When David Helene developed an app to deliver cash to students in times of crisis, the emergencies he thought of were personally like needing money to buy groceries for the week or paying bus fares to get to class.
But when the Edquity platform went live with its first partner, Dallas College, in October 2019, severe tornadoes hit northeast Texas. Buildings were destroyed and tens of thousands of people lost electricity.
Suddenly Edquity faced a natural disaster.
“You never want to introduce technology in such an environment,” says Helene.
But Edquity and Dallas College did not shy away from the growing need for help. During the first 24 hours of the platform, 250 student requests for assistance were received. The technician persevered. Money reached students. And Helene realized that edquity had the potential to support communities in crises.
“It’s the right system for disaster relief and / or real emergencies,” he says.
Little did the Edquity team know when that belief would be tested. What felt like a highlight in autumn 2019 was just a prelude.
“Nothing has been normal since that time,” said Pyeper Wilkins, vice chancellor for people and advancement at Dallas College. “Who could imagine that the year could be what it was? Dallas College’s emergency relief trip was insane. ”
A few months after the tornadoes hit Dallas, COVID-19 swept closed across the campus of the US college. Students lost jobs, childcare and access to dormitories, dining rooms and pantries.
Congress put emergency relief for students at the center of attention by giving universities billions in direct cash grants. Hundreds of colleges turned to Edquity for help. The company’s workforce tripled, the portfolio of colleges it oversees grew to more than two dozen, and in November it raised $ 2.77 million from investors.
Edquity wanted to grow slowly and steadily this year. 2020 had other plans.
As Helene puts it: “The pandemic has changed everything.”
Social service mission, for-profit model
For low-income students, small sums of money can mean the difference between skipping and attending class, or focusing on schoolwork instead of a growling stomach.
Some colleges have started paying more attention to this reality. At Dallas College, many students don’t have reliable access to affordable housing, says Wilkins. At Compton College, a community college in California that now uses Edquity’s services, a 2019 survey found that more than half of students suffered food insecurity, 63 percent housing insecurity, and 23 percent homeless during the year .
To address these issues, some colleges are providing funds or soliciting donations to students asking for help to provide modest grants. From Edquity’s point of view, “these institutions are not set up to spend this money quickly, flexibly and effectively,” says Helene.
Dallas College executives knew there was a great need among its 100,000+ students, but it was daunting to develop a system that would help so many people in need.
“How can we make this fair? Without bias? We’d have to hire about 30 people to do this, ”says Wilkins. “We were looking for an alternative.”
It only takes a few minutes to fill out the Edquity application. The platform informs students within a few hours whether their requests are approved. In about 48 hours, the system provides students with funds – typically up to $ 500, depending on college guidelines – either through direct deposit or through prepaid gift cards.
This student-friendly design, based on research by the Hope Center for College, Community, and Justice, whose founding director is also the company’s chief strategy officer, made the platform attractive to Dallas College, which has signed up as a test partner of Edquity.
The system also attracted investment capital. As of January 2020, Edquity raised approximately $ 4 million, including $ 2.4 million in an initial round from the ECMC Foundation, the Omidyar Network, Spring Point Partners, the American Family Insurance Institute for Corporate and Social Impact, the Michelson 20MM Foundation and of the WGU Labs.
Investors told EdSurge they value Edquity’s mission and methodology.
“They are trying to tackle one of the most inefficient pieces of the social security network we are putting together in this country and make it work for the most vulnerable,” said Margot Kane, chief investment officer at Spring Point Partners. “It’s an easy leap in terms of effectiveness and meeting real needs.”
The company uses a licensing model to charge its college customers based on the size of their student body. The aim is not only to help the students but also to help the institutions by improving their student retention rates. This is particularly worrying now as enrollment in colleges across the country is falling.
“If you can help someone with little money pay their rent, buy groceries for their family, and they stay enrolled for the rest of the semester to finish, that’s what this is about. It’s absolutely a retention tool, ”says Wilkins.
Helene and his supporters believe that this potential return on investment makes Edquity’s emergency aid model more realistic than just relying on philanthropy.
“Edquity continued to show that we were right that you can build a sustainable, scalable, and for-profit business that is also connected to transforming and disrupting inequality,” said Shayna Hetzel, educational investment director for social impact at the American Family Insurance Institute for Corporate – and social impact.
Powering Pandemic Relief
A company’s growth stats usually feel solemn. However, Edquity’s 2020 numbers suggest how difficult the year was for students and colleges.
Since June, the company has processed more than 30,000 applications and helped institutions distribute $ 7.5 million in grants. The beneficiaries are between 18 and mid-1970s, with an average age of 31. More than half of the recipients say they are responsible for dependents.
“Forty-four percent of applicants have children,” Wilkins says of students who applied to Dallas College. “It tells you we’re helping families.”
By the end of the spring semester, business for edquity recovered. The company responded to more than 100 inquiries from colleges to better serve their students during the pandemic. It received more than $ 1 million from the Bill & Melinda Gates Foundation to support its work. The platform was launched with three new partners: Compton College, Western Governors University, and United Way of King County.
“It was a little scary. The technology wasn’t quite built to scale yet. We looked at case studies across the country and systems crashed because they got so many uses, ”says Helene. “We were delighted that the technology worked exactly as it should. At our top we processed 8,000 applications in a single day. ”
Those in charge in Compton had been interested in the idea of providing emergency aid to students before the pandemic, but the crisis drove them to action – and a deal with Edquity.
“It was the perfect timing for us,” said Keith Curry, president of Compton College. “I think they’re a great resource. You have helped us a lot on our way. “
After Edquity and Dallas College jointly survived tornadoes, they took their relationship to the next level. The company helped the college process pandemic aid funds received under the CARES Act. Since these funds could only go to students who met certain criteria – including US citizenship – the partners developed a process to screen applicants for suitability. Dallas students who could get CARES money and those who couldn’t get privately raised money did so instead.
Getting students to apply for pandemic aid in the first place was a challenge of its own, according to Wilkins. Dallas uses social media, text, and email to target students at the times they are most likely to complete edquity applications: between 6 p.m. and 6 a.m. on weekends.
In this way, Dallas has processed approximately 9,000 student grant applications since April and has awarded CARES funding of more than $ 5 million. Without Edquity, Wilkins says, “I don’t know how we would have done it, especially in a pandemic when everyone is away.”
It seems like Edquity will have a lot of work to do in the new year for its new hires and funding. The company has new projects, such as Compton College’s plans to use the platform to expand its support to double-enrolled high school students. And there could be increased demand as the federal government pushes the additional pandemic relief it was planning to send to colleges in late December.
“We would expect to move very quickly to support the institutions in this next wave of funding,” says Helene. “Unlike in May, we feel ready to scale up quickly.”
Aside from the short-term impact on edquity’s growth, the pandemic may also have shifted some attitudes in higher education about the underlying business philosophy – that it’s important to help people quickly and easily.
“Direct help and help have increasingly established themselves as a tried and tested method,” says Helene.