Consumer goods

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The busy holiday period is a good time to highlight one of the many charity based business models. The revenue model that is being used by these organizations is often not that complex. Many of them simply ask for a donation while others will give a commodity in return. A pencil, a plant, a newspaper and so on. But asking thousands of families for donations is labor intensive so when you’re trying to do something valuable, a B2B charity business model might be a better option. Freeset is such a company. They realize they are not in the product business, but in the reputation business. So when you’re selling the value ‘doing good’ the focus of your branding will not be the functionality of the product. Freeset sells Jute bags so they won’t last forever. But even this lack of quality is being used as positive feature. Using Jute makes Freeset bags biodegradable so that makes them (more) eco-friendly. Not only the product is focused on ‘doing good’. The business model of Freeset is build on top of a revenue model where the profits are being used to fight sex trafficking. Thereby the fair-trade business of Freeset is being perceived as People-friendly as well. So when clients are buying these event bags, they are ‘doing good’ and receive a platform (the bags) to show this to the world. Events itself are generally build to give companies opportunities to get exposure. And sadly it is exposure what you need when you are selling charity to businesses. Doing good, without anybody noticing, is economically not interesting.

Large companies that are trying to be eco-friendly, people-friendly and thereby claiming to do good are having a hard time online. When done right a profitable revenue model can be the result. Freeset is therefor a good example. But brands that are using charity or good causes as a marketing gimmick will be publicly crucified. See how even Apple is trying to coop with bad publicity on their green efforts. They make attractive products but being green is currently not their focus. Consumers have more power than ever. This forces companies like Apple to be more transparent on their efforts. But when you’re active in the ‘charity business’ you better do this over the top like Freeset. Eco-friendly, Fair-trade, People-friendly and so on. Do it and show it to your clients.

Other-industries

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Delivering clean water to rural zones is something you typically associate with non-profit organisations. But Manna Energy shows that a for-profit organisation can bring even more value for all the stakeholders involved. Instead of delivering subsidised pumps and water treatment systems, Manna Energy sees its mission as a clean water service. Therefore they need to incorporate the maintenance of these pump within their own business system. Compared to other organisations, they don’t rely solely on the goodwill of local technicians to maintain these installations. Manna Energy tries to make profit and thus they are able to give these technicians a small income as well. To cover all the costs, Manna Energy trades Carbon Emission Rights on the international market. In order to trade as many credits as possible they even power these installations with green wind energy. A total win-win situation!

This article on SocialEarth.org brings a good lesson for many non-profit organisations. Nobody will doubt that the intentions of these organisations are very honourably. But since we are living in a world where cash is king even they should find ways to monetize their business. Most of the non-profit organisations rely on a vulnerable gift based model so exploring new and sustainable income streams is highly recommended. Finding ‘green’ ways to do this is even better of course.

Banking & professional services

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Ello Mobile gives 100% of its profits to charity. A “profit for non-profit” business model. The Belgian mobile operator is purely web-based and aims to attract 1% of the Belgian market by 2014, thereby gathering minimum 6.2M euro per annum for charity. Projects are selected by an independant jury, and support initiatives in Sumatra’s rainforest and Mobile schools in South-America. Similar, the Dutch Call4Care donates 10% of your phone costs to charity.  TOMMY Telecom used to reward customers for sponsoring causes, but it is unclear if this is still the case after integrating with Nederland Mobiel. Ello Mobile and Call4Care’s “profit for non-profit” model offers people a convenient opportunity to support a good cause without any complexity or price premium attached to it; charity without a hassle or price tag.

Charity Upgrading – upgrading your product or service by systematic donation to charity – is applied outside the telecom sector as well, for example in gambling and waste handling. Bet2Give is a real-money prediction market where participants invest in predictions about the future, and give their winnings away to non-profit organizations of their choice. College Hunks Hauling Junk donates a portion of its revenue to College Bound, a non-profit scholarship program. Do you know other examples? Can you upgrade your product or service by supporting charity? Or can you link your good cause to a “no hassle” product or service offer?