Intro: Sustainable Development in the Digital Age
Page One: Profit Versus Values?
Page Two: The Value of a "Values-Based" Motive
Page Three: Two Models for Sustainable Development


The Value of a "Values-Based" Motive

Four of the many components of a values analysis are described in this section. Admittedly, this list is still a work in progress, as the Internet continues to spawn new paradigms for hybrid for-profit/not-for-profit social enterprises. I suspect the lack of clear parameters in this area is the main reason people fall back on ill-fitting traditional business models.



Values-based information, products and services developed by NGOs are both unique and compelling.


a) Branding and Credibility
Corporations spend millions of dollars to build brand recognition and consumer loyalty in order to generate profitability. By contrast, NGOs rely on their values-based mission to create similar branding and loyalty. One can represent part of an NGO's real financial value in terms of the amount of capital it does not have to spend building brand loyalty. NGOs do not use their funds to convince consumers of their credibility but instead engage in social missions that establish it. While commercial enterprises can and do limit socially responsible behavior to maximize profit, NGOs cannot compromise their socially responsible value motives, even at the expense of profit.

A corporation can retain its client base while not engaging in socially responsible activities. Few companies that have found themselves mired in controversy on grounds of neglecting their social responsibilities have ever permanently damaged their profitability. By contrast, NGOs that compromise their values lose credibility and constituents rather quickly. Because their credibility is inextricably tied to their work and not on advertising to convince people of it, once lost it is extremely difficult to regain.

b) Costs a Values-Based Enterprise Does Not Incur
The trusted network an NGO builds around its mission forms the basis of a vast reserve of unique, pro bono resources. Most NGOs have significantly loyal constituencies that attach themselves to the mission and devote countless volunteer hours of time and resources to it. They would not do the same for a profit-based enterprise without being compensated. That lost value drastically affects the bottom line of any organization engaged on a commercial basis to do socially responsible work.

I worked for a student exchange organization that counted 150,000 volunteers in upwards of 60 countries in its ranks. While its total real budget was approximately $30 million annually, that didn't come close to recognizing the contribution or financial value of these other resources. By contrast, for-profit exchanges that competed with us had to pay their teachers and families, and thus had a much smaller support network. Our organization regularly handled emergency cases from other institutions that could not provide the coverage or support of a volunteer force offering services at all hours of the day and night anywhere in the world. Had our organization gone for-profit, this constituency would have been lost to it. It would have had to compensate them in monetary terms rather than in satisfying a socially responsible need its volunteers felt.

c) Advertising and Sector Branding
If leveraged correctly on the Internet, not-for-profits have a significant opportunity in the area of advertising and sector branding that emulates corporate spending on marketing without incurring the same costs. For a commercial enterprise to brand itself properly on the Internet, it must advertise and engage in costly corporate partnerships in order to link strategically to other sites and drive eyeballs its way. NGOs, on the other and, with insignificant advertising budgets, do not advertise in the traditional sense and are much more likely to trade links or content. For example, Human Rights Watch (HRW) does not advertise, but it is a credible branded name with significant traffic and an easily found Web address: www.hrw.org. Any like-minded organization with a link on the HRW pages benefits from that branding because of the value system it carries with it. If HRW and Amnesty International link to each other as well as to relevant Internet search engines and list directories, they may each benefit from the other's traffic. Smaller organizations that have reciprocal links to them also benefit from this cross traffic. It's in the best interest of most NGOs to trade links. It increases their constituent base and is a cost-effective way to drive eyeballs to principles they share. On the Internet, you would not find two companies like Cisco and Lucent linking to each other to sell the other's competing products. However, HRW does link to Amnesty International to extend the missions of both organizations.

d) Information, Services and Products
Over the years, NGOs have produced information, services and products for their constituents that a combination of global economics and the Internet have now made more relevant and available to consumers outside their usual constituency base. These products and services are valued differently by both consumers and business than what their intrinsic cost implies, because it's understood they came about with a values-based mission in mind. People feel good about supporting them because it fulfills a desire in each of us to give something back and help others. If they can do that simply by making a purchase of an item that might benefit them materially and/or ethically, they will do so. Examples include donating food to feed a hungry child, buying environmentally sound products and purchasing items made by artisans in the developing world. Through these purchases, corporations, too, can engage in a socially responsible manner in what they do best: commerce.

Global commerce and the Internet continue to shrink the world. As this opens up new opportunities for enterprise, NGOs find themselves sitting on a wealth of unique information, studies and indices that might well have value to the commercial sector if repackaged correctly. And they can now easily be sold via the Internet to all corners of the world at a relatively low cost. Sophisticated commercial concerns in the developed world generally have a rather poor understanding of many areas of the developing world where they are trying to promote commerce. These tend to be precisely the areas that NGOs know best. The Open Society Institute (OSI), which funds Internet-related projects, has supported the creation of an NGO e-zine, Transitions Online, in and about Central and Eastern Europe that charges a small fee to developed world subscribers and institutions and allows regional readers to access it free of charge. This business model also allows corporate and foundation underwriters to purchase subscriptions to underwrite more free access to regional readership, which they do in return for an acknowledgment on the site. The information and stories provided by this magazine have proved so compelling that a major commercial news enterprise with a Web presence has begun negotiating for partnership links. This will result in a major boost to their readership and subscription service.

In addition to services, NGOs provide outreach to their communities that commercial entities might also benefit from. I know of a number of faith-based organizations acting as the primary provider of Internet and radio services in Central Asia and Southern Africa, in countries just opening up to outside commercial investment. OSI, in cooperation with a commercial online journal's providers, underwrote a program to provide heavily discounted online access to libraries in 40 countries in the developing world. This network of libraries not only provided local libraries and consumers access to resources they wanted but could not afford, it allowed the publisher unprecedented access into developing markets. Governments and commercial enterprises are now coming forward to underwrite this network because they see the potential in these consumers. Moreover, the consortium of libraries receiving this information has become a force in its own right and able to leverage hardware, software and other online offerings as a group instead of as individual institutions.

To summarize, values-based information, products and services developed by NGOs are both unique and compelling. Globalization of commerce and the Internet as a mechanism of distribution and commerce have also made them available to consumers (both corporate and individual) outside their usual constituencies. If repackaged properly, they can be sold and the revenue used to further promote their mission.


Next Page: Two Models for Sustainable Development


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