I don't run a non-profit. There are lots of non-profits in America--in Detroit, parts of Wall Street, etc. I run a not for profit. We're a business. The only difference is that instead of selling soap or sneakers, we sell hope and leadership.
For a long time, the for profit world has told us in the not for profit sector to behave more like businesses. "You should treat people like investors," they say. And they urge us to "Have greater transparency."
So this week, Do Something launched an IPO. Its an "initial partnership offering." We're selling shares as a means of raising capital necessary to scale our programs.
True, this IPO is quite like the Hotel California...you can check in but you can never leave. (In other words, these shares are purely philanthropic as investors will not earn a profit.) But it isn't a gimmick or a "lipstick on a pig." We spent nearly a year creating this document, this plan, and these metrics. And, we didn't use an outside firm to help us do it. A group of six people from our Board of Directors and three of our staff wrote more than 15 drafts, pouring over every word and chart. Forget the money, the exercise alone was immensely useful.
Do Something's IPO is also about another level of communication with our supporters--in this case, our investors--and transparency that is rarely seen in the not-for-profit sector. No one is going to get an umbrella or tote bag in exchange for their investment. What do investors receive? A quarterly dashboard and quarterly earnings calls, an annual shareholder meeting, and clear metrics leading to 10-fold growth in just three years.
Here's how it works:
* Shares are 100k each. Shareholders can just write a check for 100k or "be responsible" for that 100k by raising it from others. It is payable 6 months from the date of signing the shareholder agreement.
* There are 80 total shares available, for a total of 8 million dollars.
* 10 shares were purchased before we even launched. We expect it to take 18 months to sell the remaining 70 shares.
* These shares are purely philanthropic in nature. By law, they do not represent a commercial interest in Do Something.
The Economist wrote about our IPO last week--and tweaked us for not giving shareholders voting rights. I think The Economist has a point. So at our October board of Directors meeting, I'm going to suggest that we take this one step further and give shareholders voting rights. Stay tuned....