"...in the US, we have a large scale hunger problem."
Today I am going to speak about the crossroads of Profit and Philanthropy.
Some say that to understand where you’re going, it helps to know where you’ve been… My background is big business, where we were taught how to build shrink-ray guns, take over the world and steal the moon. But that’s not really where I am from or what makes me happy. Well… It must have at one point!
Well, as a parent, I wanted to give my kids the best values and morals, work ethic, and strong character. I started to realize that my kids were growing up very differently than I had. Some of the very things that had been pivotal in my development were missing. So, I began to look for ways to address these discrepancies, which one day, landed us as volunteers at a local food bank.
Not only did the volunteering help the kids with perspective, the experience changed my life.
I discovered that, in the US, we have a large scale Hunger problem. Like the majority of the people around me, I thought hunger was a problem that happened outside of our borders. I was shocked to find out that 1 in 6 Americans (that’s over 50 million) goes to bed hungry every night! 17 million of these people are children. That is 1 in 4 Kids, WHICH IS A BIG BIG BIG PROBLEM.
So, this is where my entrepreneurial, AKA business problems solving, tendencies kicked in. I started digging into these larger social issues (Hunger, Clean Water, Poverty, disease, education…) and what solutions we have for them. What I found was that the most prevalent vehicles were non-profit organizations. But while non-profits address these issues; none have been able to permanently solve the causes they were built to address.
I am not standing here to put down non-profit organizations. They have clearly touched and improved the lives of many people.
However, non-profits struggle with key issues that prevent them from solving the cause:
1. They are dependent on the generosity of the community or corporate donations. They simply can’t attract enough funding to scale.
2. Once they get their funds, we scrutinize how the money is spent. If they were to invest in marketing to attract more funding, we accuse them of increasing overhead, being capital inefficient and not focusing on the cause.
3. Many of these organizations depend on an army of volunteers to cover gaps in workforce. We all know there aren’t enough volunteer hours in a day. Just ask yourselves how many times did you volunteer last month?
So, non-profits cannot scale or become a self sustaining to provide permanent solutions for the problem they are meant to address.
In contrast, businesses depend on their products and services to generate profitability, which leads to sustainability, scale and a dependable workforce.
TANGOTAB – When you eat, they eat: it’s a free mobile app that gives consumers great deals at local restaurants, for free and donates a meal to feed a person in need for every time a deal is used. The restaurants get traffic when they want it, TangoTab makes a matchmaking fee and a person in need gets a meal just because you dined out.
Social Consumerism creates a win-win-win model, which means the consumers get their needs met, the business achieves profitability and a social issue gets solved. This is very different than traditional business models where only the first two objectives are met.
Social Consumerism takes the responsibility of the donation away from the consumer. It ties the philanthropic action to what consumers do anyway. Imagine if every time you purchased toothpaste, a dental issue were solved either for a person in need or for advancing research.
This model is really powerful. Take for example the case of TangoTab. Every week, in the US, we eat a Billion meals in restaurants. At the same time, we have 50 million hungry Americans. By tying the cause to something we already do, the math is simple!!! Together we can end Hunger.
In business, “Doing Good” is contagious. We now know that 92% of mothers and 88% of Millennial will buy and recommend products or services if they are tied to a cause. This is how businesses become MOVEMENTS. This is where the human desire for connection makes a business soar.
Think about all the things we consume or purchase every day. Imagine if each of these items were tied to a cause. Think about the number of humanitarian issues that we can solve, by simply tweaking the current models. Think about the global implications and the impact we can have.
I believe that the way to eliminate our social problems is through Social Consumerism, which sits at the intersection of businesses and philanthropy.