Do’s and Don’ts for Do Gooders

I remember the first time I was called the “S” word. I was on the phone with Ashoka and the voice on the other end of the line said “You’re a social entrepreneur!” I was unaware of social entrepreneurship at the time. So, I did some research, bought David Bornstein’s book “How to Change the World” and read a chapter each night before going to bed. It was an inspiring read. And, even though it makes me blush a bit, I think its fair to say that I do share some of the traits of a social entrepreneur. Yet, I do not look in a mirror and see one looking back. I do not use the title in my Linkedin profile. And, I do not use #socent for twitter. Not sure what I am waiting for. I take that back. I do know. I am waiting for a distinction to be made.

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Monetize. Monetize. Monetize. In every break-out room, session, and social gathering I heard this chant over and over again. In the pool, on the beach, and under a palm tree, I could not turn around without bumping into a social entrepreneur committed to ending poverty. Whether it was over $10 drinks or while choosing from one of the five different cheesecakes, the path to success was impressed upon me: monetize. Stop giving things away, charge a price, reach scale, pursue financial sustainability and pull people out of poverty as you make a profit.

Social entrepreneurs are a unique species. It was my first time being in their habitat. It was a nice one: ocean views, wide beaches and high walls to keep out the locals. There was archery, kayaking, and rock climbing. We arrived under cover of night in buses with tinted windows. Hot hand towels from the hotel staff awaited us upon arrival. I woke the next morning to walk the compound and observe them in their natural setting. It may have been mating season. I don’t know. But, their feathers were unfurled and on full display.

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I care about the environment. I also drive a truck that only gets 19 miles per gallon (on the highway). It all makes me feel conflicted. So, I greenwash my life. I only drive to work two days a week. And, when I am home, I ride my mountain bike around the streets of Richmond. Well, except when the temperature dips below 40 degrees Fahrenheit. On those occasions, I drive. There are few things more uncomfortable than cold air tightly channeled through a bike helmet impacting a head that lacks natural insulation. I use a reel lawnmower. I do not use power tools. I use hand clippers, a rake and a broom. I compost. I landscape with native shrubs and trees. Indeed, I have a native wildflower garden that runs the length of my backyard. I use a drip irrigation system. I do not use Round Up or any other chemicals in my yard. I use the plastic bags in which my sprouted bread from Trader Joe’s is packaged to pick up dog poop. Indeed, the National Wildlife Federation certified my backyard as a Wildlife Habitat!  Who cares if we had to pay $45 for the plague? And, instead of using paper cups, I always bring my insulated mug to buy my coffee from Starbucks. Well, almost always. There are times when I forget. But, if I ever do, I make sure to take off the cardboard sleeve before trashing it. I carry it all the way home to recycle it. So, taking all of this green-inspired activity together, I think it fair to say that my truck gets at least 30 miles per gallon, at least.

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If you ever want to derail a conversation about poverty and the poor, you only need to accuse someone of being paternalistic. Merrian-Webster defines paternalism as “the attitude or actions of a person, organization, ect., that protects people and gives them what they need but does not give them any responsibility or freedom of choice.” Not a very flattering definition. It seems that paternalism has an image problem. Is it deserved?

Le’s turn to Do-Goodernomics to find out.

In any market, before a transaction can be completed, two questions are asked. The seller asks “Will I get paid?” And, the buyer asks “Will I get what I paid for?” Both need to answer “Yes.” Getting to “Yes”  and “Yes” in any market can be a challenge. In the market for good, it is downright difficult.

As a do-gooder, with your goal of moving as many people out of poverty as possible with your $100, you are a buyer in this market. The poor mother of two who has promised to use your $100 to send her two kids to school is a seller. Earlier you negotiated the following terms of trade: 3 hugs, many smiles, 1 kiss on the cheek, and a promise to send her kids to school in exchange for your $100. However, before exchanging the envelope full of cash, you each ask your respective questions:

• You ask “Will I get what I paid for?”
• She asks “Will I get paid?”

Given that your $100 is transferred immediately, she can easily answer “Yes.” Her hugs, smiles and kisses may follow shortly after receiving your $100; however, when it comes to delivering on her promise to send her kids to school, there is a delay. It could be a day, week, month or year. It really does not matter. Any delay, can keep you from saying “Yes.” And, it should.

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Like every other market, the market for good has two sides. On one side you have do-gooders. And, on the other side you have those in need of some good. In an earlier post, we briefly outlined the three steps in creating a market for good. In this installment of Do-Goodernomics, we focus on step one: finding a poor person. Remember, you are a do-gooder. Your goal is to move as many people out of poverty as possible. You have $100. And, you must give it directly to one person.

How do you begin your search?

You can do what most people in search of other people do and publish a personal ad.

“Financially secure do-gooder in search of a poor person. If interested, please respond with your name, address and an answer to the following question: How would you use $100? Feel free to leave a brief comment.”

Let’s say you receive responses from around the world and create an excel sheet. Thinking that you may share your database with others, you substitute “Poor Person” for each respondent’s name and use a regional location for their address.

How do you begin to screen the respondents?

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You have $100. You want to move people out of poverty. What are your options?

You could put the $100 towards the purchase of a pair of Tom’s Shoes, a “Red” product, or some handicraft from Ten Thousand Villages. You could also buy brand-name products from manufacturers who have a reputation for using “sweat shops”. While not the most palatable way to move people out of poverty, they do provide employment opportunities for the poor. You could invest the $100 with MicroPlace or a hedge fund committed to Socially Responsible Investments. Or, you could give the $100 directly to someone in poverty.

Since we live in a world of scarcity, you have to make a choice. And, as you would expect, when you choose to do one thing you give up the opportunity to do one of the other two. Indeed, by choosing to dedicate your $100 to moving people out of poverty, you will not save the ta-tas, Sarah McLachlan will continue singing that horribly sad song, and your local kick-ass independent radio station will not get supported.

Consume it. Invest it. Give it away. Which one?

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The phone rang. Doug raised his finger to put our conversation on hold and reached over to pick up the receiver. I did my usual thing and got up to peruse his bookshelves. This time, however, he asked me to wait outside. Big things happened in and around his office. Ronal Coase strolled in for a visit on one occasion. Sitting with two Nobel Prize winners had me tongue-tied and immensely content. This time it was a head of state from Latin America on the phone. He was seeking advice on how to kick start economic prosperity.

I walked outside and waited with kid-like anticipation. On the other side of that door, Doug was telling a head-of-state how to end poverty. At the end of that call, I was going to ask him to tell me as well. It was like Christmas morning and I was waiting to be called to the tree. And, like Christmas morning, my imagination went wild with the possibilities.

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