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Entry:Business Through Philanthropy


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by Chris Lunch on February 16, 2008 - 17:33

Hi Harrie,
Ive enjoyed reading your entry & the comments; much of it has resonated strongly with the kinds of questions my organsiation is asking itself. It must be fate that brought me to your entry as i was browsing around... I kept seeing lots of parallels & conections as I read it, I see our participatory video entry is even mentioned in Ziba's comments and the word insight is in there a lot too - we are called Insight!! This is the kind of service I think we might be looking for. As you say one of the barriers is for social minded entrepreneurs to overcome fears about working in new ways and stepping into such a different "corporate world". It is new for us and whilst I can see many exciting opportunities I also see challenges where values/ethics may not be aligned etc.

Do have a look at our youth video entry, I know that what we are doing can hook in really well with corporate marketing initiatives, CSR etc..., it has all the right ingredients and is getting great responses from all sectors. We've got lots of cool ideas we are developing and I can see that such partnerships could really help get recipient voices out there as well as sustain the network of community media hubs on the ground longterm. But we also have a social responsability to the people we work with and high ethical standards... I can imagine this is not uncommon and Im wondering if it ever creates tensions between profit/non-profit partnerships and how this can be avoided? Have you had any such experiences before? Also I would love any more general thoughts and "insights" you may have re: our entry.
All the best
Chris
Insight Director

by hbakst on February 19, 2008 - 15:23

Hi Chris,

Your entry and organization are fabulous. In order to have CSR program or a profit/non-profit partnership, there needs to be a balance between business and morality. This "tension" you speak of is being exploited in the corporate world, and it is a great point -- something we all need to be aware of.

This past October, which is Breast Cancer Awareness month is the U.S, many products branded themselves pink in order to show their association with Breast Cancer awareness and social responsibility. However, some companies were only using it for their own advantage by not donating any profits to a Breast Caner organization -- they simply kept the profits and used socially conscious branding to increase sales (89% of consumer would buy a socially conscious brand over a non-socially conscious brand, price and quality constant). This was reported by the New York Times.

This balance and tension is something we have to be very precious with. Though we are thinking like the corporate world, we must remind ourselves and never forget the resposibility component. Sometimes companies create these intiatives for purely business reasons, and others do so because they truly care. It's a tricky balance, but an essential one.

As for insights on your organization, I see a lot of possibilities for our new initiaitive called iCSG (www.carnegiesportsgroup.com) -- a new philanthropic database. One feature of it will be creating profiles, and I see the video aspect as very attractive. Did you know that online video advertising is going to increase to $1.4 B in 2008? This can be an interesting way for causes to market themselves when it is filmed by themselves. Would love to speak further about this..

Best,

Harrie

by Drew Chafetz on January 22, 2008 - 01:56

Hi Harrie,

I am quite interested in what you seem to be nailing on the head. I run an organization called love.fútbol that develops simple, safe soccer fields for children in impoverished communities. Though we are currently a 501(c)(3), we do not identify with being a non-profit. We are a business with a social bottom line.

We believe that because of the simplicity of our mission, we have two main points of leverage for when we go to potential corporate partners (less so sponsors):
1. Our brand. There is no more direct way to give back to the game than provide the tool to play it.
2. Our growth potential. Our business model is intended for scalability and relatively simple replication worldwide.

I was wondering if you might be able to point me in the direction of some interesting for- and non-profit hybrid business models or other income-generating models that have appealed to you. Play Pumps International and their advertising model, for example, is one that we are interested in emulating. We believe we have potential in developing advertising, merchandising and co-branding, earned-income models.

Your idea and story are commendable and inspiring. Best of luck to you and CSG—

Drew Chafetz
www.lovefutbol.org

by hbakst on January 22, 2008 - 12:27

Hi Drew,

First off, I really admire what you have put together with your organization. Simplicity is a beautiful thing...

I would stay away from becoming a "hybrid". It can get very messy and complicated when you are part profit and part non-profit in terms of accounting and taxes. This has led other organizations into some trouble by trying to get certain transactions to become tax-exempt. Being a 501(c)3 creates a huge advantage for you - something for-profit's don't have! Remember, accounting is the big area that differentiates for-profits vs. non-profit's. As long as you are clearly defining and justifying your financials, all non-profits ARE operating businesses.

In terms of income-generating models, I think you can do a lot of cool things. Your program reminds me a lot of the late Bob Tisch's organization Take The Field (www.takethefield.org). They partnered with municipalities, which could be an interesting area for you. Also, "simplicity" is a big component of your brand. Right To Play created a genius campaign with this concept by partnering with Adidas to form the Red Ball Campaign. A red soccer ball, created by Adidas, became the universal symbol of RTP and their efforts - "When Children Play, The World Wins". Creating some sort of symbol or product that exudes "simplicity" could be a great branding strategy for you and even a source of revenue by creating retail opportunities.

Would love to talk further about this. Hope this helps...

Best,

Harrie

by Drew Chafetz on January 30, 2008 - 08:28

Harrie,

Thank you for your thorough response and my apologies for the delay in getting back to you.

I had the chance to check out Take the Field—they have certainly experienced some amazing public-private success and seem to have some major players on that team. Some developing countries recognize the fundamental role that sport plays in their citizens’ lives, so maybe we can leverage that fact to get local governments to match private donations. We happen to be partnered with the Department of Physical Education under the Ministry of Education in Guatemala, so I will follow up with them on your suggestion.

Furthermore, Right to Play is an organization we admire and the Red Ball campaign is the type of idea we plan to emulate. We have some ideas that we believe are innovative and are working with two Harvard Business School volunteer consulting teams to develop these income-generating future streams. A degree of independence from corporate partners is also crucial.

I am starting to learn that there is more flexibility from within the non-profit sector than I had earlier thought. I am reading a case study by two HBS professors called “Valuing the Cause Marketing Relationship” which discusses how to approach tying a non-profit’s mission into a for-profit’s business strategy. The point is, as a non-profit, if we are strategic, we have more power than ever before to create real value and benefit the bottom line for a corporate corporate partner. That gives us leverage at the negotiating tabel, which seems to be one of the biggest themes in Social Entrepreneurship.

Thank you again for your time and response. I would love to continue the conversation as well. I believe love.fútbol is different for a number of reasons, but simplicity is certainly the unifying theme!

My very best,
Drew

by hbakst on January 30, 2008 - 14:07

Anytime Drew -- and please keep me posted with everything....

Best,

Harrie

by Ziba on January 6, 2008 - 12:20

Harrie,
It just occurred to me that like the entry on participatory video, your proposal is one that many (most?) of the other entries here could benefit from your services. Have you thought of a more scaleable model of transferring your knowledge, instruction manuals, etc.? perhaps a lower entry level than the one-to-one consulting? Definitely want to connect with you sometime when I am in New York - I would love ot talk to you about the sport for social change networks that we are supporting in Brazil, Kenya, and South Africa.
Best of luck,
Ziba

by hbakst on January 7, 2008 - 09:42

Hi Ziba,

The more and more I think about it, I really would like to package CSG into a low-cost, accessible, and educational outlet. Perhaps creating a educational curriculum, or a manuel, or even a book where we can teach others and educate them instead of simply servicing. There are so many great avenues to explore, but I think the main focus is on teaching and educating others.

I would love to connect when you are in NYC -- perhaps we can even schedule a phone call to brainstorm some ideas as I would love to get your insights and hear all about the projects you are working on.

Best,

Harrie

by danafrasz on December 21, 2007 - 17:59

Hi Harrie,
Could you give some concrete examples of what you offer through Carnegie and the social impact that that has? What are your products and how do they relate to social change? What methods do you use to carry out your work?
Thanks
Dana Frasz
Changemakers

by hbakst on December 25, 2007 - 14:05

Hi Dana,

Our goal is to use the business of sports to help charities/causes achieve their respective goals. We create tailored corporate social responsibility programs, broker profit/non-profit partnerships, sponsorship/fundraising strategies, create branding & communications, ecommerce solutions, etc. The social impact is this -- when you buy a product, an ipod, a cell phone, a sandwich, etc., there is a value proposition. Whether it's a better brand, quality coverage, or better taste, the product/company offers something in return to the consumer -- it's why they buy that product over another one.

Let's look at this great competition. We have organizations throughout the world, with every single one highly successful. Yet, every organization in this competition is offering a solution to a respective problem, and is asking the public to volunteer, donate, help, etc. But, it's very hard to separate oneself from the clutter because there are many, many noble causes -- and it's not fair to say cancer research is more important than HIV AIDS research or childhood obesity deserves more attention than the Darfur situation.

This is where Carnegie can come in and create positive change. Through sports business strategies, we can create a value proposition for charities/causes -- whether it is incentive to donate because a donor is recieving marketing benefits in return or it is incentive to be aware because we created social networking and blogging platforms that allows a charity to communicate with a potential donor (something Nike has perfected with their NYC Marathon campaign). Creating this incentive and value proposition in the non-profit world is our answer to social change. Carnegie's services aren't reinventing the wheel -- we are simply adding a new beneficiary to the table.

Best,

Harrie

by Ziba on November 23, 2007 - 16:55

Hi Harrie,
Very inspiring - both your personal story and the work you are doing. I agree that the old model of the celebrity golf tournament is not the way forward, I often wonder whether we spend more on our cause efforts than the revenues generated. I am curious to know what size nonprofits you serve, i.e. small grassroots are primarily large organizations? The example you gave of Maccabi Tel Aviv vs. The Knicks is still a very high profile event, have you thought of or do you have examples of how this model might be adapted in countries where the economy is not as advanced and the sports stars are more local - do you think you could achieve the same outcomes from a revenue generation perspective (even if it is relevant to the local scale?) I am wondering if your service/ core competency is more the sports marketing knowledge and if you couldn't achieve even greater reach by packaging this into training for local organizations.
Great job! keep up the good work.
Ziba

by hbakst on November 23, 2007 - 18:03

Ziba, you bring up a fantastic point in that charities sometimes spend more on efforts then they should be, and the return isn't efficient. Currently at Carnegie, we serve, and will continue to serve, non-profit organzations of all size. We are only 5 months out, but we have non-profit clients that differ tremendously in budgets, and we realize that not every charity can produce a program much like the Knicks vs Maccabi Tel Aviv event. One example can be seen through one of our for-profit clients, who was economically a small business without the capital to have a marketing budget. We're creating a social responsibility program where they gave away a % of their revenue to a selected cause, and used the assets of the cause to market the promotion. So, in this case, a small entity was able to create a program that marketed their brand, and was tailored to their business operations. Most impotantly, we are getting funds to come directly out of revenue to be donated to a worthy cause, while we serve as the middle man and utilize their assets.

Just like time and space, business is relative. We can take this strategy anywhere. The key is creating tailored programs that fit within a respective market. So, if an entity doesn't have a high cash flow, we adapt and structure it a certain way(see above). If the economy is weak, then we adapt and try to achieve goals through other viable mediums in that respective market such as cell phones, the internet, educational outlets, etc. Relativity is a key element in this and it's very important not to take a cookie cutter approach.

by Kevin Carroll on November 23, 2007 - 15:47

Kevin Carroll
Changemakers Featured Commentator
Sport for a Better World Competition
Harrie, i echo Jasper's comments about your story & effort already being a success story!
Second, the idea of philanthropic efforts that are interwoven into a business plan & strategic vision is fantastic. Empowering a charity's fund raising efforts so that a charity does not always appear to be on the "begging end" of their work is a great idea. Approaching the fund raising effort via a business-like mindset is a sound direction. The idea of creating more strategic partnerships between a companies/organization's social responsibility (CSR) and the community's charitable endeavors will create a win-win for all involved. A strategic planning model on both sides and then execution could truly create real, tangible, and measureable outcomes. It seems like your complany has an opportunity to assist charitable initiatives to better identify potential business partners and then help create unique and meaningful experiences for both parties - the Knicks vs Maccabi Tel Aviv is a good example of how these experiences and partnerships can be formed. I would think that your service could be very valuable to the corporate sector and the charities by being a "phlanthropic liason" that assists in matching an organization's CSR plan with the appropriate charity. You become a clearinghouse and destination for both sides - assisitng in matching need with business goals.
How do you plan on becoming that bridge, destination and knowledge center of choice for businesses and charities to rely on for strategic philanthropic programming opportunities? Is there any other organization doing similar work so that you can benchmark their best paractices?

I really think you are onto a good idea, Harrie. Continued success...

by hbakst on November 23, 2007 - 17:44

Kevin, Thank you so much for your kind words and invaluable advice. Coming from you, I can't even begin to explain how much that means to me.

As for your questions, Carnegie does have a tremendous opportunity in this market, and if there is one thing that I have learned through my cancer experience, it is to find opportunity in everything. In order to become a destination and knowledge center within this respective market, we will use what I call "insight marketing". Coming in 2008, Carnegie will be launching a new initiative called "iCSG", and it will serve as an online database/resource for philanthropy, not just sports philanthropy. The early stages of it will list and give information on thousands upon thousands of charitable organizations (much like Charity Navigator), within respective categories such as education, HIV/Aids, sports, etc. This will allow consumers, whether they be corporations or individuals, to browse all the organizations that are out there within a respective cause. The strategy behind this is two-fold: 1) it will create an resourceful platform for potential philanthropists who are willing to give, but not sure whom to give it to, and 2) by demonstrating our insight and knowledge of this market without throwing our business in the faces of the consumer, we will create trust and reliability with our brand. Potential clients will not only come to our site for looking for insight but also select our service because we are a knowledgeable brand with a unique value proposition. With time, "iCSG" will evolve into other valuable online assets.

Currently, there are very few organizations with similar services. Charity Brands Marketing is one, but doesn't do much work in the sports industry. The Sports Philanthropy Project is another, but they tend to focus on just sports charities where we are servicing ALL charitable organizations while using sports business to benefit them. The Giving Back Fund is another, but they deal with individuals, not corporate entities.

by Jasper on November 14, 2007 - 06:12

This looks like a success story already - in business and private life alike. I can see how charity needs a more professional and innovative approach sometimes. Can you give a short example of a project you´ve tackled so far and how that was new and exciting ;)?

Jasper Nicolaisen
Free University Berlin
University Challenge

by hbakst on November 14, 2007 - 12:03

Hi Jasper,

How is everything?

Thanks so much for your note. One exciting project we worked on that can serve as an example was the New York Knicks vs Maccabi Tel Aviv game at Madison Square Garden this past October. The game benefited an Israeli charity, Migdal Ohr, and all ticket sales, and sponsorship revenue went to the charity. Our job was to sell sponsorship for the game and use it as a marketing as well as revenue platform for the charity. Through this basketball game, we were able to communicate the message of the charity, which didn't have high visibility beforehand, and bring in funds through innovative sponsorship/advertising sales at the game.

Other turnkey examples can include simple branding and communication strategies or even product promotions. A great strategy for that is to get a product to donate a percentage of sales, directly out of revenue, to a charity/cause and to use the assets of the respective charity to market the product, thus creating valuable marketing benefits for the product and getting something in return from their philanthropic efforts while the charity is receiving donations in return. By giving the product value, they can not only sell more unit's but also be willing to increase the percentage per unit donated.

Tell me more about your innovation.

Harrie

by rchilds on November 13, 2007 - 05:18

University of Southern California

This is a very innovative concept that is certainly needed within the non-profit sector. Many times organizations find themselves floundering under the pressures of strained resources because of their inability to implement fundamental business principles in their operations.

What exactly is the service that you are providing? Is it consultation services or marketing services?

Also, is there an opportunity to involve youth in this process, particularly youth from some of the organizations that need your services? For example, could you provide not only consultation, but also a training program where you incorporate youth as a part of the solution that you provide?

Again, good concept and best wishes for a successful business journey.

by hbakst on November 13, 2007 - 09:25

Thanks, and may I wish you the best of luck as well.

We are a consulting firm and act as an intermediary between a potential philanthropic entity and a respective beneficiary. Our job is to connect the dots. The marketing or sports business is our mechanism and medium that we employ.

Of course there are opportunities to involve youth. We customize and tailor everything around our clients whether that be youth programming or corporate partnerships. Whatever our clients want, our job is to utilize sports and the business of sports to achieve their respective goals.