Posted 122 days ago

The Changing Landscape of Doing Good

by Cindy Todd

Philanthropically speaking, giving is down.  In an article by Lauren Wilcox of Heifer International, she cites Giving USA’s recent report:

In 2008, giving to charitable organizations plummeted by the largest percentage in five decades (5.7 percent, adjusted for inflation), said a report released in June 2009 by the Giving USA Foundation. Alarmingly, the decline most affected those charities providing basic human needs. Those organizations providing services like food and shelter were among the first to report declining contributions and suffered the steepest declines. Giving for these kinds of organizations was down 15.9 percent, adjusted for inflation.

While this period of serious economic downturn will likely recover, giving habits probably won’t. In fact, “recover” may not even be the right term.  One of the emerging trends from 2010 to 2020 identified by MSA is a challenge particularly for non-profits: a decrease in charitable giving.  Charity is changing and evolving.  Giving will become more strategic, more focused, more intentional.  It will be less about “outputs” and more about “outcomes.“  Nell Edgington writes on her Social Velocity blog,

. . .nonprofits will begin to understand that they will attract more capital if they can demonstrate a social return on investment, or a change in outcomes, not just outputs.  Outputs have been a favorite of the nonprofit sector, i.e. 500 kids went through our after-school program, 1,000 meals were served in our kitchen. But outputs don’t demonstrate social impact, or a change to a problem.  Outcomes do, which is what investors increasingly will want to see.  Outcomes are about changed lives, changed trajectories.  It is so much more powerful and compelling to be able to say that the 500 kids that went through our after-school program stayed in school and increased their academic achievement which was a marked difference from their cohorts that didn’t attend our program.  Then, if you can continue to track those children and demonstrate that they continued to stay in school at a higher rate than their contemporaries, you have a compelling change to a trajectory.  You begin to show how your organization is an intermediary between donors who want to invest in social change and a change you are making in the community.  I believe that philanthropic capital will begin to flow more readily to those nonprofit organizations that can demonstrate outcomes as opposed to outputs, and those nonprofits that can comply will be more successful at attracting capital.

Traditional government and philanthropic institutions have begun to curtail entitlements and giving. Whether due to diminished resources or shifting expectations, non-profits have had to rethink the “how” of doing business.  Doing good is no longer the eminent domain of traditional NGO’s.  In Forces for Good:  The Six Practices of High Impact Non-Profits, author Leslie Crutchfield writes:

The global philanthropy game is no longer about making money and passing it on to heirs or donating it to traditional charities like an alma mater, local opera company, or United Way. The new philanthropy is all about leveraging financial resources by investing in the most entrepreneurial agents of change – those that have figured out how to scale their impact  exponentially…

From co-ops to coffee, beads to B-corps, and micro-finance to the new monasticism, social entrepreneurship runs the gamut.  One observer writes, “A social entrepreneur isn’t satisfied to give the man a fish or to teach the whole village to fish. He won’t rest until he has revolutionized the entire fishing industry.”

The key word, here, is entrepreneurial.  Social entrepreneurship has seen a significant rise in recent years and as dollars decrease, it is becoming increasingly evident that those who wish to “do good” need to do it more strategically and collaboratively.  In this article, I will address several varieties of social entrepreneurs: those focused on international development issues, those focused on importing socially responsible products for US consumers, a certification organization which addresses the corporate side of economic ethos, and finally local creative responses to our very own domestic economic downturn.  All are imaginative, responsive, and have every intention of becoming profitable.  These days, profitability equals sustainability and sustainability means longevity. 

The term social enterprise is intuitively unsettling to many.  Edgington describes them as organizations (companies) that create social impact through market-based activity. “One Village Coffee”:http://www.onevillagecoffee.com/ is one such company.  Based in Souderton, PA, they are polished, produce an excellent product, and have an elegant marketing plan.  They are wholly committed, however, not only to profitability but also to fair trade practices.  They are relationally sound.  Partnered with Nigerian coffee growers (and others), they have put in wells, contributed to the grower’s own community charities, and pay fair prices for the beans.  Here’s a brief description of the project from their website:

Since our inception we have had a big place in our hearts for Nigeria. We have had the great opportunity to provide micro loans to some native entrepreneur coffee farmers there that are doing some great things. They have been growing, roasting and selling coffee to the local villages for a few years, and this year we got our first shipment of coffee in. It has been three years, and it is a very cool thing to see it come to fruition.

They exemplify the new social enterprise.  Consumers have become more and more selective about their purchases in terms of global impact.  One Village Coffee has successfully met a niche in a highly competitive sector…all while “doing good.”

Freedom Stones founder Leah Cypert-Knippel began working with human trafficking victims as a missionary with World Concern in Thailand.   She has begun a small business training women in Ghana and Thailand in jewelry-craft.  The pieces are lovely and carry a message: “Our purchases can have a positive impact on women from the other side of the world.“ Leah writes:

Some might call it ‘social entrepreneurship’, some might call it ‘holistic development’; we call it Freedom Stones.  The mission of Freedom Stones is to transform the lives of women and children vulnerable to human trafficking and exploitation.  This transformation is enabled through the sales of fair trade handicrafts made by victims or those at risk, and by working in partnership with local organizations to facilitate sustainable economic development, holistic training, and empowerment of vulnerable communities in order to break the cycle of poverty and injustice.

Shore Bank, a community development bank with roots in the Midwest, is proud of the Evergreen Cooperative Laundry.  The commercial laundry facility is owned by Cleveland community members.  It is located in a community struck severely by the recession where the neighborhood’s average household income is $18,500.  The workers/owners are trained in business, administration, and small business management.  Not only is this a great opportunity for the co-op’s owners, but additionally some of the profits are then seeded to new cooperatives.  Evergreen is intentional about meeting market demand by highlighting the use of green technologies and becoming LEED certified.   The venture has been highlighted nationally through publications such as The Christian Science Monitor, The Economist and Time magazine.

One especially interesting development is the move towards a certification process for socially-minded companies.  Think Fair Trade certified, but much, much bigger. The certification is referred to as becoming a  “B-corp”. On their website, they describe why B-corporations matter:

bq. Our vision is simple yet ambitious: to create a new sector of the economy which uses the power of business to solve social and environmental problems. This sector will be comprised of a new type of corporation – the B Corporation. B Corporations will be legally recognized by the states, tax preferred by the IRS, and valued by investors and consumers. In a generation, this marketplace of B Corporations will reach 5-7% of US GDP — the size of the non-profit sector today. As a result, individuals and communities will have greater economic opportunity, society will have moved closer to achieving a positive environmental footprint, more people will be employed in great places to work, and we will have built more local living economies in the US and across the world.

Mustard Seed Associates is also in the embarkation phase of a new social enterprise.  We are in the planning stage to create a living, breathing rural monastic community while also designing a facility for semester-long experiences for college students.  It aligns perfectly with the MSA vision, is strategically the right time and, we believe, highly sustainable.  Entrepreneurial? Yes.  Revolutionizing the whole fishing industry?  We sure hope so.

---

Add your comment or view comments » 1 people have responded