This is Part II in a two-part series. Check out Part I here.
So what’s the alternative? How can non-profits turn the model upside down?
In simple terms, non-profits can stop being the bottleneck! Rather than play the role of go-between, non-profits can facilitate interactions between donors and their target populations, similar to what Google and your radio do for advertisers and users.
Fair Trade Coffee provides a good example.
Pretend for a moment that you set up a non-profit to support coffee farmers in the developing world. In designing the model, you have a couple of options:
1. According to the traditional model, you might raise money from donors to provide free inputs to farmers, effectively subsidizing their work in order to make the farmers more competitive and profitable. Then, you would turn around and tell donors about the great work you’re doing in, say, El Salvador.
Or…
2. You could facilitate exchanges between coffee farmers and established coffee markets overseas where people are willing to pay more for coffee when they know their purchase is supporting a small farmer. In this case, the “charity” or “free” component is essentially the gap between the market price for coffee and what you, the non-profit wholesaler, and eventually the end consumer are willing to pay to make it a fair trade.
In both cases, you effectively have charity – people’s altruistic motives and goodwill – at work. But again, what makes these models different is that the latter allows a more direct link to be created between the “donor” and the “charity recipient.” Ultimately, enhanced sustainability comes in the form of more engaged “donors” who are immediately experiencing the fruits of their philanthropy and receiving more in exchange for their giving than your stories of good deeds. The “charity recipient,” for her part, is dealt with as a capable, responsible entrepreneur and not as a charity recipient at all, which is far more empowering and transformative.
This is social enterprise broadly defined. If you haven’t already, start thinking about how you can leverage it in your non-profit. It could be something as straightforward as Lutheran World Relief’s “Project Comfort” which calls on donors to sew quilts and create other “kits” for refugee families. The program has been wildly successful, grassroots-driven, and sustainable, in part because it creates a tighter physical and emotional link between donors and aid recipients. On the other hand, it could be something more complex and market-oriented, like The Ayllu Initiative’s mission to bring social enterprise to every community on earth by facilitating microfranchising. Or it can be something wildly different and in-between. What’s important is that you try a few things out and see for yourself what works.
Contributor Profile: Mike Shoemaker
Mike is a graduate of St. Olaf College in Minnesota and a former Fulbright Scholar at the Universidad de los Andes in Bogota, Colombia. Mike currently manages strategic alliances for a global consulting firm, is a volunteer and advisor to The Ayllu Initiative, and blogs at Human Ventures.
Twitter: @soccapital
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