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Time to Pay for the Revolution!
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dolcevita
Extraordinary
Joined: Tue Oct 12, 2004 11:24 pm Posts: 16061 Location: The Damage Control Table
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 Time to Pay for the Revolution!
Profits for Justice
Its the cover of "The Nation" this week. I noticed it and thought it was interesting. Libertarians are going to have a party with this one. anyone of you guys read it?
http://www.thenation.com/doc.mhtml%3Fi=20050124&s=shuman wrote:
by Michael H. Shuman & Merrian Fuller
..."What we are about," says Housing Works president and CEO Charles King, "is the business of changing the entire paradigm by which not-for-profits operate and generate the capital they need to carry out their mission--a new paradigm based on sustainability and social entrepreneurship." King is helping other nonprofits adopt these ideas through the Social Enterprise Alliance, which recently held its fifth annual conference, involving 600 social entrepreneurs from thirty-nine states and seven countries.
This new paradigm increasingly defines our own jobs. One of us, after raising some $15 million for various progressive nonprofits, decided six years ago to start creating socially responsible enterprises, including community-friendly poultry production, small-business venture capital and buy-local purchasing clubs [see box on page 18]. The other has run a network of progressive independent businesses in Philadelphia, an effort based at the White Dog Cafe, one of the city's top restaurants, which serves food from local farmers.
We believe that the spread of social entrepreneurship, and the positive alternative to conventional fundraising it provides for raising resources, offers a fundamentally new and powerful strategy for progressives to expand their power and their voice in the United States.
Entrepreneurial Nonprofits
Mainstream nonprofits actually have been entrepreneurial for years. Every year the Chronicle of Philanthropy publishes a list of the top 400 nonprofits in the United States, ranked by their fundraising. Re-rank the October 2003 list on the basis of revenues not derived from private sources such as donations and foundation grants, and the top performers, unsurprisingly, are universities and medical centers. Remove these heavyweights, and one finds a fascinating assortment of do-gooders. Lutheran Services, number one, serves as an umbrella for 300 organizations that supplement their many contracts, grants and donations with a wide range of fee-for-service programs to help, among others, the poor, the elderly, the sick, at-risk youth and refugees. Number two is the YMCA, which supports its youth outreach programs with a vast network of health clubs. The American Red Cross, number three, draws blood and sells it to hospitals and health centers. Fourth is Good Will Industries, which raises more than a billion dollars through the collection, refurbishment and sale of secondhand clothing and household items, and nearly another half a billion from fees for contracts and services. In eighth place is the Girl Scouts, which generates millions of dollars through the sale of cookies...
Man, those girl scouts are aggressive. anyways... Quote: ...To get a full sense of how far US nonprofits could go to become self-financing, check out Cabbages & Condoms, a popular restaurant in Bangkok. As your senses become intoxicated by the aromas of garlic, ginger, basil, galangal and lemongrass, you cannot avoid noticing the origins of the name. On top of each heavy wooden table is a slab of glass, under which are neatly arranged rows of colorful prophylactics. Posters and paintings adorn the half-dozen large rooms, all communicating the restaurant's central message: The AIDS epidemic afflicting Thailand can be checked only through the unabashed promotion and use of male contraception. With balloon animals made from carefully inflated and twisted condoms and the after-dinner candies replaced with your own take-home "condom-mints," even teens cannot escape the message prominently framed on the wall: "Sex is fun but don't be stupid--use protection."
What makes the five "C&C" restaurants unique, along with an affiliated beach-front resort and numerous gift shops, is that they are all owned by the Population and Community Development Association, a rural development organization that has been a leader in promoting family planning and fighting AIDS in Thailand. Seven out of every ten dollars spent by PDA on such activities as free vasectomies and mobile health clinics are covered by the net revenues from its sixteen subsidiary for-profits. Were PDA dependent on funding from the Thai government, the World Bank or even the Rockefeller Foundation, it no doubt would be told to tone down the message. Jokes on its website--like "the Cabbages and Condoms Restaurants in Thailand don't only present excellent Thai food, the food is guaranteed not to get you pregnant"--would certainly be discouraged. ..
Well it is true that sources of finance have always had a say in message and method. Self-sufficiency is one way of looking at it. But what happens if the consciousness becomes one of profit. i doubt it, and I do think nowadays that should a vehicle stray, we could take our business elsewhere. The problem is starting up, and sources of information access to consumers. A question for eveyone. i remember Torri once started a thread on if you research where you shop before purchasing goods from them. do you? would you make a point to go out of your way, or to go to internet distributers that had agendas that matched yours?Quote: ...
To many progressives, the notion that nonprofits can enlist the power of entrepreneurship to gain independence and increase their effectiveness is heresy. Philanthropy guru Pablo Eisenberg's view is that "neither charities nor foundations and other donors should harbor the illusion that more than a minuscule number of nonprofit groups can ever become self-sufficient by running businesses or charging fees for their services. Their missions do not lend themselves to self-sufficiency."
The fear that a nonprofit mission will be warped by business values is not, of course, unfounded. J. Gregory Dees of the Duke University Fuqua School of Business argues, for example, that the entry of the YMCA into the exercise and health club business pulled it away from its original mission to serve at-risk young men and made it an upper-middle-class organization. Many community development corporations (CDCs), founded in the 1960s to lead the fight against poverty, now build crass shopping malls and sprawling neighborhoods for the middle class. The bottom-line logic of business can lead these enterprises to neglect people without money, including the young, the old, the poor and the sick.
However, critics overlook the fact that many of these dangers already swirl around those rattling a tin cup for "soft money" from wealthy individuals and foundations. Building a philanthropic base of support instead of an entrepreneurial one can cripple an organization's mission, and wreck it altogether when the well runs dry. Most progressive nonprofits have engaged in a kind of fundraising arms race in which our best leaders focus more time, energy and resources not on changing the world but on improving their panhandling prowess to capture just a little more of a philanthropic pie that actually expands very little from year to year. Armies of "development" staff spend as much as a third of an organization's resources not to advance the poor or other needy groups but to cultivate wealthy donors. Significant numbers of our colleagues create campaigns, direct-mail pitches, telemarketing scripts, newsletters and other products exclusively to "care and feed" prospects, and frame positions and adopt tactics that will not offend the rich...
Well money is money, and the article brings up a good point that it has to come from somewhere. Can the business model actually hold off for better interests than fundraising? Maybe. I have my doubts, because fundraising often has a blank check nature to it that allows for the receiving institution to either set the platform ahead of time and then recruit support, or at least there is less in the way of follow up *proof.* Afterall, what kind of *proof* can be procurred for such things as AIDS awareness. in a sense, and also, in what way? Grants can have string attached. This is fine if the agenda is already compatable...not so if there are irreconsieable differences. As to if business model will work well, I have doubts only because it is 1. Too dependant on immediate consumption and competition. How many books stores can one have before competition is impossible to fund a programme. Not to say a book store can't make moeny, but just enough to support itself, not necessarily a larger institution. Restairants, bars, clothing...all have the same problem. So sometimes money has to come from a more stable space. I don't think its a bad idea, I just think its going to depend on people buying more and more every year, and will fall victim to the same problems for-profit businesses encounter with the market. The difference is that corporations and businesses are supposed to handle those market worries full-time, while for these new non-profit activist institutions, its only supposed to supplement what they deal with full-time. It could completely detract from the original intentions, or just occupy all the value and brain-space. Its still not a bad idea to try, I just think its going to go the route of say, casinos. They made alot of money when there were only a few of them, but now with more and more, each one sees less profit unless they branch off into other venues. while a few insitutions could make a profit now, what happens when everyone tries it? Not a moral evaluation here, just a thought that they'll need to return to fundraising and grants anyways once their entreprenurial spaces stop providing enough money for larger issues.
Last edited by dolcevita on Sun Jan 23, 2005 2:05 pm, edited 1 time in total.
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Sun Jan 23, 2005 1:39 pm |
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Anonymous
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I find the whole idea rather misguided.
Business is business. You're in business to make money. If you're not trying to make money, then you're going to be eaten. If these people feel that being "progressive", whatever that means, is going to make them more money, then by all means, they should go ahead and adopt that attitude. Otherwise, this will not go anywhere.
More to the point, the vast majority of the people do not care where they shop. You can run "buy American", "buy blue", "buy our shit because it stinks less", whatever else campaigns, but they will fail. Most people only care about getting their money's worth.
I'll give you an example from real life. A set of dominos costs $1 at a dollar store. That same set costs $12 at a Russian gift store. Now, as much as I would like to patronize Russian-speaking businesses, there is no way in hell I'm spending $11 extra on the domino set. If it was only a dollar more expensive, then maybe. But not 11 dollars!
So, in the end, I'm glad that they'd rather use business than beg the government for money to raise funds, but as long as they're trying to make a stetment with it, rather than actually make money, this effort will not succeed on the grand scale.
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Sun Jan 23, 2005 1:52 pm |
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dolcevita
Extraordinary
Joined: Tue Oct 12, 2004 11:24 pm Posts: 16061 Location: The Damage Control Table
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Krem wrote: So, in the end, I'm glad that they'd rather use business than beg the government for money to raise funds, but as long as they're trying to make a stetment with it, rather than actually make money, this effort will not succeed on the grand scale.
You play dominos?  But what if the Russian set had faberge-esque designs engraved into the backs of each piece? and had a little faux-guilding?
actually, that's what i thought when i read this. most businesses barely break even, and couldn't possibly provide the funding for something even larger. I guess one or two might be successful, and I mentioned casinos mostly because of the film festivals being started up in CT, etc. These are pretty aggressive and smart, but for everyone one of them there's 200 that won't do it. Yes, its about making money and that will ultimately be a distraction if not the bigger agenda. I couldn't have said it better myself. its too bad though, because what alternative is there then to "begging" the government? I know, fundraisers were mentioned and I posted it in from the article under the "soft money' section, but it still has an equal amount of problems if an institution is trying not to be, well, about the money. #-o
Apparently universities are the only guys that are kind of ontop of different forms.
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Sun Jan 23, 2005 2:00 pm |
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Anonymous
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Yes, I do play dominos, it's a pretty popular pastime where I grew up. My grandparents used to teach me and my cousings arithmetics by playing dominos.
Anywho, in my opinion, the best way out of this trap is to stop thinking of money as the root of all evil. It is not. Money is a tool that helps you take care of things. There are many opportunities to make money that are stifled by the government, and New York city is the prime example of that. Rent control, for instance, is one of the most misguided programs I've ever heard of.
Here's what it boils down. If I run a succesful business, I have two options as to what to do with my money. I can give it away to the needy. Or, I could expand my business, and hire more workers (including those "needy" that I would've given the money to). I find the second option far superior, as it a) keeps me in the black, b) creates opportunities for future expansion, c) helps the needy make money while also removing the sense of entitlement they have.
I posted an article about import tariffs on prawns from Thailand imposed by the EU and the U.S. Now, the west is providing Thailand with hundreds of millions of dollars in aid. Wouldn't it be much better to not have those tariffs to begin with and Thailand taking care of its own problems by spending the money they'd earned with their fishing industry not stifled by the Western countries? The same happens on local scale every day with programs like Welfare and minimum wage laws, etc.
So, to sum this all up, yes, the most succesful "progressive" companies will have to end up worrying more about the bottom line than about the donating. But it is not a bad thing by all means.
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Sun Jan 23, 2005 2:24 pm |
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