Canary: Equipping Employers to Provide Financial Safety Nets
Backed by Capital One Ventures, Canary delivers access to emergency relief for employees in sudden financial hardship
August 3, 2022
Rachel Schneider, Founder and Chief Executive Officer of Canary, is working to close the gap in employee benefits and help those impacted by financial hardships rebound faster. Canary’s platform, backed by the strategic investing arm of Capital One, connects employees to critical emergency funds sourced from companies and charitable donors.
“During the COVID-19 pandemic, government stimulus helped individuals weather the financial challenges that arose,” says Schneider. “It will now be critical for companies to be ready to address emergencies in their employee’s lives in a way that is fair and consistent.”
Individuals facing financial shocks often struggle at work, which can ripple across teams — resulting in yearly losses of $250 billion in productivity, according to Canary. At home, recovering from financial hardship can impact health, lead to food insecurity and diminished spending power for transportation and other necessities. In fact, seventeen percent of renters were behind on their rent at some point in 2021, according to the Federal Reserve.
“The impetus for creating Canary came when I discovered many large employers had in-house, multi-million dollar employee emergency funds; yet companies still struggle to manage emergency fund access requirements and lack a streamlined process to distribute those funds,” says Schneider. “We wanted to close that gap and create a product where everyone is able to do this in a seamless, easy and dignified way.”
Canary’s grant application process for emergency relief is designed to preserve anonymity for employees who have experienced a financial shock. As opposed to an employer loan, grants are not expected to be paid back. The funds that Canary helps to manage are charitable donations, so they are not considered to be taxable income for eligible recipients and are tax deductible for the donor.
“We built an application that’s confidential and easy for an individual in the midst of a crisis to use,” Schneider adds. “The application is based on a set of clear and consistent rules, so that donors can feel confident that decisions about eligibility are being made fairly. This has mutual benefits, because employers aren’t responsible for making selective decisions and employees maintain a level of dignity during a vulnerable financial moment.”
Investing in Benefits Innovation for Total Employee Wellness
Since 2014, Capital One Ventures has funded startups driving the future of data, technology and financial services. The strategic venture capital arm of Capital One has invested in more than 70 companies since inception and is broadening reach to mission-driven companies — including Canary — that are empowering consumers and businesses. Through venture capital investments in technology startups, Capital One Ventures aims to harness the power of emerging technology and accelerate Capital One’s progress as an innovative leader.
“The No. 1 issue cited by Americans is how employers treat their workforce,” says Schneider. “That is what people believe most defines what it means to be a just and ethical business.”
Schneider says that while employers often offer a range of benefits like 401(k) and health insurance, financial wellness benefits shouldn’t end there.
A unique challenge facing businesses is how they communicate their portfolio of benefits and offerings, and help their employees make the right decisions. Canary offers companies access to valuable trends and data insights that shine a light on where gaps may exist among the company’s current offerings.
“Part of why we named the company Canary is that the trends in who is applying for emergency relief can give us an early signal about what people need,” Schneider says.
Over One Million in Funds Given
Through a range of emergency relief fund sponsors, Canary has enabled over $1,000,000 to be distributed to employees experiencing financial hardships at companies of all sizes.
“Employees across wage levels are vulnerable to financial hardship, so it’s an incredibly powerful message when your company’s leadership can say ‘don’t worry, we have your back,’” says Adam Boutin, Partner at Capital One Ventures. “Canary is combining technology and employee financial wellbeing to close a critical benefits gap.”
Creating a Lasting Impact
Launched in October 2020, the initial $200 million, multi-year Capital One Impact Initiative seeks to create a world where everyone has an equal opportunity to prosper through advocating for an inclusive society, building thriving communities and creating financial tools that enrich lives.
“The success of early stage, impact-focused startups like Canary is 100% dependent on our ability to find partners like Capital One Ventures,” says Schneider. “We could not be more grateful to be working with investors who see why building a business that has social good matters, who bring invaluable expertise, and who are in it with us for the long haul.”