Ok so in case you didn’t hear the restaurant idea has been canned. It so happens that the city would require building modifications to the tune of $20,000 and since I don’t have a large inheritance from a far off uncle to spend frivolously I’m going to put that idea on the shelf for a while; and pick up another one.
I’ve been thinking abou this for a while and I’ll have a little free time next semester so I think I’m going to run with it. I’ve taken a few classes and read some books on economic development and poverty (See the article http://newsnet.byu.edu/story.cfm/64611 ). It turns out poverty is a very tough thing, there are no easy answers, and economic development is a young field of scholarship (really only since WWII), but it’s not like you can just give up. What I am interested in is charitable funding. The US donates about 2.2% of GDP per year to charity, a grand total of 295 Billion dollars (1). Just think if the US was committed to an idea like tithing; that would equal over 1.2 Trillion dollars per year, or about $166/yr for each of the 6 billion people on earth (not bad considering half of us live on less than $2 a day)2. So the question for me is how do you increase charitable giving in the US?
Individual donations account for 83% of the US charitable donations (Mega gifts like what Buffet and Gates give account for just more than 1%)3. The rest of the charity is divided among government, businesses, and corporations. What surprises me about this breakdown is that more than 50% of the world’s wealth is found in corporations (4). I’m still studying up on this so perhaps this conclusion is premature but it seems like businesses and corporations could and should give more. That’s what I want to address, so here’s the rough idea of what I have in mind:
- The problem with many charities is that they depend too much on one time donations, that just doesn’t cut it, what you really need is a cash flow. Therefore we design a system in which businesses volunteer a percentage of their net revenue or profit, maybe one, two, or five percent, whatever they decide.
- There needs to be some type of justification for businesses, otherwise this is only a tax which will be passed onto the consumer. The justification I’m thinking of depends on the implicit contract every business makes with any customer (you know, I give you money and you give me some kind of service or good). Why couldn’t you include in that contract the agreement that by keeping them in business they make the community better? It’s been done before (5), it’s called 'cause marketing,' and it has worked well the few times it’s been implemented. What we do is give the business stickers or something to put on their windows which say something like “Ask us about Business Giving Back,” and then a big fat number which is the percentage they give. Inside the business you have some type of pamphlet to give out which explains what exactly Business Giving Back is, and a small sheet of paper which lists the causes the business is supporting (now that’s good PR).
- Another problem is that money gets put in the wrong places. Does it really matter how much money we throw at poverty if people still stay poor and disadvantaged? Therefore you need a group of people who can evaluate the charities and only allow the business to put money in charities which are approved. Now here in Provo you have about 50,000 budding young college students a great number of whom are studying economics, finance, marketing, international development, etc… We need a group of people who are qualified to create criteria and evaluate charities; we also need a group of people to market this to the public and companies. If we get these people together throw up a website we’d be in business (of sorts)!
Ok so this is still premature, I’m going to consult with some old professors, and I still have a lot of research to do. But what do you think? Am I off my rocker? Will this work? Is there already someone else out there doing this? I would love to have any input I can get!
