Calling all aspiring founders of social-impact organizations: You don't have to become a nonprofit in order to lead positive change. You can foster serious community transformation and solve important social issues while still turning a profit. And that profit...get this...can enable you to sustain and scale your organization so that you can increase your impact without having to rely on the hopeful generosity of others.
At the root of it, every organization needs some sort of "income" in order to run their operations. For some, the necessary income source is donations. But often, if a founder considers the services their venture will provide, they will be able to identify a smart, sustainable profit center. Before deciding to be a charity, it's worth understanding how profits can be used to increase the ultimate impact of an organization...while building something that can sustain founders, employees and investors as well.
Consider these award-winning social entrepreneurs:
1. Anna Stork and Andrea Sreshta: Perhaps you've seen Luminaid's pitch on the Shark Tank. These two architecture graduate students were tasked with developing a product to help with post-hurricane relief in Haiti. They focused on solving a serious safety hazard...darkness in the face of a natural disaster. Stork and Sreshta designed a light-weight, portable bag that produces a long-lasting solar-powered light when inflated. Their social mission, providing a battery-free light to those in need, is very compelling. And their "Give a Light, Get a Light" sales program is not only profitable, it enables them to help people in crisis. From typhoon victims in the Philippines, to young girls in Rwanda, Luminaid is providing light where it is most desperately needed. These two women are likely to become millionaires while saving countless lives.
2. Pandwe Gibson: Pandwe wants to build a "green economy" that is good for people and good for the environment. She has launched an accelerator and incubator of eco-friendly businesses in the heart of Liberty City, a neighborhood in Miami that struggles with poverty and joblessness. In its first year, EcoTech Visions is launching 18 green businesses, ranging from biodegradebale cutlery to electric scooters. EcoTech Visions does have a non-profit component, and Pandwe is the grateful recipient of many grants to help scale her vision. But within short order, her model for social impact will be completely self-sustaining. She charges a modest tuition from the businesses who participate in her accelerator in exchange for a curriculum, support models, and physical space for business growth. Gibson also invests in the businesses that she grows, and through their success, she (and her company) have the potential to experience tremendous upside. Pandwe isn't just accelerating businesses that will sustain the earth. She is building an establishment that will provide living-wage jobs, and that will sustain itself through the success of its members.
3. Jason Aramburu: Jason is founder of Re:Char, a social venture trying to solve agricultural problems at a local level. He takes waste product and blasts it with pyrolysis (high heat, low oxygen) forming a clean energy source as well as a "biochar" product that helps farmers grow more produce. Re:Char sells biochar to farmers at a low cost, simultaneously recycling waste, enabling increased farm productivity, and making a profit. He teachers farmers how to use the biochar, and also sells kilns that can be used to produce it in an affordable way. Brilliant.
These social entrepreneurs, and so many others, are blazing the path of a new economy. They produce their own income while solving important global and local issues, improving the world while making a profit. From summer camps to educational technologies, health services to arts programs, social entrepreneurs are finding smart ways to go "for-profit with a cause". From selling product to charging fees, to even splitting an entity into nonprofit and for-profit arms, there are many ways to creatively and sustainably grow your impact-organization.
Don't get me wrong. Being a traditional nonprofit can yield tax benefits for organizations and donors, and for some entities, it's the smartest way to lead change. But as more social-impact organizations go the for-profit route, there will be increased benefits for those whose businesses give back to society. If you are a hopeful founder, consider your options. There's more than one way to structure your social-change organization, and it's possible for you to use profits to fuel your impact, and fuel yourself.
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