The Secret Nobody (Except Bono) Told You About Capitalism
By: Oksana Malysheva
Editor: Emma Merrill
Paul David Hewson the rockstar, philanthropist and frontman for U2 (better known as Bono) has a secret he’s not trying to keep. Capitalism is going to save the world.
This may seem impossible to some readers because there is a notion in America that charity must be purely altruistic or else it is evil. Not only this is not true, it seriously limits charitable growth.
Money isn’t inherently evil. It is an an enabler for change.
In the end, humans are insatiable for the bigger, better, and kinder. There are multiple ways to do this. I am by no means discouraging traditional donations and volunteer channels. I am just wondering, what if we apply the lessons learned in your work and venture life to make it exponentially more effective?
Firebomb Your Preconceptions
The striking thing about our nation is that we are some of the most charitable people in the world. It was astounding to me that people systematically donate their time, money, and efforts without any system forcing them to do so. It goes way beyond “help your neighbor” doctrine.
However, we tend to think that business and charity must be separate. We can spend half our day at a soup kitchen, but in the end, it is us that gain more from the exchange than the needy. Don’t get me wrong. There is nothing wrong with that. By all means, venture on with coworkers and your families to deepen your empathy. This is a good thing.
But to lift up impoverished and underserved communities, we have to do it on a scale only capitalism can tackle.
Consider Dan Pallotta’s argument in Charity Case: How the Non-Profit Community Can Stand Up for Itself and Really Change the World. Dan’s argument is that socio-economic problems are best solved through private industry. That means you’re off the hook for not buying a plane ticket to Niger to fight hunger. Here’s his reasoning as to why:
A Business Week survey concluded that the median Salary of a Stanford MBA graduate at 38 was $400,000. Compared to a Medical Charity CEO who makes $232,658 a year on average or a CEO of a Hunger Charity who makes $84,028 a year, it is cheaper for the average MBA graduate to donate $100,000 to a hunger charity every year then it is to work for one. The charity actually gains greater funding if the graduate stays in the private sector!
My point is, firebomb your preconceptions of what it means to be charitable. Your path to impact isn’t always dropping an extra $5 at a bake sale or those pins you gave to The Ronald McDonald house. Impact happens when creative, innovative solutions are posed to public problems. Those ideas, more often than not, come from the private sector.
Private Industry Saves The World
You think this is impossible? Talk to Bono. You heard me right, the Bono. Money talks and Bono sings. He founded Product Red along with Bobby Shriver. Compare the average yearly donations of Bono’s charity and another. Product Red produces $42 million on average each year. Compare that to amfAR (The Foundation for AIDS Research) another leading AIDS charity at $14.5 million on average per year. That’s $27.5 million more each year!
So how did Bono do it? What makes that red dot so much bigger? What Bono did differently was he got corporate sponsorship.
Product RED has teamed up with Apple, Bank of America, Beats by Dr. Dre, Coca Cola, Starbucks, Snapchat, and even Facebook just to name a few. Remember the red motorola Razr? When you use a RED certified product or service part of the money goes to fight AIDS. Hold on here. That’s morally wrong, isn’t it? Only part of my money went to the charity. These companies are making money off of a good cause!
Yes, they are. That’s a good thing. Here’s why:
Bono found a way for customers and businesses to turn everyday interactions into charitable enterprises. Everyday interactions are generating millions for charity. By what stretch of the imagination is that a bad thing? Let’s face it, that RED Starbucks mug was cool enough you would have bought it anyway. Now you have a product, Starbucks adds to its revenue, and a hospital in Niger gains funding.
What these companies are doing is innovative not evil. Sure, 100% of your proceeds aren’t going to Product RED’s charitable enterprises, but that RED Dell laptop isn’t some “give one get one” prize for doing good. If you really want to, you can make a direct donation to a charity, but with RED, you have a product in your hands that costs a for-profit company money to make.
Don’t Let Large Scales Discourage you
By all means if you’re a Stanford MBA and you want to volunteer your time and services to a hunger charity, do it! But Americans need to acknowledge that if you volunteer at a soup kitchen that makes a different impact than a large scale cash donation.
In the one-on-one contact you gain from personal service, you are awarded just as much as the person you’re serving, if not more.
This isn’t a bad thing. In fact, it is an important part of staying in touch with our human empathy. This capitalist donation model can somewhat remove the donor from the human experience. We are able to make change happen faster, but traditional charity is more personable. Neither one is necessarily better than the other, and each of us has something different to give.
Take for instance, doctors without borders. Doctors give their time (9-12 months of it according to their website) to go make the world a better place. This is of course a worthwhile effort, but the impact it makes is different. The social impact is personal rather than on a grand scale. It’s just as worthwhile and by all means pursue it.
But consider the possibilities if we don’t throw away capitalism’s potential based on a well-meaning but mislead sense of morality. Let’s use more if its immense power for good.