Tuesday, July 29, 2008

Using Business Wisdom For Social Compassion

This weblog has written posts on change-agent organizations or non-profits using fundamental business practices to increase their economic viability. When it does, it very often gets its ideas from The Entrepreneurial Mind, which wrote another article in this vein on 6/4/08, Business Turns Profits into Charity.

MyBusiness magazine (from NFIB) has a feature written by Emily McMackin on a for profit social venture called Giving Tree ....
... which sells the GiveCard---a prepaid Visa or MasterCard that allows recipients to donate 10 percent of their gift to the charity of their choice---Nicholas and cofounder Jeff Jacobs discovered that consumers were eager to give back.
McMackin interview me (Jeff Cornwall) for the story and was curious about the growing trend of more for profit social ventures.
Young entrepreneurs today are taking this tradition a step further by forming businesses to tackle specific problems in society, says Jeff Cornwall, director of the Belmont University Center for Entrepreneurship in Nashville, Tenn.
Without the IRS constraints that nonprofits have or the need to beg donors for money, these social entrepreneurs are finding more freedom to bring about change. Rather than trusting in these large institutions they don't think are effective, they're going out and solving problems at a grassroots level, Cornwall says. Given the interest we are seeing in students wanting to learn about social entrepreneurship, this is a trend that is likely to continue.

The New York Times ran a story on the same subject, social-entrepreneurship. This time though the focus was on Internet technology. When Tech Innovation Has a Social Mission - New York Times April 13, 2008.

diigo tags: innovation, web2.0, technology

Now a new style of “hybrid” technology organization is emerging that is trying to define a path between the nonprofit world and traditional for-profit ventures.They're often referred to as “social enterprises” because they pursue social missions instead of profits. But unlike most nonprofit groups, these organizations generate a sustainable source of revenue and do not rely on philanthropy.

Revenue is life blood for an economically viable entity, whether it is a corporate business, a entrepreneurial artisan or a social-entrepreneur. Revenue usually derives from some form of value added or productivity enhancement, though who provides the revenue and who benefits from the value-added may not always be the same.

Brewster Kahle, who has founded a number of successful Internet companies, as well as the nonprofit Internet Archive, said: “If we do this right, I think there is momentum here. The next major operating systems company might be a nonprofit.”
Mr. Kahle says he is developing a set of principles that he hopes will help formalize his idea that there is a middle ground between the technologists and the capitalists. He ticks off operating guidelines like transparency, staying out of debt, giving away information and refusing to hoard.
TechSoup distributes products from 32 commercial companies, including Cisco Systems, Microsoft and Symantec, to roughly 50,000 organizations annually, for a small administrative fee.
“We were just trying to meet the needs of nonprofits,” said Rebecca Masisak, co-chief executive of TechSoup.
“Computer technology and the Internet are lowering the cost of doing business,” said John Lilly, the chief executive of Mozilla, the Web browser developer that is being subsidized by advertising revenue from the search engine business.

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