Nelson Caudillo, member of Vol-Start won Pthe 2014 Pitch with a Cause, tells CAUSE about his expereince. Apply for the 2015 Pitch with a Cause TODAY! http://www.cob.niu.edu/cse/pitchwacause.shtml
Last Friday afternoon, as my mind started to venture off and focus on my plans for the evening, I ran across an interesting article posted to my Twitter feed by the @FastCoExist handle. It was about beer, so given the point in the week, it was bound to grab my attention. The tweet read, "Why this Minnesota beer company is giving away all of its profits," and included a link to an article with the same title by Ariel Schwartz. Following is my summary of the fantastic read and three key takeaways I was left with after reading the article.
Author Ariel Schwartz describes the business model of Minnesota's fifth largest beer brand, Finnegans, which uses all of its profits to purchase produce from local farms and gardens and then donates that locally grown produce to local food banks and food kitchens, who in turn, feed the hungry. From a beer production and selling standpoint, Finnegans operates just like any other for profit, mid-size craft brewery does. On it's own, Finnegans is a for profit beer company, but the twist comes in when it comes to what it does with its profits. Every cent of profit that Finnegan's makes is donated directly to the Finnegans Community Fund, a nonprofit that uses Finnegans beer sales proceeds to make a double local impact by purchasing local produce and then donating that local produce to help feed those in need. In 2012, Finnegans made enough money for its Community Fund to purchase and donate a whopping 110,189 pounds of produce.
The article tells the story of Finnegan's founder, Jacquie Berglund, who left a job with the OECD (the Organization for Economic Co-Operation and Development) because she feels the "major impact is happening at the grassroots level." After moving back to her home state, Minnesota, Jacquie took a job as the director of marketing for her friend's chain of two pubs. She hatched the idea for Finnegan's after hearing anti-hunger advocate Billy Shore give a talk about the possibility of creating for profit businesses to fund nonprofit organizations.
The article illustrates that growing Finnegans into a sustainable venture hasn't been easy for Jacquie. She founded Finnegan's in 2000 and was the lone (unpaid) employee until 2009. As craft beer picked up in popularity in the last five years, Finnegans has seen 30% annual growth in its sales, and its impact on the local community has clearly grown at an impressive clip. Jacquie says that,"the thing that I'm most excited about is that the business is sustainable." She believes that it's key for any business pursing a model similar to Finnegan's to focus on creating a valuable product or service, saying "if I was trying to save the world and my beer was crap, it would never work."
My Three Takeaways
1. Crack a cold one, feed the hungry. How cool is that? I'll freely admit that I like to enjoy a beer or two from time to time. Drinking is frowned upon by some, but how can you argue with buying a beer that helps feed the hungry? Reading this article got me thinking: what if the proceeds of all activities that have somewhat of a bad rap (drinking, gambling, smoking, etc.) were used to fund nonprofits that better society? It's a really cool concept that has the potential to create great positive impacts. If I had the choice at my local convenience store to buy a six pack of regular beer or a beer whose proceeds fund nonprofit activities like Finnegans, I'd definitely buy the Finnegans beer. Heck, I'd even pay a little bit of a premium for the Finnegans, and anyone who knows me will tell you that's a big deal for me. I'm traditionally what one would "cheap." I like to think of myself as "frugal" but that's beside the point. I think there is a considerable market of people out there who are similar to me and would be interested in being customers of companies that are about more than making money. Anyone interested in this model should also check out the Oregon Public House, a bar in Portland, Oregon that donates all its profits to nonprofits as well.
2. Does this model have the ability to be successful at a large scale? While I love the Finnegans model, its definitely reasonable to question whether or not it has the potential to compete with public beer companies like Anheuser-Busch or MillerCoors. If Finnegans' ultimate goal is to create the largest possible impact in the hunger space, then it needs to scale and make as much money as possible. To do so would require it to retain greater portions of its earnings and/or secure capital investment to make the proper investments in attracting top talent, launching marketing campaigns, expanding its product lines, and the like. Organic growth through retaining greater portions of its earnings would be one route, though it'd be a long, arduous fight to the top, and Finnegans would have to sacrifice much of its short term social impact. Many promising companies gain the ability to grow rapidly and scale through securing big time rounds of capital investment. The problem for a company like Finnegans is that there's no real upside for high worth individuals and institutions to invest because they won't see a financial return on their investment. There is a small, growing pocket of high worth individuals who are investing in socially focused companies, but it's not huge. Ultimately, I think successful companies operating under a model similar to Finnegans are destined to hit a ceiling about where Finnegans finds itself- a small to mid-size company that can create significant local impacts, but not global impacts. On the big stage, I think capitalism will rule out, but I don't think that's such a bad thing. There is a place for companies like Finnegans, but capitalism has shown to lead to greater productivity and innovation, which also lead to great societal impacts. That's just my feeling though. I'd be interested to hear what other have to say.
3. Jacquie Berglund must be one tenacious woman. She left a lucrative gig overseas because she wanted to make a bigger impact personally, and then spent nine years growing Finnegans without paying herself for her efforts. The article sites that her hardest financial times building Finnegans also coincided with her divorce. I'm sure there were plenty of times when it would have been easy to throw in the towel, but she kept pushing. It's awesome to see that Finnegans is now creating the impact she envisioned 14 years ago. I have to think that the only thing that kept her going was her passion and conviction for what she's doing. It's pretty inspiring to read about the grind she's overcome to help other people. Shoutout to you, Jacquie Berglund. Thank you for making the world a better place.
This blog post is by CAUSE president Zach Fiegel. You can contact him at zfiegel9 at gmail!
In the second semester of my junior year (Spring 2013), I had the opportunity to compete in Northern Illinois University's second ever Social Venture Competition Course. 16 students from disciplines across campus were selected to form four teams for the competition. Each of the teams was tasked with creating a business model for a financially sustainable social venture, write a business plan for that social venture, and then present that business plan at the finals to panel of social entrepreneur judges.
My teammates and I developed a business plan for a social enterprise we called Vitalert - a mobile and web based platform that would allow users to submit reports about dangerous situations, aggregate that data, and then send alerts to users in identified risk zones. Our proposed launch market for Vitalert was Nigeria because of the incredible violence the country's citizens have been subject to in recent years. My team was fortunate, and we won $10,000 to donate to a charity of our choice (the donation was funded by Dennis and Stacey Barsema).
My team and I recently chose the Youth for Technology Foundation (YTF) as the recipient of the $10,000 donation. YTF works with disadvantaged youth in developing countries to provide technology training and help young people launch entrepreneurial endeavors in an effort to stimulate economies in developing countries. Following is an executive summary and three significant takeaways from an article I read recently written by YTF's founder and and Chief Executive, Njideka Harry, titled "Driven by Passion."
Njideka Harry opens by explaining that she started YTF in 2001 while working on the Corporate Strategy team for Microsoft because she "felt a constant thirst to give back and make a difference in the world, no matter how small." She ultimately decided to make technology the focus of her way to give back because she grew up in the developing world and saw first-hand how large the gap is in technological education and development between the developed world and the developing world. She goes on to explain that she decided that she wanted to work with young people, aged 10-24 (a target market 1.7 billion people strong, 86% of which live in developing countries), because they have the largest potential to use technology training to stimulate their local economies. It's a novel concept, considering that this age group is considered part of "the problem" by many in developing countries such as Nigeria (the country YTF launched in). She then expresses that social entrepreneurs, such as herself, are a unique, emerging group that's driven by passion for positive change, not financial gains. Finally, she expresses her appreciation for being named Social Entrepreneur of the Year by the Schwab Foundation, but deflects the credit for YTF's success in creating a positive impact to those who have been part of the YTF team for the last 12 years. Humbly, she also expresses gratitude towards the young people who have graduated from YTF's programs and leveraged what they've learned to make tangible differences in their local communities.
My Three Takeaways
1. Everyone can make a positive impact. Njideka Harry is an extreme example of someone who has dedicated her life to creating positive change in the lives of others, but all of us can play an active role in helping others. I feel that especially those of us who were fortunate enough to be born in the developed world, have a duty in some way or another to help other people in a way that we're passionate about. People born in the developed world are fortunate to have access to a large number of opportunity sets that people in the developing world just simply never have access to (there are also large opportunity gaps between different groups of people born in the developed world). You don't have to quit an extremely lucrative career at Microsoft to go out and launch your own social venture like Njideka Harry, but anyone reading this can volunteer their time or make small financial contributions to a cause that you are passionate about. I challenge you to just get started in whatever small way that you can. I think you'll be surprised at how rewarding of an experience you'll find helping others to be.
2. Technology will be a key economic driver for the developing world. I know I at least, take for granted how ingrained technology has become in my life. I can't imagine going a day without my Iphone, access to email, or access to the internet. So much of what I do is reliant on being technology literate and having access to technology, it's not even funny. It's crazy to think that so many people in the world not only go without access to the technology I'm reliant on, but also to quality education, health care, clean water, and electricity. YTF's work and the work of many other social enterprises clearly illustrate that technology can be used as a tool to address problems in the developing world at a large scale. A large part of the appeal of donating to YTF was the possibility that investing in technology education for young people could lead to long term breakthroughs that could be massive. It will be exciting to see how technology flips the script in the developing world in the years to come.
3. Njideka Harry is an awesome inspiration. She overcame tremendous odds to make her way to the US from the developing world and earn degrees from Amherst, Northwestern's Kellogg School of Management, and Stanford. I know quite a few people who would go to extreme measures to have the career that Njideka had at Microsoft. I don't know too many who would walk away solely because they wanted to make a difference in other people's lives. Just reading about her makes me want to be a better person. What she has done with YTF is incredible. Her program modelling is brilliant; to partake in YTF's programs, young people can pay a small fee, work on a community service project 3-5 hours per week, or be sponsored by a local business with an agreement that the program participant will intern with said local business upon completion of a given program. None of YTF's programming is "free." Participants have to demonstrate a commitment to the programming and really earn it. I think that's a really integral part of what YTF does, and its a brilliant way to go about creating real commitment from the young people it works with. In the one in a billion chance that Njideka ever reads this, I just want to say thank you for doing what you do and for being a true inspiration. The world be a much greater place if each of us tackled life with a fraction of the commitment to making a difference that you do.
This post was written by NIU CAUSE President Zach Fiegel. You can reach Zach at zfiegel9 at gmail!
Last week, I had the opportunity to attend Impact Engine's Community Demo Day to hear the pitches of the eight companies who just completed Impact Engine's 16 week accelerator program in Chicago. It was an eye opening experience to say the least. The morning after, I came across an an article that summarized the event on BuiltInChicago.org titled "Mission + profit = 8 of Chicago’s freshest startups" by Maura Gaughan. Following is a summary of the article and three takeaways I found significant.
The article opens by explaining that Impact Engine is a "16-week accelerator program designed to support “for-profit businesses addressing today’s societal and environmental challenges." Author Maura Gaughan then walks us through the event including opening remarks from Impact Engine's Managing Director, Chuck Tempelton, who gave an update about Impact Engine's first class of companies. Templeton noted that five of the eight companies from Impact Engine's first class have moved forward, creating 45 jobs and raising $3.4 million in capital since the program ended. After a brief panel discussion from the leaders of some of the companies that have moved forward from Impact Engine's first class, author Maura Gaughan walks readers through the pitches of the eight companies in Impact Engine's second class to the investor heavy audience. Following is a one to two sentence summary of each of the companies that presented:
- Civic Artworks created a platform that flips community improvement projects upside down by crowd sourcing ideas from community members to use tax dollars to make changes in their communities that they actually want.
- Meal Sharing created a mobile and web based platform to connect tourists and community members to schedule and share local meals. Think AirBnB for food.
- Jail Education Solutions is looking to provide educational opportunities for inmates through renting out tablets for $2.50 a day. The tablets are pre-loaded with learning resources and educational programming.
- Learnmetrics has created an application that aggregates data from all of the different resources that teachers and administrators have access to (like attendance, grades, and program participation). Teachers can then use this aggregated data to identify trends that will help them improve the student learning process.
- ShelfFlip uses patent-pending technology to allow users to upload a "shelf" of unused products they have around the house and find the top resale values for those items from professional buyers or from sites like Ebay with just a couple clicks of the mouse. Thus far, it has seen the most success in helping users re-sell electronics and textbooks.
- Smart Gardner has created an online vegetable garden platform to help users learn, grow, and accelerate their food production. It also connects local gardens to professional landscapers and the organic food service market.
- Zero Percent created a platform that connects food producers and sellers with non profits in an effort to redirect unused food from landfills to those who need it. The service helps producers and sellers turn food waste into tax breaks, and it helps nonprofits address our nation's massive hunger issues.
- Youtopia created a customizable gamification platform for educators. It seeks to provide educators with tools to engage students in an effort to address our country's major drop out issues.
My Three Takeaways
- "It only makes money. Why would you want to invest in that?" Chuck Templeton opened the evening by challenging the investor laden audience with that question. Impact Engine's two classes of companies clearly show that there are ways to create business models that create financial rewards while addressing our world's major societal and environmental issues. Don't get me wrong, making money is great, and it's a necessity for sustainable solutions. As our world's challenges mount though, new ventures that provide solutions and create positive impacts will be the future of business. Chuck's question points to an incredibly appealing ideology. Who doesn't want the work they do to make them money AND make a positive difference?
- Big money is being directed into the social enterprise space. Countless books, articles, blog posts, and video programming is dedicated to analyzing how successful business people have made their money and what they are doing with it. We view the wildly successful as "the smart folks," and many try to emulate them for good reason. The capital raised by Impact Engine's two classes of company tells me that the smart money is really starting to head into the space where impact meets financial returns. Impact Engine's first class had already raised $3.4 million, and they are all at a relatively raw stage of development. Impact Engine's second class seemed to be more established, and almost all of them referenced significant amounts of capital they'd raised prior to the completion of the accelerator program. Those who are looking to disrupt the status quo of business by introducing impact elements now have a real opportunity to grow because of growing venture capital interest in the space.
- We really need to start looking at challenges as major opportunities. That may sound really corny, but each of the companies described above have found a way to capitalize on ugly issues that most people don't want to touch. A growing number of social enterprises are capitalizing on major problems with innovative solutions. Jail Education Solutions is turning the jail re-entry rate problem ($74 billion is spent on correctional facilities in the US annually) into a profitable solution and is changing lives in the process. Zero Percent is turning our enormous food waste problem ($22 billion in consumable food is thrown out annually) into a profitable solution and is helping to solve our nation's hunger issues as well. Youtopia saw an opportunity in the fact that a US student drops out of school every 26 seconds. These are all clear examples of flipping the script and viewing challenges as opportunities. We have a lot of smart people in this country and on our planet. Imagine if more of us started to adopt the mindset of these social entrepreneurs. That will be our major challenge moving forward, and that's my challenge to who ever is reading this. We do a great job of identifying all the major problems in the world. Now, lets go out and create some innovative solutions that make us some money in the process.
This post was written by CAUSE President Zach Fiegel. You can contact me at zfiegel9 at gmail dot com