Nonprofits are transitioning into money-making businesses. In the past few years, for-profit companies have run limited time promotions; you, the consumer make a purchase and the company, in turn, makes a corresponding charitable donation. They actually build into their permanent sales model a corporate donation to a charity with every consumer purchase. For example, if you buy shoes or accessories at “toms.com“, that purchase will trigger a donation to a cause or charity that you can select on their website. Buy a pair of glasses at Warby Parker, and the company will donate an equal pair of glasses to someone in need.
Now, we are seeing a movement going in the opposite direction. Thane Krueger, Ph.D., executive director of the Miller Center for Social Entrepreneurship said:
What we’ve seen in the past four or five years is nonprofits saying, ‘How can I adopt some of those entrepreneurial principles to make our impact more sustainable?’
Nonprofits have sometimes evolved from an innovative charity to a thriving business, and at times to creating a truly unique and desirable product.
What should a nonprofit do when the general public wants their distinctive goods and services?
While traveling in Nairobi, Kenya, Kenton Lee had an awakening or as he mockingly says, “the only idea I’ve ever had.” He noticed a little orphan girl trying to wear shoes that were painfully too small, and observed someone solving the problem by cutting off the front of the shoes to allow her toes to stick out. Right there, he thought; “Wouldn’t it be nice if there were shoes that could grow?”
He returned to Boise, Idaho and he created a simple yet functional design of a sandal style shoe that can “grow”, or expand 5 sizes.
He founded the nonprofit “Because International” which has distributed more than 250,000 pairs of “shoes that grow”, to needy recipients. Then something curious happened. American parents with young children wanted to purchase these expandable shoes for their growing families.
How could a nonprofit sell shoes for profit?
Lee went through “a lot of soul searching”, and questioning this mission drift. He questioned the motives, and the greed factor and finally concluded it was the right thing to do to. In 2018 he started a for-profit corporation, “GroFive” and started selling “Expandals” (expandable sandals). With the help of Kickstarter and his own money, this new corporation was created. The company now sells these shoes to the general public with 6.5% of the total revenue going back to the original nonprofit.
Another nonprofit Grameen Foundation is a huge innovative organization that uses the power of technology to help the poor in the Southern Hemisphere. The organization has developed an app to assist Colombian farmers improve their productivity. The app was designed to work without the need for WiFi. Once again the general public liked the app and wanted it. Grameen set up a new company, TaroWorks. This new for-profit company offers the general public tools to manage offline field operations. TaroWorks’ mobile CRM lets the user collect information, analyze metrics and manage fieldwork in real-time.
Yet another example of a charity organization that saw a need to transition to a profit format, is “Speak Your Silence”. This is a platform that aims to conquer the stigma of sexual abuse by leveraging the power of positive dialogue with survivors. They try to be inclusive in all local areas, even reaching people in rural communities, utilizing a white van, affectionately named, ”Vanna White”. Vanna and her team have engaged with thousands of survivors who otherwise would have stayed silent. Speak Your Silence offers free professional counseling and accessible assistance to anyone who needs to speak. Since the #MeToo movement, the need for a for-profit version to give a voice to employees in the workplace was an area that could use this type of service. WeVow was born as a for-profit organization that takes a stance against workplace misconduct.
GrantWatch’s entire mission is to level the playing field for large, mid-size and small nonprofits with real-time access to currently available grants. GrantWatch is an example of a for-profit entity that encourages its users to contribute to fundraising campaigns. This is accomplished by using it’s crowdfunding site.
The bottom line (to use for profit lingo) is that both the charity and the corporation have contributed in their own separate and unique ways, and together the combination has impacted a greater number of people, and that’s a good thing.
About the Author: Jake Tewel holds a Masters Degree from YU, a wine seller, caterer and a million miler for the past 15 years. Jake is a best friend, great neighbor, your go-to travel person, father, grandfather, and loving husband. He is now focusing his efforts on heart-healthy nutrition, exercise, and travel.