X% of your purchase goes to Y
Giving What We Can focuses on directing income to effective causes. Is there room for an organisation that instead focuses on directing consumption to effective causes?
Picture this: you’re in a store and there’s three products: one is a ordinary box of cereal, the second is a cereal box that says some proceeds will be donated to build a new shed for the boy scouts and the third says some proceeds will be donated to an effective cause, such as vitamin fortification.
Most consumers mix their hedons and utilons. It is possible that purchasing the third cereal will have a greater impact than if that consumer had donated the full purchase amount to an ordinary charity instead? The cereal actually acts as an advertisement for effective giving and will direct funding from consumers (who may or may not otherwise may not donate) to effective causes.
I am interested in information, views, co-founders, and collaborators interested in taking effectiveness oriented products to market. This operation could be self-sustained by profits or surplus revenue (depending on if profit or not for profit) in the longer term and contribute to the overall EA ecosystem. If there are good reasons not to pursue this project that we discover later, or through views shared in the comments, this will not proceed.
There is a proven, seemingly growing market for products that differentiate themselves on doing good. This may be part of the larger movement towards Environmental, social, and governance (ESG) and ethical consumption.
I’ll use some examples from Australia where I live. The Thank You brand, widely available in Australian supermarkets, seemingly relatively recently entered the crowded but obviously large household goods market, differentiating themselves solely with packaging clearly earmarking that sales would contribute to good causes.
Who Gives A Crap is a toilet paper brand, also widely available in Australian supermarkets, that has done the same.
If consumers are purchasing those products because of the relative impact of those decisions, compared with ordinary products, it is plausible they would defect to purchasing products with an even greater positive impact.
However, the aforementioned products don’t appear to face competition on impact. Yet.
A secondary pathway to impact of this initiative could be the shaping of the behaviour of brands that market themselves on impact to give to more effective charities to compete on impact. However, there may be a need for an impact oriented alternative to exert continued pressure in that direction. It’s possible those original brands may instead try to differentiate themselves in other ways, or adopt aggressive tactics against the EA movement as a whole. This seems less likely due to potential damage to their reputations as good doing organisations.
The central assumption this initiative would test is that consumers are more likely to defect to a product with greater impact. This information is likely to have significant value to the community even if unsuccessful.
From the aforementioned examples, like Thank You, which I think entered the market with a bottled water product focussed on the need for clean drinking water in resource poor settings, consumer hearts are open to thinking about nasty but important things like deworming when they’re buying say, their Gifting What We Can (or whatever we call it) branded soy milk (or whatever we take to market).
You should talk to @Brad West
What’s even more… With a business like Thankyou (or Newman’s Own, Patagonia) where a charitable foundation is in the shareholder position there isn’t really necessarily a reason that prices would be higher. Basically, all the businesses have shareholders, this business form just capitalizes on the identity of a potentially popular shareholder. The main disadvantage is that it is difficult to raise capital for these businesses, but I think this problem could be overcome if strong evidence can be established for a competitive advantage for Profit for Good businesses.
The below essay conveys more of my thoughts. If you are interested in trying to fund effective charities through the consumer economy, I’ve set up a nonprofit for that purpose and would definitely be interested in talking to you. My email: brad@consumerpoweriniative.org
https://forum.effectivealtruism.org/posts/WMiGwDoqEyswaE6hN/making-trillions-for-effective-charities-through-the
Thanks for commenting. I have just taken a look at your essay and associated entities as well as the unfairly condescending but informative comments it received.
It looks like our ideas are aligned. Some initial thoughts from me:
To make an scalable impact and safeguard or contribute favourably to the reputation of effective charities, I think our product offering should be at least as good as the current market. Drawing on success stories like Patagonia, and the rationale that consumers of premium products are more interested in brand differentiation—I think we should focus on offering premium products only, whatever the category of good.
From the sample I saw, the problem I see with CPI associated entities is they look frankly like white labelled low cost products sold online on less than slick websites—that likely will not be found unless people are really looking for them in order to donate—and those people likely already donate to effective charities—so contractually it might be marginally harmful but would be very skeptical about dollars moved to date.
I think there’s a point to be made that the comparative advantage of people in our movement is effective charity rather than effective business, so I see the case for CPI. Perhaps a good change in strategy for CPI is to focus on partnering with existing companies in need of differentiation, rather than spawning businesses from within the EA ecosystem?
That being said, our movement doesn’t necessarily lack the capacity for or to develop in house profit for good entrepreneurship—just as charity entrepreneurship capabilities have been built. However, from the lack of hands up to cofound in this comments section, it looks like further ‘field building’ is required to construct a coherent direction with this strategy. Otherwise, I expect my idea here will languish the way the other entities in your ecosystem appear to. Please do correct me if I’m mistaken—if funding has been forthcoming, committed volunteers coming forward or revenues healthy for instance
I like the idea.
Have you tried talking to those brands and see if they would be open to moving the donations to effective causes, instead of starting a new company from scratch?
Thanks for the vote of confidence. My third last paragraph on the secondary path to impact begins talking to this.
I think further investigation is required to inform whether to ask, or to pursue other tactics to shape the behaviour of the existing market.
It’s not one or the other—the existing market can be shaped as well as a competitor product introduced.
Some of the value of introducing a competitor over only shaping the behaviour of the existing market is:
that we exert continuous pressure on the current market to give effectively
we can be assured that donations will be directed to effective causes—we are not be beholden to the whims and changing pressures on those businesses
we are insulated from non-EA reputation risks and the reputations of effective charities are safeguarded by participants in the effective altruism movement more directly.
I think @Daniel_Wyrzykowski is working on something in this area
Pinging @Daniel_Wyrzykowski for comment