FreeWill is a young company that could succeed if a few things go right. It has to catch on against larger competition such as the legal software suite LegalZoom. And it needs people who want to make planned donations.
More than 90 percent of American adults make charitable donations every year, according to the Giving USA Foundation, a nonprofit research organization. Yet fewer than 6 percent bequeath anything to nonprofits.
“Our goal is making it easy for them and be more intuitive,” Zou said in a recent telephone interview. Zou is currently based in Palo Alto, Calif., pursuing dual degrees at Stanford University.
“How do you help people and make it easier to do good?”
It wouldn’t be wrong to think about FreeWill as a technology company. It was founded by a handful of Stanford graduate students, Zou among them, and the team recently graduated from a 10-week accelerator program for Stanford students.
That Seminal Highland Program has churned out its fair share of disruptive technology companies. One alumnus is Cloudflare, now a major cybersecurity firm. The venture capital firm behind it, Highland Capital Partners, has a portfolio of enterprise software and search engines.
While there’s a long queue for companies hoping to become the next Uber, and conquer some segment of retail or services, FreeWill was attractive for setting its sights on a relatively hidden segment: nonprofits.
“We don’t see a lot of entrepreneurs innovating in the nonprofit space,” said Corey Mulloy, a general partner at Highland Partners, who joined the venture capital firm two decades ago. Yet the nonprofit sector reported $3 trillion in assets total in 2013, according to the National Center for Charitable Statistics.
“When you start to look into it and be educated by, for example the FreeWill team members, you say ‘Wow, there’s a real opportunity here,’ ” Mulloy said.
FreeWill is designed as a free service for most consumers, and it would make its revenue through partnerships with nonprofits. Those nonprofits would buy customized versions of the will-making process, which would also help them track bequests and build relationships with donors.
Zou said it isn’t uncommon for someone to leave a gift for a nonprofit that never had a relationship with that donor.
“There’s a missed opportunity for that relationship building,” she said.
Project HEAL, a nonprofit that supports and aids people with eating disorders, is one such customer. It recently broadcast three online canvassing efforts for its newsletter subscribers and introduced people to the will-making website. In the process, Project HEAL raised $1 million in pledges.
“We weren’t expecting so much,” said Kristina Saffran, executive director of the organization. “I think that we haven’t really tapped the capacity yet. … I think there’s a tremendous amount of potential for very little effort.”
Likewise, it could be a foot in the door for smaller nonprofits which can’t yet pay for someone to work with donors about how to leave bequests, said Jennifer Rhoads, executive director for the Community Foundation for Southwest Washington.
“If there’s a simple, strategic way for donors to make gifts inside software, that helps nonprofits because then they’re not paying for talent to make that happen,” she said.
One immediate hang-up, though, is that you can’t predict when a bequest would come.
“It could be tomorrow; it could be 40 years from now,” said Saffran.
A section of FreeWill’s front page shows that 1,780 completed wills have committed $29.9 million to charities.
The FreeWill website is straightforward. An online form walks you through filling out personal information, and displays a handful of charities available for donations. A person can leave gifts, name an executor, then print the will out to be signed by witnesses.
Probate laws vary state by state, and the website attempts to take that into consideration and inform users about how they can make a will official depending on where they live.
Turning protracted estate-planning processes into a free, accessible website could be what makes FreeWill successful, investors said.
“I think the insight here is that Helen and her co-founders had spent time in nonprofits and experienced and identified a problem that needed to get solved,” said Mulloy.
That simplicity could also be a detriment. The website concedes that complex estates should be referred to attorneys. Local estate-planning lawyers say people should consider seeing an attorney if they have a lot of assets or if they have any particularities with their beneficiaries.
“If you go to a website like that, you don’t know what you need,” said Joshua Pops, an estate lawyer in Vancouver. There are a lot of questions to be asked of every new client, he said.
“A single mother with two kids and wants everything split 50-50, that’s easy,” he said. “But let’s say you have a beach house in Newport, Ore. Do you want to keep that house or get rid of it? Are any of your grandkids special-needs? Do you have money in an IRA?”
When a close friend of Cyndi Harris’ died, she left behind a $5 million estate including a construction company with 40 employees. An estate that complex should be handled by professionals, she said.
“There’s so much battling that can be done amongst family or business partners,” said Harris, a Vancouver resident. “I guess after the experience I went through, I would never do it online. I just wouldn’t. I guess if you needed to do something very quickly, if you were traveling to the Middle East or something, I get it.”
Pops and Harris both said, however, that having any sort of will was better than nothing.
Zou, a 2009 graduate of Mountain View High School, said FreeWill hopes to get people working together. She wondered how many people don’t have wills because they can’t afford to consult with an attorney or are simply too intimidated.
“Our goal isn’t to replace attorneys, but rather to get people to think about estate planning in the first place. If they do have a more complex estate, we also think they should go see an attorney,” she said.
FreeWill can even help people draft a list of talking points to take to an estate attorney. “The attorney can pick out the specific nuances that aren’t captured,” she said.
After high school, Zou studied biomedical engineering at Duke University with the aim of becoming a doctor. She earned her degree in 2013, but soon discovered she had little interest in lab work.
“I still think it’s a really cool profession and there are aspects of it I really enjoy,” she said. “The piece I felt was missing at the end of the day was that you impact one person’s life at a time (as a doctor). I kept wondering if there was a way to impact larger amounts of people at once.”
Zou pivoted after working as a product manager with Capital One Financial Corporation. There, she helped make a mobile app more intuitive so as to help consumers stay on top of bills. She said it led her to Stanford, where she now works toward dual master’s degrees in business and education.
Since helping found FreeWill, she said they have partnered with 20 nonprofits and hope to expand that roster in the next year.