If you were particularly market savvy in 1986 and had invested $1,000 in an upstart tech company called Microsoft, you’d be sitting on $500,000 today. If you were to take that same $1,000 in 1986 and invest it in a new initiative called Grameen Bank, you would have been eligible for a one-time tax exemption for a charitable donation.
This despite the fact that Grameen Bank has grown through the years loaning out upwards of US$6.55 billion in microcredit loans with a repayment rate of 98%. This money gets invested in communities, creates jobs and reduces poverty.
“Why can’t people get rich investing in their own communities?” asked Robert Egger at Net Change Week yesterday. Speaking as part of the My Charity Connects conference, Eggers is the Founder and President of the DC Central Kitchen, the nation’s first “community kitchen”, where unemployed men and women learn marketable culinary skills while donated food is converted into balanced meals.
Egger used the Microsoft vs. Grameen statistic as a parable of the little respect the non-profit community gets, even though it accounts for 10% of the US economy. “$300 billion dollars is donated annually to non-profits in the States,” he said. “This would be the seventh largest economy in the world.”
At least one traditional business person agrees with him. During the conference, our Social Innovation Director Allyson Hewitt sent the Microsoft vs. Grameen example out through Twitter. Her message was immediately re-tweeted by legendary investor Warren Buffett, joining the conversation from Omaha.
Egger is passionate about reimagining the not-for-profit sector. “We have to own the economics of what we produce,” he said. Despite the economic clout of the sector, 501c’s are still forbidden to donate to political parties or issue partisan statements. “The message is ‘shut-up and feed the poor’,” said Egger, “we’re not taken seriously.”
It’s time to change that. According to Egger, young people today refuse to buy into the corporate vs. non-profit dichotomy. He even quoted Tyler Durden from Fight Club: “I refuse to be my paycheck.” It’s time for charities to unite and use the power they have to effect real change.
Joseph was an education advisor at MaRS Discovery District. He writes on topics of science, culture and city issues for NOW Magazine, the Globe and Mail, Spacing and Yonge Street. He is the Executive Director of the Treehouse Group, dedicated to fostering innovation by hosting cross-disciplinary events. See more…