Don’t Just DONATE to what you believe in. INVEST in it.

With rising costs for charitable work and a decline in giving during difficult economic times, every dollar you dedicate to doing good needs to produce the greatest SSROI (Social/Spiritual Return on Investment).  Evaluating the work and efficiency of any nonprofit endeavor is important to knowing your effort makes the greatest difference.

Every donation, whether a one time or regular gift, is gone once spent in promoting your mission.  This creates the need for continual fundraising efforts to maintain ongoing work.   New donors are needed as inflation, growth in outreach and attrition of donors demand more dollars.  The perpetual work of fundraising keeps donors involved and informed, but also uses valuable staff and volunteer time to keep programs moving forward.

Some investments in your organization’s work can provide repeated returns for a single effort. This is the purpose of contributing to an endowment fund.  With low interest rates and a need for cash flow to maintain the mission, endowment funds require a large balance and produce a small return.  Investments in an endowment fund cannot be spent and are always at risk.

The nature of a social business enterprise is to create ongoing income and growth in financial resources over time.  Just as any profitable business increases in value and provides income for owners, employees and shareholders, a cause based social enterprise can grow and provide ongoing income when successful.  This residual income reduces the need for repeated fundraising events and campaigns.

When considering a social business enterprise to produce residual support for your organization, the social and spiritual return on investment must be evaluated in light of the original investment of time and money.  Running a typical business requires managing products, people or property, providing services, keeping records and customer service or startup costs.  A large investment is generally counter productive regardless of income generated for your cause since the time, money and risk associated with it distracts from the focus on your mission.

Every organization, however, has one valuable asset that can be invested for the common good.  It is less obvious than their financial resources, but may be worth even more to your mission. The social connections you share with each other and others outside the group create an affinity network of trust and communication.  In today’s marketplace, this social network is highly valued by corporations willing to pay for the opportunity to introduce their own business to your members.

Never place the integrity and relationships of your organization at risk of being harmed by commercial interests by corporations that operate according to typical marketing methods of deception, guilt, shame, greed, fear, enticement and pressure to “buy” your members loyalty.  These forces are so common in marketing efforts, we have come to accept them as normal and may be blind to the harm they can do to a community with a shared commitment to a common cause.

Invest your social capital carefully and wisely.  Don’t put your most valuable asset at risk of being lost or weakened.  Measure the potential social/spiritual return on investment in terms of the good that may be accomplished, care for relationships in your community, and financial support to accomplish your goals.

With careful planning, you can safely invest your social capital through voluntary participation in a low key marketing enterprise that generates significant support for your mission without risk to relationships, reputation, or the cause you serve.  The right social business enterprise can even strengthen relationships in your group through collaborating for the common good and connect you with new people in your community.

What is Social Capital?

Ned worked hard all his life upholstering and repairing furniture.   He never had the heart to charge anyone what his time was worth and put himself into every project.  As an artisan, Ned was accomplished, but as a business owner, he could barely made ends meet to provide for his family.  As more people began to discard old furniture and replace it with inexpensive modern furniture, his business failed.  Ned retired and put his meager life savings into a bad investment and ended up penniless.  He hasn’t been able to work for 23 years but during that time Ned and his wife Emma have been in good health, traveled and enjoyed benefits he could never afford while he was working.

The wealth Ned knew later in life came not from his work or good good luck, but from his four sons and three daughters.  They were all anxious to see that Ned and Emma had whatever money could afford because of gratitude they felt for the love and care they all received through the years.  I only met Ned during the last year of his life. During my last visit a week before he died, all his children and grandchildren were around the bed and I reminded him that he was a rich man.   Rich in relationships and goodness.  Ned looked up from his bed at his descendents and smiled, acknowledging his riches.

This wealth is social capital.  Ned’s social capital was turned into financial capital through the gifts of his family.  When made by obedience to moral principles, the transformation of social capital into material wealth multiplies social connections and rewards rather than depleting them.  Good will, generosity, gratitude and loyalty is multiplied through relationships and stories of caring, sacrifice and hope.  Social bonds are only strengthened when friendship forms a legitimate basis for buying and selling that serves the common good of all stakeholders.

Social capital is created wherever people genuinely serve each other without seeking personal gain.  Friendship for the sake of friendship alone increases social capital.  Likewise, caring for family members simply because they are family and a need exists will build commitment to community that can lead to practical help or increase in material resources.

Among our most valuable assets are the relationships we hold dear.  They are filled with hope, potential and security.  Guard these assets, but be willing to share or give them away.  This is how social capital increases.  Don’t squander friendship or treat it lightly.  Don’t take it for granted or allow it to be destroyed through neglect or abuse.

Practice the faithfulness that Ned did with his family.  Encourage, listen, support and serve those in your social network.  Treat each one with respect and care.   Watch your social capital increase.  Live with the wealth that Ned and Emma earned with each kind word and deed.  This is the recipe for true riches.