THE ARGUMENT FOR FOR-PROFIT CHARITY
by Eric Wichman
Let me explain something that at first seems counterintuitive and selfish and greedy, but the more you look at it and understand it, the more it makes sense. Even the phrase “for-profit charity” sounds like it’s fake, like it’s a scam or at the least, it sounds as if there’s some sinister ulterior motive. But it only sounds this way if you lack understanding of how money works.
Understand that everything has a cost. Whether the cost is time, labor, or money, there is a cost to any given thing in a monetary society.
Traditional nonprofit charities work, but not well enough to end poverty. They rely on donations and charity. Charities themselves rely on charity to exist. They’re dependent on the charity of others and this is their weakness. This is their fatal flaw and why charity has not ended poverty. Nonprofit charity has had hundreds of years to end poverty, yet poverty still exists. This is not to say that charity is bad. It’s actually good. But it can be better. I think it comes down to the business model and the effectiveness of that model to solve a problem. It’s limited to the number of charitable people that exist, and the number of charitable people that exist is limited further by those educated and compassionate enough to offer their charity. Charity needs charity to survive. And while charities have done great good over the years, they can only do so much good with their business model. The economics are limited. This is a numbers game.
Homelessness is growing, food is scarce (yet abundant; a paradox), healthcare and education is out of reach for most people, wages are low and the cost of living is high.
The economic model that creates great wealth can be used to end poverty IF one thing changes in that model. Instead of shareholders getting the profits, the profits are given to people in need and spent to build housing, grow food, install utilities, and provide healthcare and education.
People will automatically say “This will never work!”. But that’s fear and ignorance talking.
What this model requires is altruism and selflessness. It requires philanthropy. It requires giving and sharing. A trait that is not known in the for-profit economic world.
It seems foreign and scary and like it won’t work. Yet it’s really very simple.
The profits are simply given away. It’s written into the bylaws of the organization to give away the profits and use those profits to build the things that people need to get themselves out of poverty.
This seems like it won’t work because people don’t trust for-profit organizations. And people will say “But that’s what charities are for.” Yes, but charities have existed for hundreds of years and yet poverty still exists. Also, nonprofits are limited in what they can do because their business model limits them as do the laws which govern them.
For-profit orgs build wealth. That’s what they are designed to do. The problem with for-profit profit orgs is they don’t willingly SHARE that wealth. It’s a selfish system.
Even saying “profit share” is a bad word in the for-profit world. But forget that. Ignore the naysayers.
Here’s how it works.
People need 5 basic things to live in a civilized world.
Create a for-profit org that manufactures and provide these things to the world, sell them, and use 100% of the profits generated to build more for the impoverished.
No shareholders and executives paying themselves tens of thousand of dollars per hour and buying expensive yachts and private jets and giant mansions.
All profits get used to build the things that people need to get out of poverty.
If you have a good product and a good business model, the economics of this works because instead of the profit going into the pockets and bank accounts of the rich, the profits are used to build the things people need to end poverty.
Skeptics will argue (ignorantly) that it will never work. But they fail to understand the concept of sharing or giving away the profits.
Only ONE THING about this for-profit business model has changed. It’s where the profit goes.
Focus on these 5 areas:
Build these things:
Housing – Build homes
Food – Build Farms
Utilities – Install Utilities (create utility companies which provide utilities as a service to humanity)
And you can provide these things:
Healthcare – Build health clinics and hospitals
Education – Build schools and universities
And this will end poverty. Or at least do better than a nonprofit which depends on charity to do charity
Basically this is a charity versus sharing issue.
Sharing is better. Altruism is better.
“But…no one will share! This is a pipe dream! It won’t work! No one is going to share profit like that!”
I will! If I had a billion dollars I would build these things.
I know if I would there have got to be others that would too. There are others who understand this concept and understand that this is a numbers game and to end poverty costs money.
So why not use the system that build such great wealth to share that great wealth.
All it requires is for a selfless person to SHARE!
That’s it. It’s not that complicated.
People think it’s impossible because the problem seems insurmountable and unsolvable. They’ve never really given it a lot of thought about how humans can end poverty.
They think charity is the way to go. And while charity works, it doesn’t work as well or as efficiently as a wealth building system.
The temptation of greed is stronger than the will for charity.
If no one else has the willpower to share, then maybe I should do it just to prove it can be done.
At the very least maybe it’ll help some of those in need.
The saddest part is we have the ability to share the wealth, and we know deep down that this will end poverty, but our fear and ignorance and cynical skepticism stand in the way.
For this to work requires generosity and altruism. It requires charity and giving. It requires selflessness. It requires sharing. And humans aren’t very good at that. They like to think they are, but they’re not.
So, build a company and share! It’s pretty simple. Just do it.
You know it will work! You know it. Deep inside you, you know this will work IF someone takes the initiative and just does it.
People think the solution to poverty can’t be this simple, but it is. It just takes sharing. That’s it.
So use the wealth building power of a for-profit org and share!
How simple is that?