0:06 when I tell people that I've spent the
0:09 past decade working in nonprofits a
0:11 surprising number of them ask me for
0:13 advice on how they can start a
0:15 nonprofit I understand where they're
0:18 coming from they want to do good in the
0:21 world and they have this genuine belief
0:23 that the way to do that is in
0:25 nonprofits typically I give them the
0:29 same advice which is please just don't
0:31 we already have too many nonprofits and
0:33 anyway they simply aren't a good
0:36 solution to whatever the problem is that
0:38 the person is trying to
0:40 solve here's what I wish everyone
0:43 understood about the nonprofit sector
0:46 the business model is
0:49 broken I have helped raise millions of
0:51 dollars for Susan G Coman which is a
0:53 National Breast Cancer charity and I am
0:55 incredibly proud of the work we were
0:58 able to do with those funds especially
1:00 in supporting underserved women
1:02 but the truth is that the only reason
1:05 that Coman and a lot of other nonprofits
1:07 like it even exists is that the
1:09 government is failing to provide the
1:12 health care we should have as a human
1:15 right I left the world of donor funded
1:18 nonprofits because I came to believe
1:19 that it was a totally inadequate
1:23 solution to 21st century
1:26 problems let me give you some context
1:28 the nonprofit world as we know it is not
1:31 that old it was started in the 1960s in
1:33 response to the civil rights movement
1:38 and the 501c3 designation was created in
1:42 1969 today Believe It or Not There are
1:46 1.5 million 501
1:48 c3s what started out as a principled
1:51 response to a moment in history has had
1:55 some really unfortunate negative
1:57 consequences let's start with the fact
2:01 that fully 70% of those 1 .5 million 501
2:04 c3s have annual revenues of less than
2:06 $50,000 a
2:09 year with those tiny budgets their
2:13 impact is inevitably also tiny plus they
2:14 compete with one another for donor
2:17 dollars to solve essentially the same
2:20 problems in essentially the same
2:24 ways take Coman if you go to guar which
2:27 is a registration website for nonprofits
2:31 you will find nearly 7,000 breast cancer
2:33 Charities all of that competition for
2:36 donor dollars is pure inefficiency which
2:41 is paid for by those very same donor
2:44 dollars look at it another way imagine
2:47 those 1 million tiny nonprofits have
2:51 annual budgets of $25,000 a piece that's $25
2:53 $25
2:56 billion or put another way the annual
2:58 budget for the Environmental Protection
3:01 Agency now nobody is suggesting that we
3:03 should all donate our money to one
3:05 gigantic multi-headed Hy driven
3:07 nonprofit but it's pretty clear that if
3:10 there were fewer entities there'd be
3:14 less duplication less inefficiency and less
3:15 less
3:17 waste nonprofits are a significant
3:20 employer in the United States about 10%
3:22 of Americans work in the nonprofit
3:24 sector unfortunately those jobs are
3:28 problematic in a variety of ways start
3:31 with wages nonprofit salaries are lower
3:33 and sometimes a lot lower than the
3:36 salaries for those very same jobs in the
3:38 for-profit sector and one of the drivers
3:41 of that is that donors don't like to
3:44 fund what they call Overhead by which
3:49 they mean computers offices salaries all
3:53 the things you need to actually run an
3:55 organization that means that nonprofit
3:58 workers are underpaid underresourced overworked
4:00 overworked
4:03 and that leads to burnout and high
4:05 turnover another consequence of these
4:07 low wages is that the nonprofit
4:10 Workforce is typically women who look a
4:13 lot like I do and who have spouses or
4:16 families who support them financially so
4:18 they can even afford to take these
4:21 jobs as a result the voices of the
4:24 population that nonprofit is set up to
4:27 serve is often missing from the
4:30 conversation and that leads to
4:33 inappropriate poorly designed programs
4:35 which is more
4:37 waste and did you know that as a
4:40 nonprofit employee you're expected to
4:43 donate back to your employer or at the
4:45 very least fund raise on their behalf in
4:46 your spare
4:49 time imagine saying to a for-profit
4:50 employee that they need to give back
4:52 some of their wages just because the
4:54 company they work for is trying to make
4:57 the world a better
4:59 place so I imagine you're now with me
5:03 that working in nonprofits not so great
5:05 but what about their impact which is of
5:07 course the reason they even
5:09 exist unfortunately I don't have good
5:11 news there either despite all of the
5:13 money that has been poured into the
5:16 sector over the last six decades we have
5:17 depressingly little
5:21 progress look at climate change with all
5:23 the organizations working on this issue
5:25 we are all experiencing the inequitable
5:28 and increasing impact of global
5:31 warming or look at the gender pay Gap
5:33 despite the dozens of organizations
5:35 working on this issue in the United
5:38 States a woman earns 82 cents for every
5:40 dollar that a man earns and at the
5:41 current rate of change we will hit
5:45 gender wage parity in
5:49 2067 so nonprofits simply aren't the
5:52 solution what about government policy
5:54 listen I think regulations are a hugely
5:57 powerful tool and a lot of the problems
5:59 we see today would be solved with a
6:01 stroke of a
6:04 pen that said I don't know about you
6:05 personally I don't have a lot of
6:07 confidence that a lot of action is
6:09 happening in that sphere these days and
6:12 we simply do not have time to
6:14 waste so the answer has to come from
6:18 for-profits and that makes sense because
6:20 capitalism is the engine that is driving
6:23 a lot of the problems that we see today
6:25 we're not talking about the for-profit
6:27 world that flourished in the industrial
6:31 revolution the cycle of take make waste
6:33 that characterizes too many companies even
6:34 even
6:36 today we need for-profits that
6:38 understand that if we continue to
6:41 deplete our finite resources not only
6:44 will they be out of business we will all
6:45 be out of
6:47 business we need for profits that
6:50 evaluate their success based on what is
6:52 sometimes called the triple bottom line
6:55 which is people planet and
6:58 Profit the B Corp certification movement
7:00 is a step in this direction they
7:02 actually uh give certification for
7:05 companies that hit high standards for
7:07 environmental and social responsibility
7:09 accountability and
7:11 transparency and we do see increasing
7:13 number of shareholders that are trying
7:15 to hold big public companies accountable
7:18 for their impact on the world but there
7:20 is still so much more work that needs to be
7:22 be
7:24 done if we want a world where we can
7:27 both earn Fair wages and make the world
7:30 a better place we need a new paradigm
7:33 and that is where the small for profit
7:37 for good social Enterprise comes in
7:39 there's a magic in small businesses
7:42 they're Nimble they're creative they're
7:44 Innovative they are evaluated on their
7:46 ability to deliver value to customers
7:48 not like the small nonprofits on their
7:50 ability to attract
7:53 donations plus they can provide
7:56 incentives to attract and retain top
7:58 talent small businesses are a surprising
8:00 contributor to the American economy
8:02 almost half of Americans work in a small
8:05 business and that number is growing in
8:09 2023 there are a record 5.5 million new
8:11 small businesses
8:13 started imagine if all of those
8:15 entrepreneurs centered the well-being of
8:18 people and Planet when they were
8:19 building their businesses we would
8:21 really see some
8:24 change I invite you all to be part of
8:26 the solution here's what you can do
8:28 educate yourself about the social
8:30 Enterprises in your community and
8:33 patronize them when you can learn their
8:35 inspiring stories I promise they will
8:38 give you reasons for optimism and then
8:40 share those stories and that optimism
8:43 with others become an evangelist for social
8:45 social
8:47 Enterprise to get you started I want to
8:49 tell you about a company called
8:53 bopi they have created a product out of
8:56 the waste from banana crop that is an imitation
8:57 imitation
9:00 leather this product
9:05 looks feels even smells like leather and
9:07 it uses much less water and none of the
9:10 toxic chemicals that are in the
9:12 traditional leather tanning process plus
9:14 they use fibers that would otherwise go into
9:15 into
9:17 landfill they have created a true
9:19 for-profit for good business with a
9:22 product that people want to
9:25 buy so the next time somebody says to
9:26 you I'm thinking about starting a
9:28 nonprofit I hope you will encourage them
9:31 to instead think about a for-profit for
9:35 good business maybe you'll even join
9:37 them to help them and be part of the
9:40 change you want to see in the
9:42 world if we do this right eventually we
9:45 won't have to talk about social
9:46 entrepreneurship because all
9:48 entrepreneurs will Center the well-being
9:51 of people and Planet as a matter of
9:54 course really hope that happens soon
9:57 because our Collective future depends on
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