The Buzz Bin

When I read Doug Meacham’s blog post, “Collaboration and the Power of Social Networks” last weekend, it became apparent to me that this business was practicing many aspects of the participation ethos. So I asked Doug to come over here and tell us about it…

Collaboration and the Power of Social Networks

by Doug Meacham

First, I want to thank Geoff for giving me the opportunity to speak from his platform. As you will soon learn, this post is part of a little experiment which I hope will yield some big results.

Every day, we hear about the power of social networks to?

• share new ideas
• connect people with common interests
• enable long-distance collaboration
• make a difference through calls to action

A few weeks ago, I told my readers about a small Information Technology consulting business called Impact Makers. Started by Richmond, VA social entrepreneur Michael Pirron, Impact Makers is “competitive social venture,” a for-profit business model with a nonprofit mission. The idea is simple -

Create a company that works to make profits, but instead of being based on maximizing shareholder value it’s based on maximizing community value.

There are generally two types of social enterprise in the US today:

1. A nonprofit that generates their own revenue stream by operating for-profit businesses to support their service delivery to the community. The problem with this model is that most nonprofits lack the capacity and the experience to run a competitive business venture.
2. A for-profit business that gives a small percentage of their profits to fund nonprofits (i.e. Ethos Water or Newman’s Own). The problem with this model is that the shareholders can, at any time, decide to stop the program or sell the company.

Impact Makers has introduced a new model where a partnership is formed between one nonprofit entity (Impact Makers’ Management and IT Consulting Services) focusing on generating income in the for-profit marketplace, and a nonprofit partner who is delivering services to the community. Those non-profit partners must meet four criteria: They must be secular, nonpolitical, local and have a philosophy of helping people help themselves. For its first charity, Impact Makers chose Safe Harbor, a Richmond, VA-based advocacy organization for victims of domestic violence.

Impact Makers not only donates its profits, but also provides consulting services to the partner, allowing it to focus with greater effectiveness and efficiency on its core competency – delivering community services.

To my knowledge, this is a new and unique business model. It is a non-stock corporation overseen by a volunteer board of directors. Its books are open to the public, its officers and consultants earn competitive salaries but no equity, and all profits are donated to the non-profit partners.

Steal This Business Model, Please!

While Pirron wants prove that the model works through Impact Makers, his larger objective is seeing the business model spread. He wants people to take the idea, refine it, apply it to other types of business and create community value in as many places as possible.

After writing about Impact Makers and connecting them with some of my readers who also participate in Social Entrepreneurship, Pirron asked if I would help with communicating the company’s business model and concepts through social media. In other words, get the “conversation” started and that’s the objective of this post.

I started participating in social networks in 2005 and through them, I have met and had conversations with more interesting people from around the world than I ever imagined. As LinkedIn demonstrates, the real power comes the fact that the people in your network also have networks. I may have 100 friends but if each of them has 100 friends, then I potentially have 10,000 friends and this enables ideas to spread very quickly. Given that potential, I decided to take my extended network for a test drive to see what kind of buzz it could generate for Pirron’s business model.

Join The Conversation!

I asked readers to suggest ways to communicate the concept or to communicate it to people in their networks that might find it interesting or even actionable. I threw out some starters:

• Share the idea with people in your networks. Have a conversation about it.
• Interview Michael Pirron for your blog or podcast
• Connect Michael with other prominent bloggers/podcasters who focus on innovative business models or social causes
• Suggest ways to effectively communicate Impact Makers’ message to non-profits and academia

The response after one week has been good. Opportunities like being able to share the story on The Buzz Bin are exactly what I was hoping for and I anticipate that some of you will want to get in on the experiment as well.

I’d love to hear your ideas. Better yet, I’d love for you to share the story within your networks. Either way, let me know. You can reach me by leaving a comment on my blog or sending an e-mail. To learn a little more, take a look at my previous posts (here & here) as well as the Impact Makers’ website for a quick overview of the company. Then join the conversation!