Two MBA alumni find a new way to encourage charitable giving.
Co-founders Schmitt and Spradling developed the idea for FreeWill as classmates at Stanford GSB. | Photo by courtesy
About 70% of Americans lack an estate plan, which means millions of people could benefit from FreeWill, a site that helps users create wills and trusts while encouraging them to make bequests to their favorite charities.
FreeWill — which calls itself “a social-good enterprise at the nexus of philanthropy and estate planning” — claims it’s the largest estate-planning company in the U.S., if not the world. The public-benefit corporation has been the catalyst for the creation of more than 720,000 estate plans. Its users have committed more than $7.2 billion to causes they support.
“The only thing we did is make it super-easy,” says co-CEO Jenny Xia Spradling, MBA ’18, who launched FreeWill in 2017 with Stanford GSB classmate Patrick Schmitt, MBA ’18. “We just cut out the friction and made it easy to start an estate plan. We made it easy to finish an estate plan. We made it easy to think about charity.”
FreeWill users follow the site’s prompts to create living wills and trusts and advanced healthcare directives. FreeWill also offers tools to create a durable financial power of attorney and name beneficiaries as well as make charitable gifts of stock and even cryptocurrency. As its name says, FreeWill’s services are offered at no cost to consumers, and while the software prompts users to include bequests, it’s not mandatory.
About 1,100 charities — including Rutgers University, Greenpeace, the Sisters of St. Mary of Oregon, the American Heart Association, and Muttville — pay an annual fee to access FreeWill’s suite of estate-planning software, which they can offer at no cost to their supporters. “We realized nonprofits desperately want these types of gifts,” Schmitt says. “We could subsidize free estate planning for individuals by charging nonprofits to either have custom versions of the software or to be effectively advertised as an option when people are going to do their estate plan.”
Between June 2021 and May 2022, 16% of FreeWill users included a charitable bequest in their estate plan compared to 2% to 5% of the general population, according to the company’s 2022 Planned Giving Report. The total expected value of those bequests is nearly $2.5 billion. Single users made gifts averaging $57,563; married couples’ average gift was $43,826. Schmitt and Spradling expect demand for estate-planning tools to continue escalating as aging Boomers transfer generational wealth estimated at $53 trillion to more than $68 trillion. Ideally, many will be motivated to leave a legacy through bequests to the environmental, religious, social, and humanitarian causes they hold dear.
FreeWill’s founders met in their first weeks at Stanford GSB. Schmitt, who directed email fundraising at the Democratic National Committee under President Obama and headed innovation at Change.org, pitched the idea to Spradling, who had experience in private equity, consulting, and impact investing. She loved it, and they quickly began collaborating.
What Schmitt calls their “wildly different” skill sets have been an asset. From Seattle, Spradling oversees product management, design and engineering, product opportunities, and finance. Schmitt, in Miami, is responsible for sales and marketing and customer success. FreeWill went fully remote during the pandemic when Schmitt and Spradling shuttered their New York City office and sent their 35 employees home. Today, Freewill has 200 employees across the U.S.
Competitors such as Legal Zoom and Rocket Lawyer also provide free or low-cost estate-planning tools, but what differentiates FreeWill, say the founders, are state-specific templates and questions to help users pinpoint the ideals and ethics that motivate charitable gift-giving. “There’s a lot of values implications in doing estate planning,” Spradling says: “Who are the people who matter to you? What are the causes that matter to you?” That angle has resonated with mission-driven nonprofits seeking to reach like-minded donors and prospects.
As the pandemic eased in early 2022, FreeWill raised $30 million in a Series B funding round led by Bain Capital, one of Spradling’s former employers. They’re investing that capital in staff and a smart-giving suite to make it easier for non-profits to accept bequests of stock and cryptocurrency. They’re also expanding into selling estate-planning software to banks and lawyers. “We shouldn’t have paralegals filling out Mad Libs when they can be using software to really speed up what they do,” Spradling says.
She and Schmitt share a lofty goal: Have FreeWill be the conduit for $1 trillion in legacy gifts to flow to charitable causes while transforming how estate planning is done. “The biggest litmus test for me is after FreeWill was created, all the other online estate-planning forms added a charity section,” Spradling says. “And there is no doubt in my mind that… hundreds of billions of dollars extra will go to charity because we happened to start it when we did. That, to me, is a success.”
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