We raised the capital, created new jobs, designed a business that made sense, grew a healthy bottom line, and assisted people in the process. We are Social Capitalists
Social Capitalists have the strength to face problems that send others running. We know that the government can’t solve all our problems. We know that they can’t give our power away by becoming dependent on governments and large corporations for our well-being. We take charge of our own lives, and create our own solutions while creating a path for financial security, putting ourselves and others the fast track toward financial freedom.
If you were to take a leap of faith, to follow your heart, your passion, and your intuition, what could happen? What would the results of this be five years from now? And if you did nothing, what would those results be in five years?
“There are lots of 501(c)3’s out there that are currently operating off the kind of model that says, ‘I’m doing good in the world, but I’ve got to go to foundations and get money from them in order to keep doing what I’m doing,’” says Holthouse. “But that model is a dinosaur, and it isn’t going to last much longer. Every group that wants to address a social issue is going to have to operate like a real business. They’ll have to operate with budgets, revenues, and services that they provide. They’ll have to operate as any business would. The profits may not be distributed to shareholders, but would be reinvested back into the organization so that it can increase the number of people it serves or improve the quality by which it serves people.”
“I think social entrepreneurs share the trait that we don’t think we should need to starve to make a difference,” says R. Christine Hershey,
“One of the reasons we haven’t solved the world’s biggest problems is that folks in those sectors are underfunded.”
The triple-bottom-line philosophy comes up frequently in discussions of social entrepreneurship. The three prongs of this triple bottom line are typically referred to as “the 3 P’s”: People, Planet, and Profit. Social enterprises aspire to a bottom line that achieves social mission, benefits or does no harm to the planet, and still earns a profit.
For us, our triple bottom line morphed into “social value, profit, and freedom”
“I thought I’d put med school off for a couple of years, but obviously that’s become indefinite,” says Kreece, reflecting on the triple-bottom-line social enterprise which, in September 2003, became incorporated as Better World Books, Inc.
I think the biggest social enterprise in the world might be Google, because social organizations improve the world by their existence and are absolutely profit-maximizing.”
The government was not designed to financially support people. Governments were designed to create laws that protect entrepreneurs. Businesses are designed to provide jobs, goods, and services, which contribute to the GDP and provide value to humanity and the economy.
A major mistake people often make is by asking the wrong person for advice. We would not ask a three-time divorced individual for marriage advice, or an employee about becoming an entrepreneur. Choose your advisors carefully.
“Lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty,”
Starting a business takes a tremendous amount of time, energy and dedication. While having a newborn, working 12 hour shifts, plus working on the business times full time, throwing in the towel may have seemed like a easy way out. But to have the freedom we wanted and to be a part of the solution, I knew we had to keep going.
So if we’re going to give you any advice about becoming a Social Capitalist, here it is: Find your why, dedicate everything to it, and trust the process. In the end, your “why” is the most important thing you’ll have, and it will change your life forever.
Thought If your motivation to work is money, you are a slave to money. If you’re working to achieve a mission, you are free. Money is just a by-product of doing something you love and feel connected to.
For us, obviously, the fight against addiction is personal and dear to us. It wouldn’t make sense for us to open an animal rescue center or improve irrigation systems in third-world countries. Although very important, we are not driven to invest the countless amount of time, energy, and passion that would be required to launch those enterprises. Hearing about a problem, following your family’s passion, or being moved by it doesn’t mean it’s the best foundation upon which to build your own social enterprise. Our point here is that it must be personal for you, something tied to your heart, your memories, your passion, and your history. Fight your fight, not somebody else’s.
So addiction was both our nemesis and our driving force.
In a study about the mindset of children toward people with disabilities, Harvard psychologist Ellen Langer visited a school and presented children in several classrooms with a picture of someone in a wheelchair. She asked the children, “Can this person drive a car?” Overwhelmingly, as you can imagine, their answer was “no.” Then, she visited different classrooms, and in these, she changed the question to, “How can this person drive a car?” Well, as children typically do, they were able to provide Langer with a multitude of creative answers to that question.
We didn’t just want a different life, or desire wealth. We chose it. It’s an incredibly empowering idea. That one little distinction, that one-word difference portrays a canyon-sized chasm between wishing for something and making it happen. We chose this life; we made a declaration, took control, and commanded the universe to provide that for us. Choice became our way of life. And that word had a trickle-down effect in all aspects of our lives. We choose the words we use, the thoughts we have, and the actions we take.
We realized that once we chose to be rich, not only did it set us on a course of continual lifelong learning; it affected every other choice we made. From where we worked to how we spent our time, to the people we associated with, to our unwillingness to let failure of any sort stop us, we had made a choice and we weren’t going back on it. To us, putting our choice into action, making the tough decisions, doing the difficult things was what it meant to choose to be rich, in health, wealth, and happiness.
So here are our tips for identifying, and successfully fighting, your fight:
- Take at least ten minutes and write down what makes you upset. Then ask yourself, “Why?” If you ask that enough times, you will discover your core fight.
- Look at the words you use. Write a list of words you use repeatedly. We all have words that take over our vocabularies, our “go-to” words. They are called parasite words. Are you addicted to them? Ask yourself, “Are these words giving me energy or taking energy away?” Then choose words that give you power, words that heal and change how you think. You’ll be surprised at the benefits this will have on you and those around you
“What investors want is the equivalent of lighting a match in a room where a propane tank has been open for 20 minutes.” – Jon Carson, CEO and Chairman, BiddingforGood.com
The not-for-profit (or nonprofit) corporation is familiar to most. Upon obtaining a 501(c)(3) designation (named after the applicable IRS code section), certain tax benefits are granted. Contributions by supporters are tax-deductible. Any monies raised by the nonprofit are tax-exempt. So a 501(c)(3) charity that raises $10,000 from each of its ten donors won’t pay taxes on the $100,000 raised, and the ten donors will each get a tax deduction on that $10,000 contribution. A nonprofit that pursues a clearly defined charitable purpose and follows all the rules will be fine. But there are certain restrictions that limit the usefulness of nonprofit corporations. First, they can’t distribute their profits, which makes it impossible to attract investors. You will never hear someone say: “You can’t believe the dividends I’m raking in from Ronald McDonald House!” It simply doesn’t work that way. As a contributor to a 501(c)(3) nonprofit corporation, your dividends are spiritual (doing good) and practical (reducing your income tax bill), but they are not actual (cash back). Additionally, in spite of the United Way scandal pertaining to misuse of funds, nonprofits must limit the amounts they pay their employees. Thus, it’s much harder for nonprofits to bring in, benefit, and keep talented people. Social Capitalists seeking to solve big hairy problems will need the best and the brightest, and they are going to have to pay them. The need for world-class human capital makes nonprofits unsuited for the big challenge. Finally, the nonprofit rules limit activities that generate revenue. Sustainable and expanding operations that are the norm in the private sector are severely restricted by the federal tax laws in the nonprofit realm. So the need to attract investors, pay talented people, and grow a business, along with the need to benefit groups other than exclusively shareholders, led to the creation of the Benefit Corporation.
“One of the big things I learned is that there are really two kinds of learning. When most Americans think of education, they immediately jump to school—reading, writing, and math, the great equalizers. But when you do the research and see the studies, academic success has almost no correlation to life success. There’s some, but hardly any.