← Nonprofit Nation with Julia Campbell
Nonprofit Nation with Julia Campbell
How Business Can Generate Profit for Good with Brad West
00:34:26
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- [00:00]
Julia Campbell
Did you miss this year's Nonprofit Social Media Summit? Well, the recordings and all the materials are now available. This summit is designed for the small and mid sized nonprofit and offers actionable and practical insights on how to best use social media to raise awareness and funds. Even during these turbulent times. You will walk away feeling empowered and supported with strategies you can implement right away. So learn more and get instant access to all of the recordings@nonprofitsocialmedia summit.com thank you and on to the show. Hello and welcome to Nonprofit Nation. I'm your host, Julia Campbell, and I'm going to sit down with nonprofit industry experts, fundraisers, marketers, and everyone in between to get real and discuss what it takes to build that movement that you've been dreaming of. I created the Nonprofit Nation podcast to share practical wisdom and strateg to help you confidently find your voice, definitively grow your audience, and effectively build your movement. If you're a nonprofit newbie or an experienced professional who's looking to get more visibility, reach more people, and create even more impact, then you're in the right place. Let's get started. Hi everyone. Welcome back to Nonprofit Nation. Your host, Julia Campbell is here today. We're really thrilled to discuss something that we haven't talked much about on the podcast is sort of an innovative approach to transforming consumer spending into impactful charitable contributions. And my guest today is Brad west, attorney, nonprofit leader and the visionary behind the Profit for Good initiative. And Brad's going to share his innovative approach to transforming the way businesses contribute to impactful causes without adding any extra cost to consumers or nonprofits. And I'm really excited. Brad is a TEDx speaker and he's a University of Chicago grad. And his mission is to create a world where our choices as consumers can save lives and better the planet. And I love that so much. So, Brad, welcome to Nonprofit Nation.
- [02:34]
Brad West
Thank you so much, Julia. So happy to be here.
- [02:37]
Julia Campbell
So what inspired you to create the Profit for Good model? I mean, we can talk about your journey into all of the different things that you're doing, but what really led you to create this model?
- [02:51]
Brad West
I'd say for the past probably five, six years, I've been interested in the power of effective giving. Basically, I listened to the Sam Harris podcast and he had Will McCaskill on the show and they talked about how, like with the Against Malaria foundation, for an average of $5,500, you could save a person's life. And just thinking about, you know, if my loved one or someone I cared about was, you know, that could Be the difference between saving them, how much we would give, and the power that we can have through giving through organizations. I was just inspired to try to see what I could do to support these organizations and then specifically profit for good. The idea, originally, I think I'd called it guided consumption. But I was at a meetup for these effective altruism people in Chicago, and I was passing out my business card. As an attorney, I get a portion of the fees from clients that I bring in, and I would offer to donate that portion to the charity that people care about. And then a light bulb went off in my head. People are spending money all the time at the grocery store everywhere. And who is that benefiting? That's benefiting some anonymous investors. But what if we had a choice to benefit anyone other than anonymous investors? Especially if the money from our purchases could go toward saving lives, saving the environment, ending factory farming? That would be something just about anyone could do, especially if they didn't have to make a sacrifice in terms of paying more for that or in terms of sacrificing product quality. And I was thinking, if we had charities or charitable foundations in the shareholder position, because that doesn't affect the operations of a business, there would be no reason that consumers would have to pay an extra price or otherwise sacrifice. For that matter, Employees that work for them could be paid competitive wages, and perhaps they could attract better talent. And perhaps stores or other economic actors, people could form partnerships with them and then be able to advertise, hey, we have a partnership with this organization that's helping end poverty, save the environment. Basically, the performance of businesses depends on economic actors like consumers, employees, and others. And if we can leverage the fact that people care, that people would rather save a kid from malaria than health some investors, bottom line, we can magnify our the philanthropic resources that we have and achieve a much more just happy world.
- [05:25]
Julia Campbell
And having lived in Senegal and served in the peace corps and fought malaria for about three years, I really appreciate that inspiration, that personal moment, you know, the sort of experience that sparked this idea and Profit for Good, this is a nonprofit that you created. So can you explain how it operates? And how do businesses make this impact without passing the cost to consumers?
- [05:54]
Brad West
Yeah. So the Profit for good initiative is a nonprofit itself with a mission of trying to advance the Profit for good model. Basically, we're trying to look for the opportunities that can lead to a world in which consumers can spend their money and instead of enriching investors, help better the planet. So how businesses could do this without passing on cost to customers is basically all businesses have shareholders, right? So a normal for profit business has a bunch of people in them. And this, we're just having the charities or the charitable foundation be in that shareholder position. So just how normal shareholders get money when a business performs better, the charity or charitable foundation would be advancing charities so it doesn't impact the operations of it. Another contrast would be, is if a business with normal shareholders made a commitment to donate money. If a business had normal shareholders, that would increase its costs, right? The amount of donation that it made would increase cost. So if it wanted to make the same return to its normal investors, they would have to perhaps increase cost or something. But by having charities in the shareholder position, the business is in no different position than any other business with normal shareholders. It's just those shareholders happen to be a charity that other economic actors, such as consumers care about.
- [07:18]
Julia Campbell
I think a lot of people are very familiar with purchasing from a business and having them donate to the cause so they can think, oh, we're supporting, we're supporting this charity or purchasing. I'm thinking of, you know, a lot of cause and awareness days, specifically, you know, maybe breast cancer, where you purchase a pink water bottle and 5% of the proceeds go towards breast cancer research, something like that. So how does this model differ from things like that? Like how do you pitch it to both the charity and the business as.
- [07:54]
Brad West
Far as pitching it to the business? A lot of businesses, you would not be able to potentially, if it was a small business in which the owner already had the equity position, you, you could potentially persuade them to donate their share to a charitable trust and then hire themselves as an employee, for instance. But with a lot of large businesses, businesses themselves wouldn't be the operative actor that you'd be looking at because they already have shareholders so they can't donate all of their profits. So ultimately you would need external actors. Or unless with a large business, like in the case of Patagonia, Yvonne Schoenard had the vast majority of the shareholder position already, so he could donate it to the Patagonia Purpose Trust. But in cases of other like large businesses, you would need an external actor probably to buy them out because with the different shareholders that were currently there, they would sue you if you just donated all of your profits. So I think that consumers would be the relevant people we'd be looking at to buy through existing profit for good businesses and philanthropists potentially to pioneer this model and basically look at early potential instances of it to show that, hey, if we give people the opportunity to buy In a way that helps people, then we can make a big difference.
- [09:13]
Julia Campbell
So this is different from like a B corp, like Toms or something like that.
- [09:20]
Brad West
The B corp concept would be broader. It would be pertaining to some kinds of business operations. Might be more environmentally friendly, or there might be some more ethical practice, but they may have normal shareholders. So you could have a B corp that says, hey, we produce this product in a more environmentally friendly way, but we still have normal shareholders with a profit for a good business. It's being defined as charities are, in the vast majority, 90 to 100% of the shareholder position. So a profit for good business could be an example of a B corp, but the B corp concept is broader and would encompass normal for profit businesses as well.
- [09:58]
Julia Campbell
So I'm thinking about my listeners. They are nonprofit marketers, nonprofit fundraisers. This is something that actually I did an entire segment on corporate relations and how to partner with corporate partners. What if it's a cause that might not be as palatable? Or what if it's something maybe seen as political? Because we know, first of all, everything seems political. And I know that you have a commitment to fostering justice and promoting social justice causes, but do you think that there is a market for. For a business that might be not something like supporting animals or supporting children, supporting literacy, that kind of thing?
- [10:41]
Brad West
Yeah, I think that a lot of businesses can succeed by appealing to a niche market. So if you could capture a large portion of a niche market, you could be incredibly popular. So I believe that could be a strategy our organization is more looking at, not because there aren't areas where justice might require something that is a bit divisive, because we think a broader tent approach might be more effective. We're interested in more unifying causes, stuff that is less fractious, not because it might not be.
- [11:17]
Julia Campbell
What is the unifying cause these days?
- [11:19]
Brad West
I would say ending global poverty, for instance. I don't think that anyone seriously objects to that. They might object to the method of going about it. You know, you could take conservative Republicans, Democrats, people across the board, and they would think it would be a better world if you didn't have people that were living on $2 a day and children dying of preventable diseases. That's one of the reasons that one of our causes. What I'll discuss in a bit of the commissions for a cause program is the life you can save's maximum impact fund. Because I think providing clean water, preventing preventable deaths from children from malaria is something that people across the board can agree with, but certainly you could have profit for good businesses that pursued justice in a way, or that the causes that they supported pursued justice in a way that was more controversial. You'd probably just be trying to market to a more niche audience.
- [12:12]
Julia Campbell
Yeah, I think in my days of fundraising, I am just incredibly cynical, unfortunately. But I believe I do agree with you that the overall vision is something people can unite behind, but the approach and the funding and the specific way the organization might go about it is something that people might just want to fund different models. So I can. I agree with that. So let's go to commissions for a cause. I think this is incredibly interesting. Tell us what it is, and how did you pick life insurance as a good fit for. For this model?
- [12:49]
Brad West
I suppose it would be life insurance sales, particularly. And I'd had some experience as a life insurance sales agent, and I saw that it could be quite lucrative. You could get a significant portion of the annualized premiums that someone pays for their policy as a commission. So you could get hundreds or thousands of dollars. And one of the things that I thought was potentially powerful about life insurance sales is there's legibly identical products. That is to say, an agent could provide you the menu of what's available for the different carriers at the same prices that any other agent would be able to provide you. But if they included, hey, I'm donating 40% of my commissions, as is the case with commissions for a cause that gives people the opportunity to buy the exact same products that they want to protect their family at the exact same price, but with the added benefit of getting hundreds or maybe thousands, depending upon the size of the policy that they're getting to a wonderful charitable cause. So I think that all kinds of people, if they had the opportunity to help and get what they already want without paying extra, I think that's something that people would do. That's why I pursue that model. Potential for high profitability, legibly identical products, and the opportunity for scale, too, potentially. You could recruit more people, and if they were able to get more commissions through this, you could make a lot of money.
- [14:21]
Julia Campbell
I just think this is fascinating. I think that the entire fundraising sector really needs to think more in a more innovative way, because we've constantly been doing the same things, some of which are working, some of which are not. But we need to be looking for new streams of revenue and new partnerships and new ways to sort of fund our programs. And I think this is something that you really have touched upon in this initiative. Do you sort of see the potential to expand commissions For a cause, like I know is this sort of a pilot model with life insurance, and then maybe you want to expand it into other industries. Like what types of businesses would be ideal for this approach?
- [15:11]
Brad West
So for commissions for a cause, I mean, if we're talking about commissions, we could expand it to something like real estate for more broadly, profit for good. I think that the sort of criteria that I'm looking at are businesses that you can compete with low capital expenditure businesses that are very profitable for the people who win in the sector. And I think that if you can offer legibly identical products, because I think that at least in this early stage, there might be a perception that nobody gets anything for free, right? So you're paying some hidden cost because there's a donation. But if you can offer legibly identical products or services, some examples of areas, as I said, might be other commission based services with online services. Like there's the business Humanitarix that came out of Australia and they offer ticketing platforms. So, you know, like with Live Nation or whatever, you can buy that, but 100% of the profits generated by that platform go to educational initiatives and other initiatives that help in the developing world. So if you're choosing an event platform for your tickets, you can go through them and you get an awesome platform and it helps people at no extra cost to you. They actually are the fastest growing ticketing platform in the world and they've expanded to the United States. And with their revenue miles, they would be valued at I think like between 3 and $500 million. And I think that, as you know, they can offer everything Ticketmaster can, and you're annoyed by the fees, but hey, you know that they're helping education in the developing world and other wonderful things. So I think that that's a demonstration of, of another model or an example of the profit for good model at work.
- [17:06]
Julia Campbell
I would be so happy if my $17 per ticket Ticketmaster fee went somewhere other than to Ticketmaster. To be totally honest. I think that would be brilliant and I think it would win them a lot of goodwill, good publicity, and maybe sell more tickets. I mean, I think it depends. You know, obviously Taylor Swift is going to sell out no matter what. But I think all of this is very interesting because you talk about, and I'm certainly not an expert, and that's why I bring people like you on my podcast. You talk about on your blog, you know, other aspects of ethical capitalism, like thrift for good, like organizations that sell used clothing which, you know, help save the environment. Can you talk More about how these forms of ethical capitalism, like some other forms, can. Can really help create a better world in. In the way that you see it.
- [18:02]
Brad West
I think that profit for good businesses often work well in those sorts of spaces because people that want to buy used products because it has a lower environmental impact would love it even more if they could have larger impact through the profits of the business. So I think that those kinds of sectors are often complimentary, provided that there is a demand for that ethical component to the business. So I think those are some promising areas.
- [18:31]
Julia Campbell
We're not talking about sort of small businesses. I mean, the first big business that came to mind that I was thinking of, I have two mom friends that run like a workout studio where I live. And I think it would be impossible for them to not reinvest profits back in their business. They certainly do a lot for the community and run fundraisers and donate a lot. But we're talking about larger businesses that have the capital and the ability to do this.
- [19:02]
Brad West
So I should clarify something. Reinvesting profits in the business is wholly consistent with a profit for good model. Just like if you're an investor in a business, you could get the profits in the form of dividends, or the company could reinvest the profits in research and development, marketing, et cetera, for expanding in the growth in the business. And if it's a prudent deployment of resource, then you should be indifferent between a dividend and the reinvestment, because that's going to result in an equal increase in your share value. So you could get the $100 in the dividend, or you could get $100 in the increase in the share value. So similarly, if it's owned by a charitable foundation, the charity wants the business to make the smart business decision. And if the smart business decision is the issuance of dividends, then that would be that. If a smart business decision is taking advantage of some expansion opportunity, then that would result in a larger asset for the charity. And then if there were immediate needs that the charity needed to be addressed, they could borrow against the increased asset value. So with Profit for Good, the bottom line is you want to make the right business decision. So reinvestment of the profits is wholly compatible with a profit for good model.
- [20:23]
Julia Campbell
Now, you're an attorney, right? I know you manage this nonprofit, but I want to ask you, on behalf of the nonprofit fundraisers out there, how can we approach a business like, how can we make what we do more attractive to create these kind of corporate partnerships?
- [20:44]
Brad West
I think you would want to Emphasize the fact that the business model itself and that there isn't a corresponding cost in terms of the quality of the products or services, nor the cost of the products or services. And then you would probably want to choose clauses that resonate and also indicate that the customer that they are making the impact. One of the things like, I think Patagonia would benefit from, they're now a profit for good business. So now every time you buy a Patagonia product, you're helping save the environment. Some free advice to Patagonia would be marketing, hey, buy from us, and you're helping save the environment. So emphasizing, hey, you, by choosing to buy through us, are helping this cause directly. I mean, what I've learned is you want to make it a part of the customer's journey and make them the hero of the story. And just emphasizing by choosing us instead of choosing our competitor, you're getting the same product or service that you want. Want, but you're helping save a kid's life. You're helping end factory farming. That's what I would emphasize. I would emphasize the cause and not make it about you, the business, not make it about the charity, necessarily make it about the customer and what they're doing to help better the world.
- [22:01]
Julia Campbell
That's interesting. How does Patagonia choose its nonprofit partners? Or how would a profit for good business choose its nonprofit partners?
- [22:11]
Brad West
So Patagonia, I forget if it was two years ago last year, they basically had divided the shares into two parts. There was the Patagonia Purpose Trust, which controlled the business operations, and then there was the Hold Fast Collective, which had the economic interest so they would get the profits that went into it. And I'm not that sure about how they decide the environmental charities that they go through, but I think some more marketing and knowledge of that would probably be. I mean, they're already an incredibly successful company. So I don't. So I don't know where I get off doing that, but I think that they can out.
- [22:52]
Julia Campbell
Everyone can learn something, everyone can improve. I agree this is completely off topic. Not off topic, but I didn't give you this question beforehand. Did you read the book the Generosity Crisis? I will send you the link. Anyway, the Generosity Crisis mentions things like when you buy a jacket from Patagonia and you feel like you're giving to an environmental cause, you are less likely to actually make a donation to a nonprofit. Is that something you're seeing or concerned about? I'm just very interested in, you know, like, if people buy a Tesla, they think, oh, I did all my great social justice work for the year. Although you know that we're supporting Elon Musk and that's a whole nother thing. But I think I worry about that and there's some data to support it. But I wonder what you're seeing.
- [23:46]
Brad West
Yeah, there, that definitely has been a concern of mine that there would be a substitution effect essentially that people would feel like, yeah, I'm doing my, my good deed or whatever by buying through a profit for a good business. And then they don't feel like they need to. There's a countervailing effect as well, which is that they adopt that as part of their identity, basically. Okay, I, part of my identity is buying through Patagonia and I help the environment. And actually that could result in a higher inclination to support environmental charities. So the research that I've seen has suggested that there isn't as much of this sort of substitution effect and there is more of this identity formation effect that would actually result in an increased donation because people who are buying from that and learn about it think of themselves as the kind of people that support this cause. So my understanding, again, I hope this isn't wishful thinking, but I did look into this some, is that the opposite would be the net effect of profit for good businesses.
- [24:50]
Julia Campbell
I love that. So Giving Tuesday found that foundation that if you give to one thing or you are inclined to give to something or be generous in one way, then you're going to be more inclined to be generous in other ways. So generosity begets generosity and it's the net effect. Like you said. I firmly, firmly believe in that. So thank you for saying that. So what is your sort of long term vision for profit for good and for commissions for a cause?
- [25:24]
Brad West
So I sort of see going to a profit for a good world or making a profit for a good world as like building a fire. Essentially you have some really big logs, you know, you have, you know, multi trillion dollar market cap companies, you know, with that. But the way I see it, you need to start with the kindling. Basically, that's what I'm seeing with small kinds of initial investments where there's legibly identical products, the most promising spaces that can serve as the leaves and the kindling. And once you get something initially started, once you get a fire started through evidence, basically philanthropists can see, hey, if people have the opportunity to buy the same stuff for the same price and help save a kid from malaria, help and factory farming, they'll do it. Once you get that evidence base and also once you get More public awareness. Those are sort of the early kind. That's the early flame that you get. And you can get to some larger, some sticks and you get to, can get to some logs. And then you can enable more philanthropists to feel justified in using very valuable philanthropic funds through profit for good businesses. And once the evidence base and once public awareness builds further, then you can get to the logs, then you can start doing debt based acquisitions, you can do leveraged buyouts with banks and other bonds, then you can start accessing the multi hundreds of billion, trillion dollar things through philanthropic funds and bonds and other stuff because you've demonstrated the proposition that this is a competitive advantage in the economy and you can use this. And I think that that's how we get toward a world where the 8 to 10 trillion dollars in profits or a significant portion of it is going toward making a more just world, is going to a world where there's no more poverty, is going to a world without factory farming where we have a sustainable environment for generations to come. So that's the vision I see for a world, a world where people can make. You can work for a business that helps save the world, you can buy from businesses that help save the world. But you've got to sort of go after those initial leaves and initial twigs. And that's what I think of the commissions for a cause program as being something, hey, it doesn't have a huge amount of initial capital costs. I've got to market it somewhat, let people know about it. But then I can, with the agent donating 40% of these commissions, these wonderful programs, if this succeeds dramatically, there's, you know, I can get some news events, I can, I can have evidence, I can say, hey, for this many marketing dollars we were able to get that. And then, you know, we move on to some twigs and then some logs. And I think the underlying proposition that if you didn't have to pay anything more, that you would rather help someone rather than help a random investor. I have very little doubt in their proposition that that's how people would rather do. They'd rather help someone if it didn't.
- [28:18]
Julia Campbell
I love it. Do you remember Amazon Smile? Is Amazon Smile still a thing?
- [28:23]
Brad West
No, no, no, it's, it's no longer operative.
- [28:26]
Julia Campbell
And it was terrible. I remember it was like $0.01 for every purchase. And when I was development director we would spend so much time marketing it. But clearly Amazon and Jeff Bezos, they're not a profit for good company. Yeah, that's very clear.
- [28:43]
Brad West
But it was pretty successful. It was so successful that they stopped doing it because it was costing them too much money to be doing that, so they decided to stop.
- [28:53]
Julia Campbell
I feel so bad for them, which is why I spend with Amazon all the time.
- [28:59]
Brad West
Yeah. Which is why having a profit for a good buy model is much more sustainable that way. Your business making money, making profit, and bettering the world are completely complimentary.
- [29:12]
Julia Campbell
Absolutely. So just to really kind of pivot a little bit, I know I have a lot of founders, I have a lot of executive directors listening. It's clear you're very passionate about this. So you manage this nonprofit movement while working full time. And I. I really know a lot of my listeners can sympathize and empathize with that. How do you stay motivated and organ? Like, what are your tips for other people in a similar situation?
- [29:38]
Brad West
I would definitely suggest people use AI as much as they can because it can both help you do things faster. And if you have limited time on a weekly basis to work on something, your time is very valuable. It can also lower the energy costs. Like, maybe you would be able to do something, but it would be more draining to you. Even, like, responding to an email and trying to write something that. That sounds good. If I can just say what I want and then tell ChatGPT it can write a professional one. And that just requires less energy, less time. So I would recommend using AI tools. Just because you're very limited in your time. I would definitely recommend staying in as much contact with people who really care about you and the mission that you're on. Because a lot of the time, it can feel very lonely and you're very tired, and just talking to people who can support you. Music really helps sometimes.
- [30:35]
Julia Campbell
What music do you like?
- [30:36]
Brad West
Well, two particular songs, like, if I need, like, to be lifted off if I'm kind of tired, but I have to do something. I like Don't Stop Me now by Queen.
- [30:46]
Julia Campbell
Oh, my gosh. Yes.
- [30:48]
Brad West
And I like Defying Gravity.
- [30:50]
Julia Campbell
Like, oh, my God, I love Defy. Are you. You're gonna go see Wicked in the theaters, I'm assuming?
- [30:56]
Brad West
Yeah, if I, you know. Yeah, I'll try to, but. Yeah, but just hearing and the message of that, just of defying the odds and just doing your thing and. Yeah, just, like, it really gets to me and, you know, if I just gives me the energy to keep going.
- [31:12]
Julia Campbell
Yeah. And it's funny. Defying gravity. It's not about her becoming evil. It's about her fighting for what she believes in.
- [31:19]
Brad West
Exactly.
- [31:20]
Julia Campbell
It's like freeing the animals of Oz. I mean, People get Elphaba very, they don't understand her. I love, I think that's, that's great. So pick some songs that can really center you. Pick some people that can center you. Stay connected and that's such great advice. Thank you. Thanks, Brad. Where can people find more about you and connect with you and find more about your Profit for Good initiative?
- [31:46]
Brad West
Our current website is www.profitforward4 with a number four good.org and our current project that we're focusing on is www.commissions. so that's C O M M I S S I O N S C a u s e.org commissionsclause.org and I can be found on LinkedIn where you can email me at Brad profitforgood and yeah, I'm happy if anyone is interested in learning more about the model, interested in volunteering for the org wants to start a profit for a good business. I meet some people who are saying, hey, I have this thing, I want it to benefit the world and I love the model. And yeah, so yeah, I'd love it if you got in touch. Another thing is if you look at our website, we have a list of different profit for goods. If there happens to be something that you're looking to buy from Profit for Good businesses do that and share the message would be another ask. You may not be in the market, for instance, for like life insurance, but someone in your network might be. And if they could buy the same thing for the same price and you know, help save someone's life, I think they would want to do that.
- [33:03]
Julia Campbell
Thank you so much for being here. This was fantastic. I know that I learned a lot. I love learning about a topic that I don't really know much about and they're, they're just so much such a wealth of information. So I really appreciate you being on the podcast, Brad.
- [33:20]
Brad West
Thank you. It's, it's been a, a pleasure and an honor.
- [33:30]
Julia Campbell
Well, hey there. I wanted to say thank you for tuning into my show and for listening all the way to the end. If you really enjoyed today, today's conversation, make sure to subscribe to the show in your favorite podcast app and you'll get new episodes downloaded as soon as they come out. I would love if you left me a rating or a review because this tells other people that my podcast is worth listening to and then me and my guests can reach even more earbuds and create even more impact. So that's pretty much it. I'll be back soon with a brand new episode, but until then you can find me on Instagram juliacampbell77 Keep changing.
- [34:09]
Brad West
The world you non profit unicorn.