Creativity abounds everywhere in the Third Sector, from service providers in the field, to fundraising offices managing more on a shoestring, to a new breed of funders (and well-established funders, too) thinking up new ways to engage with, spur forward, and support their philanthropic priorities. In this week’s article, HBG Senior Researcher Grace Chandonnet shares some of the interesting and creative ways funders are having an impact in the world today. ~Helen
Lately I’ve been thinking about the innovative ways that young entrepreneurs are actively engaging in philanthropy. As my colleague Elizabeth Roma writes, the philanthropy landscape is ever evolving and innovating and appears to be picking up the pace of change exponentially in recent years in what is being referred to as the New Gilded Age. Elizabeth touches on innovative philanthropic vehicles such as the Emerson Collective and the Chan Zuckerberg Initiative, as well as B-Corps and impact investing.
And I’ve also been noting that some entrepreneurs are finding or making their own niche ways of being philanthropic, by incorporating philanthropy directly into their business models rather than as an afterthought as to where to spend profits, or as advertising or marketing.
As Alex French, co-founder of bizzycoffee.com, which directly incorporates sustainability at all levels into its business model, writes:
“it is no longer enough for a business to figure out how it [is] going to turn a profit. Money is still important, but it [is] no longer the be-all and end-all of business. Money has become both result and tool to achieving another end – that is, to fulfill a purpose.”
It seems that building philanthropy directly into the front end of a business as a primary goal coequal with profits, expansion, or customer service, is all the rage – but not necessarily in the same way that certified B Corps do and not in the same way that Corporate Social Responsibility programs are engaged in giving.
Some entrepreneurs, and not just Silicon Valley tech types, appear to be departing from the model of starting a personal and/or corporate foundation somewhere down the road after they’ve already become wealthy and their businesses successful, but rather thinking about the philanthropic aspect of success before they have achieved it.
According to Inc.,
“Corporate philanthropy is nothing new. Businesses have been donating to charity for generations. The problem CEOs had was that this was something extra. All the benefits of donating to a good cause had to be balanced with their core profit-making business practices.”
Take for example Sarah Kauss’ business model. The 42-year-old founded S’well in 2010. The company makes designer stainless steel water bottles that come in a variety of sizes, colors and patterns. In 2016, the company reached $100 million in revenues. Ms. Kauss was always motivated by the desire to keep plastic one-use water bottles out of landfills, but her company also has a very specific charitable component to it. A portion of sales are donated to UNICEF U.S.A. – reportedly $800,000 since 2015 — to help provide clean water to children in Madagascar and other regions.
Anne Sisteron, a former fashion model and founder of Anne Sisteron Fine Jewelry, has also built philanthropy into her business model. Her company partners with her favorite charities, hosting shopping events at her boutique and donating 20% of sales to these causes. Organizations she has partnered with include the I Have a Dream Foundation, the Children’s Burn Foundation, and the Los Angeles Orphanage Guild, among others.
Another example of a company with philanthropy at the heart of its business model is eyeglass maker Warby Parker, launched in 2008 by four Wharton School classmates. From day one of their operations, the company has been partnering with non-profits like VisionSpring to ensure that, for every pair of glasses sold, a pair is distributed to someone in need.
Since its founding, over 3 million pairs of glasses have been distributed through its “Buy a Pair, Give a Pair” program. Kartik Hosanagar, professor of technology and digital business at the Wharton School, writes:
“What was unique about Warby Parker…was its founders’ staunch belief that they could use their for-profit business as a means to changing the world for the better.”
I would be remiss if I didn’t mention another type of innovative business/philanthropic model that I have run across recently in the form of a company called Omaze. Omaze is a startup founded by Matt Pohlson and Ryan Cummins in 2011. It is an online charity platform that provides people with the chance to win experiences that also support charitable causes.
Omaze participants can take part for a donation as low as $10 to gain entry into a raffle-like format in which every participant has an equal chance to win the experience they have chosen. Each experience is paired with a non-profit, chosen by the celebrity associated with the experience, which receives the majority of proceeds (usually 80%) from bids.
The Omaze team picks the winners’ names at random and the company typically receives a service fee of 20% from each auction for the provision of their services. One experience on offer is called Walk the Red Carpet with Cate Blanchett and Jack Black at the premier of their latest film to benefit (RED), whose mission is to pave the way toward an AIDS-free generation. Another is the opportunity to go backstage as Samantha Bee’s personal guest on the set of Full Frontal to support NEXT for Autism.
Another company called Chideo is similar to Omaze, but rather than bidding on experiences, entrants bid on premium video content created by their favorite celebrities.
In our line of work, I am continually impressed and heartened by the forward-thinking philanthropic spirit that we encounter every day. I can’t wait to see what the next young entrepreneur comes up with as a means to make the world a better place.