Ninety percent of Sojourners' readers share a common story of pain. At a moment (or two) in time, you felt the call, inspiration, passion, whatever, to change your part of the world. You wanted to do more than dream about it. So you started (or joined) a group of people driven by the same sense of purpose and began the search for potential donors. Enthusiasm and sacrifice fueled the project in the start-up period. But then—the inevitability of it seems cruel—we all hit the same wall. And we wail: Where are we going to find the money to pay for this work? Maybe it's time to explore other models.
Working Assets, a San Francisco-based organization dedicated to political change, set out to create a radically distinct path for social activism. It runs a for-profit telephone business with $140 million annual revenue and directs a portion of its revenues to lobby for gun control, to derail policies that hurt the poor, and to promote peaceful alternatives to war, among other causes.
A multimillion-dollar budget for activism no doubt sounds compelling to any nonprofit director. But most social justice types don't like dealing with filthy lucre—although I guess it's okay to rattle the tin cup for it. So let's dive deeper into Working Assets' business operation.
"We measure our success not by the revenue of the company but whether we have a long and tangible list of political victories," says Michael Kieschnick, one of the founders and current president of Working Assets. The company needs to be profitable to exist, of course, but its donations are driven off its revenue. Furthermore, its political effectiveness depends not on its profits, but on the number of customers it can engage in its actions. So Kieschnick legitimately can claim that Working Assets is not a profit-driven firm.
FROM THE START the company's founding team was very conscious that the only way to maintain control was to minimize its reliance on outside capital. The more investment a firm takes in, the more claims that can be made on the firm's revenues. Kieschnick and his colleagues therefore honed in on networks where transactions take place yet do not require owning a factory or capital-intensive equipment.
They began with the idea to start a socially responsible mutual investment fund, and later branched out to offer credit card services. The credit card plan generated substantial controversy internally, however. Deriving income from members' savings in the mutual fund is not the same as encouraging people to go into debt, but some had their doubts. Kieschnick, on the other hand, felt the new direction was a stroke of brilliance. "Americans spend far more than they save; if you can attach yourself to that stream of money, that was a far better place to be."
Unable to reconcile philosophies, the mutual fund and the credit card company divorced and went their separate ways. Kieschnick and his partners soon started looking for other ways to expand the firm's income. "We once again looked for services that essentially everybody uses, where there are economies of scale, a gap between retail and wholesale that we could take advantage of, and where we could differentiate ourselves with our politics," Kieschnick explains. Working Assets jumped into the retail industry of reselling long-distance minutes.
At the time, every other long-distance provider billed through the local telephone company. Working Assets, on the other hand, saw the bill as its primary product. While informing their customers how many minutes they used the month previous, they also could pitch them citizen action alerts and encourage them to donate funds to causes by rounding up their payments. (If you owe $11.37, why not round it up to $12, and we'll use the few extra cents to fight for human rights?)
Working Assets ingeniously has set up a constant dialogue with its constituency. While most nonprofits put out quarterly newsletters and send out direct mail appeals, Working Assets has a monthly communication paid for by its phone revenues. The company also gives its constituency the right to vote on how to distribute donor funds to nonprofit groups that share its political agenda. (Working Assets has donated funds to support Sojourners' peace work, for example.)
Like my 5-year-old with a box of crayons, Working Assets colors the world outside the lines. It makes a mess of our common assumptions. The business entrepreneur cannot help but ask, what is profit for, anyway? And the social activist is inspired to think creatively about marrying its ends—how do we effectively change the world?—to its means.
David Batstone, executive editor of Sojourners, is author of Saving the Corporate Soul & (Who Knows?) Maybe Your Own (Jossey-Bass, 2003).