CForward: There Is No Profit without Nonprofits

This week marked the launch of CForward, a 501c4 — a Political Action Committee (PAC) — committed to better inclusion of nonprofits in political economic agendas. In spite of nonprofits vital role in the nonprofit sector in every community across the country — representing 10% of the overall U.S. economy and workforce — the economic contributions of the sector are an afterthought… A way to address cut social services programs.

In fact now, the nonprofit sector is endangered by our local, state, and national politicians clamoring for their jobs bills, economic stimulation, and government cutbacks. Part of the agenda includes cutting vital nonprofit services, the same services that create social sector jobs (usually low paying ones), invigorate a community’s health, and stimulate its economy.

CForward is not a cry for hand-outs. It is a demand to be listened to during the critical 2012 election year. It is an acknowledgment that politicians need to start partnering with the nonprofit community to strengthen the economy, not simply slashing and overtaxing it at every opportunity.

Robert Egger, the genius behind the job creating DC Central Kitchen (and its sister Campus and city kitchens across the country), started CForward. In his Huffington Post piece announcing CForward, Robert stated:

Through grants or government contracts [nonprofits], like Boeing or Lockheed Martin, bring significant outside investment into every community to create jobs, generate taxes and spur the economy through their and their employee’s daily commerce. Any candidate who cannot provide detailed plans for how they would channel that economic and entrepreneurial energy isn’t worth a vote.

What CForward does differently is it offers politicians money for their campaigns — in a non-partisan fashion — IF they will consider the nonprofit sector in their economic plans. It plays the Washington insider game by educating candidates about the economic contributions of the nonprofit sector, and supporting those that play ball. And right or wrong, that’s how DC’s K Street crowd works.

I have joined CForward’s board as the nonprofit sector has been an important part of my entire personal life as well as a critical part of my professional life. To demonstrate my commitment to this effort, I donated $1000 to CForward. I hope you’ll support CForward, too. You can also follow CForward on Twitter.

Marketing Causes Harder Than Products

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Homeless Image by Raileen Viorel

Marketers love telling nonprofits how to market their social solutions. They get miffed when they see a perceived slow road to change, an underfunded website written by someone in their 20s, and a general failure to resolve society’s ills. Of course, the answer must be the crappy marketing. Having worked with both types of organizations closely, it’s easy to definitively say social change marketing is much harder than marketing a product or service.

Quora Response

Look, whatever your experience is — Procter & Gamble, Old Spice, Cisco, start-up sold — great! Yes, selling domain names and marketing organic strawberries is hard. But the difference between marketing and activism will always revolve around this truth — People want stuff, but they don’t want to change. Getting people to want to change themselves is much, much harder.

Think about it. Do you want to change? Do you want to buy a more expensive electric car (kudos to Ford for announcing the world’s third major electric car at CES)? Yeah, most Americans get sustainability — it’s one of the most over-marketed words out there. But when push comes to shove, people don’t want to change, otherwise green legislation (forget electric cars) would be a top priority in the United States.

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How about cigarette smoking? In spite of every marketing trick in the book including severely negative product packaging deployed by the best minds in the business via the Ad Council, in spite of every piece of cancer causing knowledge out there, 20.6% of U.S. adults still smoke.

Beyond that core communications difference, causes are not businesses. They do different things than shilling burgers or IT services. Causes and people fight to affect social change. They have to make every donor dollar count. They don’t have the resources, staff or the wherewithal that a business does.

Quora Responses

There are too many causes because every entrepreneur who made a little scratch goes off and starts yet another Foundation or cause to do it “their way.” And for every fat well-known cause out there like Komen, there are dozens fighting an avalanche of apathy, scrapping to make ends meet.

Yet business people think they suck because they don’t market right. Maybe the marketers are that good, but there’s only one way to find out… By doing some actual field work. Please report back the research!

What do you think? Is it easier to communicate for causes or for-profit endeavors?

Thanks to Florian Engel, Jennifer Rosenberg, Stacey Monk, Kevin Vine, and Joe Waters for their answers on Quora.

The Zoetica Salon and the Business of Free

Kami Huyse (@kamichat) & Beth Kanter (@kanter)
Zoetica Co-Founders Kami Huyse and Beth Kanter

Zoetica launched its Salon today on Beth Kanter‘s personal fan page on Facebook. The Zoetica Salon meets a nonprofit marketplace need for basic peer-to-peer conversations about social media adoption. The primary differentiators of the Zoetica Salon is Beth Kanter and her significant experience in the space, and that it is completely free of charge, and hosted on a common easily accessible social network — Facebook — that doesn’t require a new log-in identity (see press release here).

This begs the question why market a free service? After assessing the current offerings out there, there was no free service. The best educational offerings range from affordable services like the esteemable Nedra Weinreich‘s Social Marketing University series to TechSoup’s NetSquared community and the Nonprofit Technology Network‘s excellent professional membership services.

At the same time, the partners in the company believe basic advice and simple questions should be available free of charge to an industry dedicated to resolving society’s ills. With no organization formally serving that need, a clear opportunity existed. As more social media consultants enter the space, it’s important to remember that advice from bloggers and consultants do not equate to formal training. The Zoetica offering seeks to channel people who want to do more than spend time in the Salon into the capable hands of folks like Nedra, NetSquared and the NTEN team.

Lest a Robin Hood halo be painted, there is an end goal for the company, which is branding and demonstrative leadership. Simply put, by giving people a taste of the offering, the company builds a reputation for its consulting services, and gains new business opportunities. A vast majority of Zoetica’s business is through referral or direct client requests.

What Free Costs

There’s a real cost to free, which most people don’t take into account when they launch their services or blog. That’s the time it takes to build a quality reputation via free services. By assuming that giving away free time will monetize, Zoetica shoulders great risk. For example, in addition to the Salon announcement today, the company also announced the addition of Julie Pippert to the team (Welcome, Julie!). Deploying Julie’s unbillable time to the page is a significant investment.

It is a risk that all of the partners have successfully shouldered individually, so the leap is taken with faith. Perhaps the poster child of free intellectual property Cory Doctorow said it best:

“For me, the answer is simple: if I give away my ebooks under a Creative Commons liscence that allows non-commercial sharing, I’ll attract readers who buy hard copies. It’s worked for me – I’ve had books on the New York Times (NYSE: NYT) bestseller list for the past two years.”

Other online organizations have sought different methods of monetization, including advertising, sponsor programs, affiliate marketing, membership fees and subscription models. Every entity has to choose the model it thinks will serve its community of interest best, and ultimately serve its long-term business goals. And so with that, let the free experiment known as the Zoetica Salon begin.

A complete discussion on the economics of Free can be found in Chris Anderson’s book Free (which was available online for five weeks free of charge).

Social Cause Innovation Needed… And Inevitable

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Since when did Americans discourage starting new enterprises (image by hoyasmeg)? But sure enough, I found myself reading a great conversation sparked by Kristin Ivie’s Social Citizens post encouraging nonprofit entrepreneurs to pursue different paths and work — even merge — with existing charities. At the heart of the issue is an overcrowded cause marketplace with many already existing charities PLUS the fact that many entrepreneurs don’t effectively administer Change programs.

Yet, if we shut down entrepreneurial approaches we would be denied Steve Case’s American Giving Challenge, Lance Armstrong’s Foundation, and Scott Harrison’s Charity Water. Who wants to deny the effectiveness of these efforts?

An Overcrowded Marketplace

Let’s parse the issue into two parts. First the overcrowded marketplace needs to be addressed. Overcrowded markets are always ripe for fresh approaches, for or non profit. Bigger organizations lose the fresh innovative approaches to their mission that made them exciting and new. As they become staid in their ways, bureaucracy takes hold. In actuality, small organizations drive innovation.

I have many friends in large nonprofits who complain about processes and the inability to actually do effective work. While big nonprofits can achieve things smaller ones cannot, they often fail to move quickly enough and meet major market shifts.. like social media. That’s why the suggestion to channel and consolidate charitable efforts into larger nonprofits struck me as a disaster in waiting.

If we become placated with the status quo, innovation becomes stymied. In the cancer market, we would only have the American Cancer Society’s point of view. Instead we have an exciting LiveStrong and Alex’s Lemonade Stand fighting children’s cancer in new innovative ways.

In the for profit market, we saw the same thing with telecom. The government had to break up AT&T’s monopoly in the 80s to foster innovation. That occurred with the rise of MCI and Sprint, and then wireless networks. Now wireless is surpassing landline telecom as the primary method of access.

Innovative approaches force all markets to change and adapt, becoming stronger and more effective. Just because we are talking about causes does not mean we should abandon innovative new organizations! On the contrary, we should encourage them. They make for better results, and forces larger charities to stay nimble. Consider what 350 is doing right now for climate change!

Still, Kristen’s point that a lot of entrepreneurs start nonprofits that fail or are inept is accurate. And that means dollars are going to waste. How do we prevent the crazy entrepreneur from going off the rails with an ineffective effort?

Encouraging Smart Innovation

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As an entrepreneur, I can tell you one thing (image: The Green+WIRED smart home is built on innovative new approaches to energy conservation). You can’t stop us from starting. It’s an inevitable part of our chemistry; it’s in the blood. I just wrapped up my first start-up as an owner, but keep in mind it was my fifth start-up experience!

Entrepreneurs look at things, see how they can be improved, tear down models, and rebuild them. So when we’ve experienced enormous successes in the for-profit world and then turn our eyes to higher causes, it’s only natural to think the same approach will work.

Granted there is ego at play, but are you going to tell someone who successfully sold a business or took a company public, that they can’t win again in a different sector? Good luck with that one!

The failure for entrepreneurs is in mission. For profit enterprises are not social causes. Changing society is different than selling product!

Discouraging new approaches and organizations is not the right way to handle this. Because in reality telling the entrepreneur not to start will only goad us into doing it even faster. Sorry, folks, it’s the nature of the beast. Further, the innovation, the new approaches that entrepreneurs can bring to bear in the industry should be harnessed!

Instead, embrace innovation, but know the problem. The problem lies in education, and as an industry we need to focus on educating new entrants on how to successful administer social change. In that sense, Kristin’s colleague Eric Johnson had it right. Let’s coach the new cause entrant and make for an even stronger industry. Organizations like Ashoka are already starting this process of social entrepreneurship.

Smart innovation through education means a much more robust cause market. We all want a better world. Whether we choose to align ourselves with a larger enterprise or start anew, let’s keep the end goal in mind and give everyone the latitude and encouragement they need to succeed.