I completely agree, that using high-profit start-ups can generate extraordinary high donation potential. However, it must be assured, that money that is invested into these for-profit stat-ups isn’t coming from investors/institutions that would have invested into your newly founded NGOs instead. There is no guarantee that this new idea is developing into a more effective way in doing good than the start-up NGO.
Wouldn’t dragging money from effective NGOs to a for profit organization that might have REAL for profit and dominating shareholders something “net bad” with a high risk? Even if 4⁄10 of your for-profits are successful you might drag money from effective NGOs with all 10 of them.
How do you mitigate the risk, that the effects of the donations from the successful for-profit founders could smaller than
the money that was invested by investors that would have invested into effective NGOs instead
PLUS
The extra effort you have put into this program instead of
pushing, founding and helping effective NGOs
convincing for-profit investors to become EA investors
PLUS
the potential bad effects of the successful unicorn. It might not be NET-bad but it decreases the positive impact of the donations! I imagine that even if the business case is ethical and morally acceptable there might be downsides in a for profit organization that are not controllable: Profit orientation results into a management (and when being a unicorn the good minded founders will have a management influenced by highly capitalistic principles) that could decide FOR e.g
the cheaper electricity,
an org-chart avoiding the rise of a strong works council,
cheap import from inhuman production with long transport with a high Co2 impact,
for working service providers that HAVE a net-negative impact, ….
So: Did you do an extensive analysis of the opportunity costs? How do you mitigate these risks?
Wishing you all the best for founding a great number of unicorns!!
Hi AIM-Team,
I completely agree, that using high-profit start-ups can generate extraordinary high donation potential. However, it must be assured, that money that is invested into these for-profit stat-ups isn’t coming from investors/institutions that would have invested into your newly founded NGOs instead. There is no guarantee that this new idea is developing into a more effective way in doing good than the start-up NGO.
Wouldn’t dragging money from effective NGOs to a for profit organization that might have REAL for profit and dominating shareholders something “net bad” with a high risk? Even if 4⁄10 of your for-profits are successful you might drag money from effective NGOs with all 10 of them.
How do you mitigate the risk, that the effects of the donations from the successful for-profit founders could smaller than
the money that was invested by investors that would have invested into effective NGOs instead
PLUS
The extra effort you have put into this program instead of
pushing, founding and helping effective NGOs
convincing for-profit investors to become EA investors
PLUS
the potential bad effects of the successful unicorn. It might not be NET-bad but it decreases the positive impact of the donations! I imagine that even if the business case is ethical and morally acceptable there might be downsides in a for profit organization that are not controllable: Profit orientation results into a management (and when being a unicorn the good minded founders will have a management influenced by highly capitalistic principles) that could decide FOR e.g
the cheaper electricity,
an org-chart avoiding the rise of a strong works council,
cheap import from inhuman production with long transport with a high Co2 impact,
for working service providers that HAVE a net-negative impact, ….
So: Did you do an extensive analysis of the opportunity costs? How do you mitigate these risks?
Wishing you all the best for founding a great number of unicorns!!