had no idea what I was doing so he suggested pitching to Blackbird if I want to learn how to pitch. I was terrified. I delivered my first and worst pitch to them. At that point in time, they smartly said no.

Subsequently, I pitched to a lot of people across 2015 who all said no. Towards the end of 2015, I came back to Niki and explained to him that I was done with trying to raise money. Chuffed was now international and had grown significantly since the start of the year, but I wasn’t sure what to do from there. He suggested that I come back and pitch to Blackbird. By that point, I was much better at pitching. Our pitch deck made much more sense after receiving so many rejections. We pitched on Tuesday, we had a term sheet by Thursday. We eventually ended up closing the round with Bevan Clark. He believed in what we were doing as well. It was a wild and crazy year. All of a sudden, we had raised a $1.1 million round for a social enterprise. It was the first time that a social enterprise raised money from a technology venture fund in Australia. It was a bold move by Niki and the Blackbird Team.

AP: You have built Chuffed for almost 9 years now. What impact do you think Chuffed has made to the world?

PP: The real impact for us has been in two ways. The first impact is on the fundraising industry. We observed that the market was taking a 5% cut plus card fees and people were losing about 10% of their donations because of it so we decided to do a completely different model by taking optional tips at checkout. It was risky and we might actually have no guaranteed revenue as people could choose to tip us or not. We did it because we wanted more transparency and to improve the donor experience. That is now the market model. People have adopted that model for several reasons, not least because it makes you more money. It also encourages givers a much more transparent donation experience.

Our second impact is in the customers that we support. Our biggest customer is a very large, global climate change protest movement based in the UK called Extinction Rebellion. They raise several millions of dollars with us every year. That money funds some of the important activism that is changing policies around the world. We also fund a number of court cases. One of the most impactful has been the Rocky Hill coal mine case in New South Wales, Australia. For the first time, an Australian court refused a coal mine based on climate change grounds.

We also support a lot of refugees based in Manus Island and Nauru with simple things like phone credit, their court cases and support for when they return to the community. For the ones who have escaped Australia’s detention system and are now free in the US and Canada, we have been fundraising to support them to start their life there. For the ones that are still trapped, we fundraise to help them transition to Canada through the Canada refugee resettlement program. These are examples of the impact that Chuffed has helped created.

Today, most crowdfunding platforms like Chuffed are Software-as-a-Service (SaaS) platforms, which means that charities can use the tools on the platform to campaign but they’re responsible for finding their own donors. Basically, the business is about getting more campaigners to use your platform. We recently released a product called ChuffedAmplify that flips that – it’s a tool that lets you advertise your campaign. You can use ChuffedAmplify to advertise to our donors and others, we guarantee that you won’t lose any money and for most campaigns, we think it would make money. We have been testing it last year and there are campaigns that have raised $200-$300k using ChuffedAmplify at five to ten times the return on investment. We are the first crowdfunding platform in the world to have an advertising tool.

 

AP: Are there a lot of Asian-backed or Asian projects on Chuffed?

PP: Our biggest markets are Australia, UK, and the US. We have some campaigns out of Hong Kong. I spent a lot of time in Singapore in the early days of Chuffed to see if we could expand out into the Asian market. I think Asian philanthropy and donations are at a different stage than the rest of the world. You see pockets of social justice and activism fundraising, particularly in Hong Kong right now. The protest movements are raising money publicly but people still donate a lot to their local temples and local religious institutions. The personal fundraising market is starting to take off a little bit. People are donating to children who have a terminal illness or needs life-saving treatment — the kind of GoFundMe style campaigns are coming up in Asia but I think it’s still early days for philanthropy out there. We still have some Western development projects in Asia but there’s not a huge amount happening. Instead of transitioning people online for an activity that you’re already doing, you have to build a completely new market.

AP: How has Chuffed support disaster or relief campaigns?

PP: When Cyclone Pam hit Vanuatu, the High Commission in Vanuatu set up a Chuffed campaign the next day and the money got delivered immediately. When the Nepal earthquakes hit, what was amazing was the diaspora and friends of whom had connections with particular villages. They would raise funds and get money distributed to those communities in a way that large charities could not do because they just didn’t have those networks and connections. In disaster or relief fundraising, what’s interesting is that a distributed grassroots fundraising model works way better than a centralized charity fundraising model. You get money out faster, into places that you couldn’t otherwise get to.

AP: Who has the most profound impact on your life?

PP: The choices made by my parents had a profound impact on my life. Only when I started travelling internationally did I appreciate this, especially now that I’m at their age and have kids of my own. My parents decided to move to a country where they knew only one family, and not knowing whether they would ever return back to Sri Lanka. They had to navigate all the things migrant parents have to navigate. My mom was a teacher in Sri Lanka and she was qualified there but when she came to Australia, she had to redo her bachelor’s degree. She had to figure out how to work in this new world. It was hard and it took a lot of strength. It’s crazy how much strength you would have had to deal with all of that.

 

AP: What advice do you want to give to young Asian Pioneers wanting to make an impact?

PP: For people who want to do good in the world, understand the problem you’re dealing with and who is best placed to solve it. A lot of the problems in the non-profit sector are due to people trying to solve problems that are not theirs to solve, and they are not respecting the people who understand those problems. For decades in Australia, white people have tried to solve black people’s problems but failed to listen to black people to better understand their community. I think that understanding only comes from going on the journey, and being humble enough to appreciate that you might not be best placed to solve this.

The other advice is to have the courage to think about your own dreams, not the dreams that other people have for you, particularly if you come from an Asian background, it’s really hard to do.

AP: Do you have any book recommendations?

PPThis year I decided to use my voice to speak much more about racial justice issues, particularly within our sector and in the private sector, which has ruffled a few feathers. I think the murder of George Floyd really triggered something in a lot of people. It definitely did for me. I have been quite deliberately trying to de-colonize the media that I consume, the books that I read, and so I’ve been binge-reading books by black people, and particularly Aboriginal and Torres Strait Islander writers.

A book I recommend is What the Colonists Never Knew: A History of Aboriginal Sydneyby Bruce Pascoe, Dennis Foley, and Peter Read. It’s a great story about Sydney and the different clans and people that lived in Sydney. It narrates the history of Sydney from a black perspective. I also like Stan Grant’s books. He writes beautifully and the book I recommend is Talking To My Country. For more fun, I really love biographies so I would recommend Maybe Tomorrow by Meme McDonald and Boori Monty Pryor. Monty has a great (Australian) ABC series as well.

 

“When the Nepal earthquakes hit, what was amazing was the diaspora and friends of whom had connections with particular villages. They would raise fund and get money distributed to those communities in a way that large charities could not do because they just didn’t have those networks and connections.”

AP: So apart from Chuffed, what global issue that’s on top of your mind right now?

PP: I thought climate change would be the issue in 2020 and it wasn’t. It was racial justice. And the level of sophistication around understanding about racial justice is so low right now in the mainstream community because everyone is stuck in this world of racism. The pointy end of structural racism is about who has power and how that power gets exercised. I’ve learned very well how to operate in a white world having attended Sydney Grammar, and having the privilege of getting a scholarship to go there. You learn very well how to assimilate into a white world and interact with wealthy white folks.

I decided to talk about structural racism in the non-profit sector. As a man, as long as I stay within certain parameters, I can operate within that world but it’s a lot harder for women of color in Australia. Everyone in the non-profit sector thinks they are good people and don’t have racism issues — it is just bullshit. I noticed that all the board members of the large foundations in Australia are white people, and it ruffled some feathers when I raised this issue. Or how a board of one of the largest foundations in Australia and the CEOs that they’ve given money to, are all white. These observations suddenly made people aware of the stark contrast and the power structure at play in the non-profit sector, which a lot of people don’t like. I received emails from people saying that they’re pissed off as a result of my posts. To me, that’s an innocuous statement as I’m not making up the data.

The thing that was eye-opening was that several women of color in the non-profit sector messaged me and said, “Thank God somebody else is saying this.” Pro Bono Australia wrote an article based on what I had posted. Black women had been saying this for a very long time. Women of color have been saying the same thing for a very long time. When a man said it, they wrote articles about it. I didn’t come up with anything new. It became abundantly clear the dynamics at play. I think you need people who are fired up and the people who build bridges to both be doing their part to make change happen.

AP: Thanks so much for sharing your journey with us Prashan.

 

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