Posted on Tuesday, 18th August 2009 by chris wignall
I’m always intrigued by innovative ideas about doing good in the world; particularly when they shed light on cultural assumptions that have little basis in fact. Dan Pallotta, writing at Free The Non Profits is doing just that this week.
He argues that (in the USA) current tax laws could and should be changed to allow people to make donations to for profit companies that are doing social good, or at least receive tax consideration for doing so. This would also allow current charities to expand their strategies by exploring new revenue streams and rewarding, instead of undermining, entrepreneurism.
Admittedly this is a huge longshot, but the concept is intriguing so before you shoot holes in it consider this:
-what are the assumptions behind giving churches, mosques, and other member driven organizations tax-exempt status?
-what kind of social change could be released by allowing the public to reward the best innovators with donations regardless of whether profit was generated?
-how many currently unsustainable charities would step up to this new reality and how many would be washed away?
-what new leaders would be willing to work for the common good if they could have a personal financial stake in the results?
-what untapped revenue streams would be revealed?
In a marketplace where more and more consumers are willing to spend a little more for a product that satisfies their conscience (see the Product RED campaign for example), it isn’t unreasonable to imagine that there should be a new middle ground. The lines between business and charity are blurring rapidly. Maybe it is time to reconsider how we structure both worlds for the benefit of those most in need and those most able to help.
Posted in Philanthropy | Comments (1)
August 28th, 2009 at 10:33 pm
Thanks for the thoughts, Chris.
One area that some US states are ahead of the curve is in the area of social enterprises. Often working toward the ‘triple bottom line’ (People, Planet, Profit), Social Enterprises can initiate the type of lasting change that many traditional non-profits seek (however incrementally).
Canada’s tax code makes it very challenging for social enterprises to work — whereas in some States and in the UK there is more government recognition (and tax code support) of the ’social good’ that these initiatives can bring to society.
In Canada one area where there is some room for non-profits to seek a monetary profit is in providing ‘real-life’ job training for folks who have been marginalized. Some of my favourite social enterprises include St. John’s Bakery (connected to an Orthodox church in Toronto) and Just Work (justwork.ca) connected to the Grandview Calvary Baptist in Vancouver.