This entry from the One Post Challenge comes from an anonymous writer who is a serial high-tech entrepreneur and startup investor and now focuses on angle investing and the nonprofit world.
Don’t Be Evil 2.0 – The Fight for “Good” between Non-Profits, Social Enterprises and Responsible For-Profits
I’m in my early 30’s and am new to the non-profit world. As a serial high-tech entrepreneur and startup investor, I always look for macro trends and try to find opportunities. When I joined my first non-profit board, I was trying to understand their social good role in society and also trying to understand how my business sense could help them. In my opinion, things are changing quickly for non-profits and there are going to be bigger changes coming sooner.
I think in the past non-profits had a clear cause-driven goal in areas where the government wouldn’t enter. The interesting part of being on non-profit boards in San Francisco is that I see government doing less and less and non-profits are picking up the slack. The non-profits, I feel, are becoming a layer between government and the community. They are doing more basic tasks as time has gone on like planting trees, handling mediation and child services. The non-profits do it more efficiently by having staff that are more dedicated, not having government overhead and having volunteers’ lower costs. Most importantly, people would rather donate than pay higher taxes. I think it creates a marketplace for community services while lowering our taxes. For example, many non-profits used to get most of their money from government funding, now many are happy getting 1/3 of their funding from the government/city. They have to raise the remaining two-thirds from you(the taxpayer), foundations and corporations. The non-profits compete, government shrinks and everyone has lower taxes.
This seems like a good change. If people feel like the city isn’t green enough, they’ll donate money to “greening” non-profits. But other trends I see happening are really going to change the non-profit landscape totally. The first big change is that major for-profits are branding themselves as “good” and responsible. For example, MTV just launched MTV-Think, a way for non-profits to tap into the youth of America and for youths to find causes they like. Youths trust MTV to be cool and learn about teen issues like drugs, pregnancy, etc. Now, they can trust MTV to tell them good things to do such as take action against discrimination by joining the group “No More Discrimination”. I encourage non-profits to register on MTV and engage young people. But remember, MTV (Viacom, being the parent) also broadcast reality shows like “Shot at Love with Tila Tequila” where a bisexual woman decides her next mate between 16 men and women after they go through certain “interesting” tests. Isn’t it ironic, MTV, if not shaping, is at least branding itself into socially responsible company? Many big companies are also doing the same thing like GE where every division went green for a week with NBC broadcasting green theme shows then.
So far for-profits are chipping away at the brand image that non-profits are the only ones that do good. They have the resources to brand their image and are starting to do more good things for society in part by the badgering of non-profits. Non-profits may not be afraid of big for-profit companies and may want to partner with these companies. But now they have to adjust with small Social Enterprises that are for-profit and are sometimes competing in their space as well as being socially good. Social Enterprises are well funded, usually have more business acumen and are saying the same social good message as non-profits. Now missionary non-profits are having a tough time to differentiate and our getting beat in a business they have been working hard in for many years. As a tougher thing to swallow, someone else is getting rich on their hard work and may not be as radical ethical as them. Some suggest that Social Enterprises may just be a natural evolution in society where profit isn’t the only reason for a business to exist.
I assume these macro changes are even harder for foundations and donors to understand. I don’t have all the answers to this and that is why I wrote this blog entry. I want to encourage debate and discussion on where non-profits need to go. I want to understand whether it is it good that for-profit businesses are doing social good? I think that non-profits should be glad when social enterprises enter the space. It justifies the space. Like a startup that gets a big company to release a competing product; it makes the market size larger. I think that social enterprises maybe more efficient than non-profits and maybe better long term partners as certain social causes enter the mainstream. I think non-profits need to change their mission when this happens and take on more of an advocacy/oversight role. What are your thoughts? Is it good and can a non-profit change itself to more of an advocate? I don’t know the answer to this one. But I would love to see examples of non-profit “industries” that have transformed like this.
I hope I encourage some debate and thought about these macro trends. I would love to get some insights into this for my own long term direction in philanthropy and business. Please understand I may take awhile to respond because I am a busy person. But based on Sean’s email I decided to see what reaction I get and then decide if I start a blog.
Don’t Be Evil 2.0
If everyone is good, who is evil?
I liked what he said. I try to build an Entrepreneurs Investors community. Our idea is to bring to entrepreneurs advice that will help t hem in the growth process. They can post their needs. Most entrepreneurs are too isolated and just don’t know what to do. They also do not have all the financial resources to ask for advice. We will be honored if you can participate to our community.
Thanks and good work!