Social Entrepreneurship | Rosetta Thurman

Groupon, Philanthroper and the False Dichotomy Between Nonprofits and Business

In the past month, a bunch of interesting conversations have been happening around the growing popularity of group-buying sites and how some of them are being used to support philanthropy. I wanted to highlight and connect just a few of these ideas to the relationship currently being played out among nonprofits and businesses, as well as some of my evolving thoughts about social entrepreneurship.

The Groupon Non-Debacle

If you haven’t heard of Groupon, you either live under a rock or you never use the internet. The deal-sharing site has become insanely popular with savvy shoppers over the last two years. Until this past Sunday, that is. I don’t watch TV, let alone the Super Bowl, but of course since I spend a lot of time on Twitter, I saw the Groupon commercial brouhaha on my timeline with people up in arms about their “insensitive” ads. After watching the commercials and taking a look at the site, it was clear to me that the company purposefully pushed the envelope to get press – and are using the buzz to donate some big money to related charities. A risky move for sure, but pretty much a non-debacle as far as advertising goes. Although Stacey Monk’s post on the Epic Change blog expresses dismay with the Groupon ads, I think it spoke more to her disappointment with the company’s founder, Andrew Mason, selling out social change for a lucrative career in business.

Why I Love Philanthroper

Since the new website Philanthroper launched last month, it’s gotten a ton of mainstream press from places like Fast Company to popular techie news sites like Ars Technica. While there’s a ton of buzz all over the ‘net, the best description of Philanthroper comes from their FAQs:

You know those daily deal sites? We’re another one of those. But instead of selling something, we’re sharing the story of a new 501(c)3 nonprofit every day. And if you’d like, you can give them $1. We’re trying to make doing good a habit.

I have to admit, in general, I’m not a fan of microphilanthropy or all these little Groupon copycat sites that keep popping up, claiming to benefit charities. But the Philanthroper model seems different, somehow. It’s run by Mark Wilson, an entrepreneur whose only “connections” seem to be in journalism, not organized philanthropy, which I think is a good thing. Mark has taken a purely for-profit model and turned it into a simple way for nonprofits to get real exposure and connect with new supporters via social media (just take a look at the Facebook comments underneath each “deal”). But what’s been most interesting to me are the comments on each article that gets posted about Philanthroper, with people wondering if Mark’s going to make any money off of the site or take overhead from the donations given. Th public’s reaction to this particular social enterprise seems to reflect the public’s view of the nonprofit sector in general – that no one should earn any money whatsoever while doing good.

Which brings me to the main point that I want to make about these conversations.

Nonprofits Are Businesses, Too

The founders of Groupon and Philanthroper are leading companies just like the next CEO, trying to give something back to the community in the process. Same as nonprofits, if you think about it. Nonprofit leaders are simultaneously running organizations as well as creating community impact. The only differences are the bottom line and the tax status. Indeed, through the V3 Campaign, DC Central Kitchen President (and one of my most inspiring mentors) Robert Egger has continually shared his great thinking about the fallacy of the dot.org vs. the dot.com. Sean Stannard-Stockton has also posted some good thoughts about this peculiar separation as well. In our rush to marginalize entrepreneurs like Mark Wilson or the folks behind Groupon as moneygrubbers, we have to remember that as organizations go, nonprofits themselves are simply another form of business. When you peek behind the curtain, especially at the aspects of finance, HR, marketing, fundraising/sales etc. there’s hardly a difference. If we look at it that way, nonprofits have way more in common with for-profits than initially meets the eye – and folks like Andrew and Mark can actually be considered social entrepreneurs.

The Growth of Social Entrepreneurship

Other bloggers write about social entrepreneurship much more eloquently than I will here, but the truth is that it’s a steadily growing field that offers new possibilities for all kinds of leaders to straddle the two sectors and effect social change. As I alluded to at the beginning of this post, my views on social entrepreneurship have changed a bit since I wrote this piece about why people should stop doing their own thing and start fixing what’s broken. While I still don’t agree with the automatic conclusion that you need to start your own organization, I can more clearly see the value and sustainability that a for-profit enterprise can bring to a social mission. Group-buying sites are just one example of how the business mindset can support philanthropy. Organizations like Hot Bread Kitchen and Shea Yeleen take that idea a huge step further and build entire businesses around helping specific communities of people. Overall, I think most of it is good for the marketplace and we should keep watching for lessons to apply in and across all sectors.

What are your thoughts on the group-buying/philanthropy trend? Do you think social entrepreneurship and blurring the lines between nonprofits and business is a good idea?

Working at a Nonprofit Does Not Equal Social Change

For this month’s Nonprofit Millennial Bloggers Alliance post, we are tackling defining and measuring social impact. Follow our conversations on Twitter using #NMBA

Last week, Collen Dilen wrote a great blog post called, Does Writing a Check to a Nonprofit Equal Social Change? as a response to my November 11 radio show where I said that no, it did not.

It made me think of Penelope Trunk’s recent post pointing out that you don’t have to work in a nonprofit to do good. She also said that some nonprofits do more good than others. I took that to mean that some organizations produce more social change than others. The measures are arguable and I don’t think we’ll ever agree on them. But I do think that if you work in a nonprofit, you can tell pretty quickly whether your mission is being fulfilled and your community is being helped. Note that I did not say “served.” I said “helped.” Coordinating volunteers to serve food at a homeless shelter is much different to me than mobilizing volunteers to rally for legislation that would help get the homeless off the streets and into homes. That difference lies somewhere along the lines of what Archbishop Hélder Câmara famously said:

“When I give food to the poor, they call me a saint. When I ask why the poor have no food, they call me a Communist.”

I think you must do both in order to effect social change. But we can argue about that, too.

You can also tell when a nonprofit was formed out of a founder’s hubris, and the mission is pure bullshit. I’ve met so many of these types who wanted to start a business, but thought it was easier to file as a tax-exempt organization under the guise of helping people. But the only people who get helped are themselves. Cash rules everything around them.

So yes, I agree with Penelope on that point. Just because you go to work at a place that the IRS has deemed tax-exempt doesn’t mean you’re effecting social change. Not just by collecting a paycheck, you aren’t. Not just by doing what you’re told to do and keeping your head down, you aren’t. Even if you call yourself a social entrepreneur, it doesn’t automatically mean you are effecting social change. There’s a lot more to it than that, and I think it depends on how you define the change you’re trying to bring about. If it’s to reduce poverty in your community, for instance, are you doing that in your current role? You could be the development director for a nonprofit whose mission is just that, but does the money you raise enable that mission to occur? Does the bulk of it go to serving that community in a way that truly improves it?

Trabian Shorters,Vice President for Communities Program at the Knight Foundation wrote a brilliant guest post on the Catherine B. Reynolds Foundation Program on Social Entrepreneurship blog last year. His view was that the term “social entrepreneur” means nothing.

I know that the many people who want to make social entrepreneurship a “field” say that we should have many levels of tolerance – from charismatic prodigy to nonprofit paper shuffler. Fine by me but let’s not confuse wage-making with changemaking.

Social change is NOT a field. It is a calling – a profession in the original meaning of the word. You may be called by your faith, your conscience, your ancestors, or your circumstances but the optimistic belief and integrity of a zealous changemaker (by whatever label) is vital to human progress. That makes it sacred.

We call our profession the nonprofit sector, with even more specific professions within that called fundraising, program management, volunteer coordination, etc. And I often see myself as supporting those that “do the work of social change.” But I agree wholeheartedly with Trabian that there is a distinction and we should not confuse every nonprofit employee with being a social changemaker. He puts it much better than I could:

The desire to simultaneously “make a difference” and “earn a living” is admirable and good – but you do have to prioritize one over the other. There is no “program” for social change nor a meaningful life. You must already have that desire kindled inside of you. It is the root of courage. For some, the desire to make a difference smolders and for others it burns. The rest are faking. Like any true love, it is impossible to embrace “social change” from a safe distance.

Think about that. No, really. If your aim is to come to the nonprofit sector to make a difference, have you chosen the right opportunities to allow you to do that? Was your aim to get a nonprofit job with a great salary or did your passion for the cause drive you to where you are now? Are you working in the nonprofit sector or are you effecting social change? Be honest with yourself. You can do both, but it’s not a given.