Do Good and Make Money

I was thrilled to be invited to attend this year’s FOO Camp in June. It’s a friendly gathering of Friends Of O’Reilly techie innovator braniac hacker types, in Sebastopol, California, and most everyone there suffers from crazy imposter syndrome at first, but warm up quickly because everyone’s so interesting. This year, I decided to pitch a session called Do Good & Make Money, a topic that’s dear to my heart as I start this new venture particularly as I plan the outlines of a working model of a museum.

FOO 2014

I was really happy when about ten folks showed up to my session, in spite of stiff competition in my timeslot. The group was really varied, and the experience around the circle was obvious and exciting. At that stage, I hadn’t even started the new business formally, but posed the question on my mind, summed up by the session byline: Constructing deliberately symbiotic work and power between for-profits and non-profits.

Prior Art

I was looking for real-world examples of the kinds of relationships which exist between for- and non-profits so I could study them and see what was working, or not, and the group had a whole bunch of suggestions, some of which I’ve listed here:

  1. Non-profit arm owns IP
    In companies like Salesforce or Palantir, each .com has an accompanying .org, which can be given the IP and software that the .com creates, to either on-sell at a discount to other non-profits, or simply to own as an asset. It doesn’t seem like much moves back the other way (to the .com), so this relationship is perhaps a little more parasitic than symbiotic.
    Example: salesforce.com / salesforcefoundation.org
  2. Google
    This probably belongs in a category of its own, simply because Google is so huge and has so much cash. Google.org was started in 2005, and funded with three million shares from Google’s IPO. There’s no denying that it’s given a bunch of money to worthy causes since then, and especially prides itself on what’s called direct funding, where the .org works directly with funding recipients instead of going through a middle man. I was thrilled to see a Google.org person at my session!Even though Google’s case is a bit special, it’s nice to see that more companies are working to give back, with things like volunteering time, or foundations, or donations and such.
     
  3. Founder Foundations
    Bill and Melinda Gates, Evan and Sara Williams, Biz and Livia Stone and many more super mega rich founders have created their own foundations. I’m considering something like this, but only on a tiny scale, mainly because I’ve never been successful at getting the bazillions of dollars, or at least, not yet.
     
  4. For-Profit donates services to Non-Profit
    There are all kinds of variants of this type of arrangement, and it has good potential to be really symbiotic, I think. For example, let’s say the non-profit owns a building, perhaps the for-profit could pay it rent to be there. It can be slightly odd sometimes, and I have to say, it feels odd in the case of a company as intense as Palantir, where their “pro bono” work probably definitely still benefits the .com (which is all about big data aggregation, crunching and security. I guess that’s a win-win?
    Example: palantir.com / “philanthropy engineering”
     
  5. Non-Profit owns For-Profit
    This is a model suggested by someone around the circle, based on how he designed his own organization to be both commercial and humanitarian, and it’s the one that’s piqued my interest. Here, again, the non-profit owns data which the for-profit has created, and the interesting thing is that the for-profit itself is also owned by the non-profit. That’s a really interesting dynamic.

Socially Motivated Corporate Structures

It’s also really encouraging to see some formal corporate structures come around which are specifically designed to (mainly) combat the ability for a board or shareholders to change the direction of a company away from “doing good” to “making money.” In the USA there are:

  1. Benefit Corporations
    They have a company purpose to create a material positive impact on society and the environment, and consider the impact of their business not only not only on shareholders but also on employees, the community, and the environment. They’re also required to publish an annual benefit report showing their overall social and environmental performance against a third party standard. About 26 US states allow Benefit Corporations.
     
  2. B Corps
    Are “certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency”, while operating as a “new kind of company that serves the community and shareholders.” There are apparently about 1,000 of these around the world now.You can see an example of the type of reporting required at Etsy, a B Corp in New York.
     
  3. Flexible Purpose Corporations
    I’m pretty sure these are just allowed in California. Starting in 2012, they’re a “new corporate form that will allow a corporation to integrate the for-profit philosophy of the traditional corporation with a special purpose mission that is similar to a charitable purpose.” It’s a way to relax the profit motive for a second in order to be allowed to keep doing social good.

There’s a timely New Yorker article called Companies With Benefits which is also a useful read. In the UK, too, there is the Community Interest Company, something like a limited company, but established to serve the community and not their members or shareholders as a priority. CICs have been around since 2005. There are a loads of examples and other resources at the Office of the Regulator of Community Interest Companies at gov.uk.

If you have any other practical examples of different symbiotic configurations, I’d love to hear about them. This idea of a socially responsible enterprise has been in the back of my mind since at least 2006, and it’s exciting to see how things are moving these days.


Addendum: If you’re curious to read about a couple of other discussions, my friends, Tom Coates and Matt Jones, also wrote up the sessions they ran this year. Tom’s was called Interacting with a World of Connected Objects, and Matt’s was All of this has happened before and will happen again.

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