The full text of the article:
"Recently, Ambassador Sada Cumber and I had an incredibly engaging and thought-provoking conversation. In the course of our discussion, we developed an intriguing fundraising approach.
First of all, if you don’t know it already, MiniDonations is not your “typical” non-profit. Its purposefully designed around making money and self-sufficiency with a heart for pure altruism. It’s a disservice to organizations like us – and there are several – to label them “non-profit” or “not-for-profit.” I’d much rather we rally around a different term: “Social Benefit Organization” (SBO). But that’s another conversation…
As you may know, equity is typically exchanged when a for-profit raises capital. That equity may later convert into dividends or be worth cash in IPO or M&A events. Of course, non-profits are forbidden from giving equity away.
One of our founding principles involved sharing a portion of our profits with members of the MiniDonations Social Network. For the sake of explanation, imagine a 50-50 split where 50% goes to MiniDonations’ Endowment and 50% distributed amongst our Social Networking Community.
To attract large, early-stage donors, we simply need to tweak our “profit sharing” strategy a bit and employ an Endowment/Donor Community/Change Agent (or “Seed” Donor) split of, say, 50/40/10.
Turning a $100,000 profit would mean $50,000 would go into our endowment, $40,000 into the MiniDonations Social Network (as thanks to our Donor Community) and $10,000 among our Change Agents (as thanks for their “seed stage” donations). In all cases, profits allocated to the Donor Community and Change Agents would be deposited into their respective MiniDonations Donor Accounts. By keeping community profit sharing within MiniDonations, we comply with IRS regulations and, more importantly, encourage continued use of our giving management tools and social networking environment.
“Change Agents” would equally share the total profits allocated to their level. For example:
|Donation Level||Amount||Profit Share|
|Founding Change Agent||$250,000||4%|
|Platinum Change Agent||$100,000||3%|
|Gold Change Agent||$50,000||2%|
|Bronze Change Agent||$25,000||1%|
I love this idea because it marries the profit sharing aspect of the for-profit world into ours. However, the ultimate beneficiaries are not investors but charities. Our success allows our donation community to give even more to their favorite causes: think “Pay it Forward.” This could not only get philanthropists, foundations and corporations excited when funding us but might also appeal an unlikely crew as well: VCs and Angel Investors."
That didn't sound bad until the response by the CEO to someone's comment was:
"ramileo 06. Feb, 2010 at 1:03 pm #