Increase profit by supporting a nonprofit
Posted on April 23, 2009
Filed Under Business Ideas, Economy |
We all know, we all talk and we all hear daily in the news or in conversations with our peers how bad is the economical situation worldwide and how worst it is going to become during the coming months. The data shown is not surprising anymore but is rather starting to become annoying, as if media would be trying to cause panic among masses by monopolizing all channels with catastrophic information. We have all heard that already, haven’t we?
Nevertheless, when we think about the current situation, it usually comes to mind the image of a big banker now unemployed willing to commit suicide, or a family unable to pay their mortgage but, are we considering those that were already living under poverty conditions? What is happening to them? Shall we start thinking about lowering the one dollar a day standard that marks the limit of extreme poverty?
Let’s now think about nonprofit organizations, those involved in giving without expecting to receive.
Although there are officially 27 types of tax-exempt organizations (e.g. nonprofits), including those engaged in civic, patriotic, recreational, political and social activities, I will focus here in those developing their work in order to benefit others’ lifes without creating any financial gain for their members (this does not include coaching your kids’ baseball team or organizing a cultural exchange in your city, for instance). Thus, this could be summarized in two main types of organizations.
On one side we have those organizations that try to help, locally or remotely, people overcome a natural disaster or a personal crisis. One could guess that the number of customers seeking for support of this type of nonprofit -in particular for the second profile- is everything but decreasing, thanks to the economic turndown and the increasing difficulties people are finding in developed and under development countries (such an inaccurate way of labeling societies, by the way).
On the other hand there are those focused on improving lives of those who happened to be born in a country without the resources we are able to enjoy, such as a proper health, sanitation, education or employment opportunities. Some of the most known examples of this would be associations like Bill & Melinda Gates Foundation, Howard Hughes Medical Institute or Unicef, among many others. These follow a traditional model in which individuals or corporations (or government) donate their money and they invest this in building up (literally or metaphorically) ways of improving the life conditions of those in need. Others, like United Nations Volunteers or Nabuur, strike to connect volunteers worldwide that don’t need to go onsite in order to help but rather offer their time in order to organize tasks, translate documents, plan strategies or obtain funds. These are the ones that, ultimately, may be able to save the world by making it sustainable through a version of crowdsourcing.
Nabuur and UNV have a database of thousands of volunteers willing to support a cause, but the lack of a proper strategy is sometimes creating a broken channel of communication between the organization and those volunteers, tending to a loss of interest and, ultimately, loss of this support.
If this wouldn’t be bad enough, the crisis is making companies shorten their budget for social initiatives, provoking that funds become more difficult to obtain -as if it was not enough- and many NGOs are forced to lay-off their small staff or even stop their activities. Just a replica of what happens in standard for-profit associations.
With profits going down and (let’s call them) nonprofits 2.0 needing help in order to prosper, why aren’t businesses trying to mix both scenarios, in which companies outsource their non-core business to nonprofit organizations?
By merging the need of companies eager to reduce costs and the underused human resources of some nonprofits, the idea is to utilize the base of volunteers and locals living in poverty conditions in order to produce low-cost services and products for those companies that wish to decrease their costs. In the same fashion they do know with countries like China or India, but doing it this time by using a combination of specialized workforce (volunteers) and affordable employees (those living, for example, in Central Africa or Western Asia). By doing this, three objectives are met:
- Reduction of businesses’ non-core expenditure.
- Increased loyalty from volunteers due to incentives per accomplished work, either directly financial or through a goodies/coupons/discount system.
- Improved quality of life of those involved locals by providing them with employment and a fair salary.
We have the companies with needs, the database of volunteers and the millions of people in need. In order to link this together, everything that is needed is just a proper platform.
By creating an interface in which all peers can interact, business would be able to post their need. After the approval of a project, local workers would take care of the ‘rough’ tasks, those who don’t need a high level of specialization and can be performed remotely, and first-world volunteers would act either as project managers or help refining the work done by those locals. In the middle, an organization would be held responsible for the commercial side of the venture. Besides finding potential customers and involving them, it would provide the public and private interface and coordinate in a high level the development of the projects. Something like a ‘business-oriented nonprofit 2.0’.
For work done, volunteers would receive either money or goodies and workers a percentage of the total income produced by the project, always assuring a fair salary in terms of African or Asian standards. The organization would keep a commission equivalent to development and staffing costs.
Eligible projects would be:
- Those that involve only digital platforms, as ‘physical’ products require going through customs (slow and expensive);
- Not extremely specialized, as most workers won’t have high level education, just an internet connection.
As such, some ideas would be a travel agency - finding good accommodation in not-so-touristic places-, an online language school, data formatting and processing services, online secretary services -booking trips, organizing agendas, etc- or a dealer finder, for example. More proposals are welcome.
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