Is For-Profit the Future of Non-Profit?

Charity is for patsies. If you really care about making the world a better place, buy a trendy bag.

That was the logic Lauren Bush Lauren articulated in a 2013 interview about FEED, a for-profit entity she founded that creates simple, eco-friendly tote bags whose price covers the cost of donating school meals to children in Rwanda via the UN World Food Program. Her interviewer was Matthew Bishop, editor of The Economist and co-author of Philanthrocapitalism: How the Rich Can Save the World, perhaps the most prominent advocate for nonprofits to adopt business strategy and technique to fulfill their missions. When Bishop asked why FEED was conceived of as a profit-for-donation enterprise rather than a more traditional charity, Bush Lauren said:

If you wear it right, the FEED bag can both literally and figuratively pat you on the back.

Bush Lauren’s rejection of charity in favor of a commodity exchange echoes comments by her counterparts at PRODUCT (RED), a marketing partnership that brands products by Apple, Gap, Starbucks and others as (RED) and donates a portion of those profits to the Global Fund to combat HIV/AIDS, malaria, and tuberculosis in Africa. Among the most prominent “cause-related marketing” initiatives, its president, Tamsin Smith proclaimed, “(RED) is not a charity. It is simply a business model.” Bobby Shriver, one of the co-founders, told the New York Times,

According to Shriver and Bush Lauren, our convenience is the world’s benefit—and we shouldn't feel guilty about our materialism. Cause-branded marketing, in this argument, is far more effective at channeling money to fight disease and hunger than charity. People don’t donate as regularly and generously as they spend on shopping, and, with cause-branded marketing, the pitch sidesteps “begging” and “emotional appeal.” Instead, (RED) directs its energy towards stressing the ease with which consumers can engage. Shopping is woven into our everyday lives, so why not automate the process in a way that benefits consumers, corporations, and the world’s poorest and most ill?

This blunt pragmatism is hard to resist. In September 2011, a group of young idealists (and, counting myself, at least one journalist) gathered to strategize about how to create a better world and to examine the influence of corporations and the market on our society—but it wasn’t Occupy Wall Street. At the Next Gen: Charity conference, ten minutes away from Zucotti Park, keynote speaker and clothing mogul Mark Ecko proudly declared that “the future of non-profit is for-profit.”

The biggest names in Silicon Valley seem to agree, with Pierre Omidyar, Larry Page, Sergey Brin, and Larry Ellison backing Not For Sale, an anti-human trafficking and anti-slavery organization currently developing for-profit products such as soup, denim jeans, and a phone that would theoretically produce ongoing revenue for their advocacy efforts. It’s unclear if the name is intentionally ironic. On the smaller-dollar end of the spectrum, the founder of Kickstarter claims that the crowd-funding platform “creates a relationship between consumer and merchant that is more like that of the one between donor and nonprofit.”

Consumptive outlets for our philanthropic impulses are more pervasive than ever. Yet, when charitable giving gets folded into market activity, the very space that philanthropy is supposed to provide as an alternative way of dealing with money shrinks. Traditional motivations for philanthropy, such as concern for mankind, creation of social capital, and responsibility to give back are subsumed into consumerism.

Professors Angela Eikenberry and Patricia Mooney Nickel coined the term “marketized philanthropy” to describe the range of nominally philanthropic activities that donate money while reinforcing the superiority of business methods for addressing major social issues. Marketized philanthropy, according to Eikenberry, destroys “the transformative potential of philanthropy—its potential to represent the need for and bring about social change" in favor of “consumption of products…as the basis for benevolent human relations.”

Perhaps the erosion of those benevolent relations has left a vacuum for consumerism to fill. Refer to the social capital in Robert Putnam’s pivotal book the Bowling Alone, where Putnam found community relations to be in severe decline and isolation becoming more of a societal norm. Putnam, a Harvard sociologist, argued that most Americans—even those who live in safe neighborhoods—spent less time socializing with their neighbors and were less likely to join groups like churches, parent-teacher organizations, or the eponymous bowling leagues. Now more people pay a premium for gyms, barbershops, or private social clubs that recreate that support and camaraderie, a trend that leads Marian Berelowitz to predict “more businesses [will] find ways…to create real-life communities that mimic the organized groups of old.” (Interestingly, a 2010 follow-up Kennedy School report by Putnam and Thomas Sander found a resurgence of civic and social engagement only among the young, white affluent—the very consumers who have been given ample opportunities to "engage.")

Michael Edwards, a fellow at Demos and former Ford Foundation executive, described this movement with disturbing accuracy, in response to the philanthrocapitalist movement:

Consumption philanthropy corrupts the very behavior that should expand our capacity for empathy and turns it into the social equivalent of paying a sex worker for “the girlfriend experience.” Philanthropy should imply a categorically different relationship with money than the one we have a consumers: something we embark on because we want to participate in a larger goal of improving the world and linking our values, histories, and resources with the needs of other people. Instead, this sector is increasingly vulnerable to what Michael Sandel calls “the corrosive tendency of markets” to crowd out non-market values. “When we decide that certain goods may be bought and sold,” according to Sandel, “we decide…that it is appropriate to treat them as commodities, as instruments of profit and use.”

If we insist that this is the only way to effectively address massive social problems, we resign ourselves to a world dictated by consumer impulses. From our Warby Parker glasses all the way down to our TOMS shoes, we can cover ourselves head-to-toe with signifiers of empathy in lieu of actual connection to humans who need help. Philanthropy means “love of humanity.” Yet as philanthropy merges and then is overridden by consumer activity, it is our own humanity that gets lost in the process.