5 Reasons to Reform Social Network Marketing

1. Our social networks are being targeted, tapped, and stolen.

Corporations are very intentional about entering social networks with word of mouth and social media marketing tactics designed to gather customers through personal relationships. This is already happening.  “Buy one, refer 3 friends and get it free” is a common offer that places our social networks at risk.  When friends begin to target each other for personal gain, relationships change.

What once was a just a party, night out with the girls, parents association meeting, kids ball game or neighborhood bar-b-que becomes an “opportunity”.  Friends know when they are victims of a sales program. Sales training about how to be more effective and persuasive just make things more uncomfortable.

But it’s already here.  Since it can come through any individual without permission or warning, it can’t be ignored.  The force is too strong and variable be eliminated with rules or regulations.  It needs to be reformed to serve the common good.

2.When we recognize the value of our social networks, we can secure the funds we need for doing good.

Corporations that are investing millions of dollars in social media network marketing among friends are willing to invest that money in nonprofit organizations that produce the same results for the company- more customers. The same corporations that invest in FB, twittering among friends, followers of a youtube star or word of mouth referrals will gladly support a cause we share as customers.

When we are conscious as a social network, we can shift the flow of finances used for marketing into a common purpose to do good. When those who support a common cause agree to cooperate for community benefit, everyone can win.  Transparency and integrity can take away the weirdness and suspicion about hidden agendas or being used.

Agreement up front about a good product with a good company that supports a good cause through our cooperative effort removes the pressure that can be divisive in a social network or cause people to fall away. Only invest your social network for a good cause if you are investing in your network at the same time.

3. Relationship marketing is about RELATIONSHIPS.  If done properly, relationships can be strengthened.

When used blindly, any kind of marketing can destroy relationships.  Even with good intentions. When marketing becomes a campaign, friends become customers and quotas are to be met, we begin to fear opening the next email or answering the next phone call from certain friends. The spam filter doesn’t work and a “gotcha” contact chips away at goodwill, respect and trust.

With awareness and commitment to relationship ethics of respect, freedom, honesty and justice, bonds can be created around the common good. When resources are shared with equity and transparency, everyone benefits and the joy of economic well being generates hope.  Mutuality in fair exchange between friends teach us that an alternative may exist to the win/lose marketing game we’re accustomed to playing.

As we consider what is best for the environment and the disenfranchised and those with special needs among us, the value of social marketing allows us to direct commercial profits toward doing the greatest good. Cooperative effort that creates financial support for creating and sustaining common space and a common purpose creates a true partnership. Everyone contributes and the volume of markets created brings shared power for consumers to support work that provides the most social benefit.

4. Integration of money with relationships develops character by testing motives and revealing values.

Free choices about how money will be spent for essential products and services create a voice from consumers about what companies will receive loyalty over time.  We can promote healthy sustainable products and services that are safe and contribute to a better quality of life.  Sharing a concern that everyone’s children do well, not just our own creates a caring community and encourages corporations to give attention to multiple benefits and consequences beyond the financial bottom line.

Cooperative intentional buying  and selling requires an openness and communication that builds authentic community.  Self determination and self sustaining organizations open the door to deeper belonging and positive identity. Shared pride that comes from working together helps reinvent the world as a more peaceful and satisfying place to live.  Accountability becomes a personal choice more than attempts at forcing compliance.

5. The next generation needs and deserves a better economic structure.

A more equitable economy allows everyone to participate according to the same rules of distribution. That doesn’t mean that everyone will experience the same benefits, but everyone will have opportunity.  Hard work and contribution to the common good will be rewarded. Our acceptance of privilege makes it difficult to visualize a system where more people are able to secure their own welfare, but when serve more than our own interests, we find an abundance that is not easily recognized in a culture where scarcity is assumed.

Short term interest in quarterly reports and weekly balance sheets give way to future studies that include our great great grandchildren.  We can spend our income in ways that influence a course of events and create systems to combat unintended negative consequences of current decisions.  We can learn to sacrifice today that which makes a way for the best to emerge through us all for generations to come.

The profit motive alone will never accomplish these five objectives. With courage and collaboration we can bring reform to a faulty economic system revolving around greed and self interest. Through agreement to experiment with new forms of exchange, we can discover a better stewardship of all that is given for us to share.

The Allurement of Private Enurement

IRS 501 code reads, “The organization must not be organized or operated for the benefit of private interests, such as the creator or the creator’s family, shareholders of the organization, other designated individuals, or persons controlled directly or indirectly by such private interests. No part of the net earnings of a § 501(c)(3) organization may inure to the benefit of any private shareholder or individual. A private shareholder or individual is a person having a personal and private interest in the activities of the organization. If the organization engages in an excess benefit transaction with a person having substantial influence over the organization, an excise tax may be imposed on the person and any managers agreeing to the transaction.”

Legal judgments on what this regulation means have been nebulous at best because it deals with invisible assets in relative terms.  It may be simple to count the dollars one receives, but but not so easy to measure the trust, influence, authority, good will, promises, teaching, gifts, relationship advantages, shame or gratitude that are connected to money received by members of an organization.  The term “inurement” is so much of a mystery that WordPress doesn’t even provide spelling for the word.

Although legal considerations matter since a nonprofit organization can lose or fail to obtain tax exempt status for violation of the private inurement code, the greater danger may be a loss of trust and transparency among members/supporters of an organization.  The negative results are more felt than proved on a specific budget line and can be harmful to much more than an organization’s tax status designation.

At the core of private inurement is a practice of using the assets of a nonprofit organization for personal gain.  It is often limited to examining the tangible investment of nonprofit funds to create exuberant compensation for paid staff of the organization, but a moral interpretation goes beyond legal definitions to suggest that anyone in leadership may unfairly use their intangible power or leadership over members to influence them is such a way that he or she profits financially as a result.

Leadership is a sacred trust that ought not be entangled with suspicion or mixed motives.  When considering a profit/nonprofit partnership, there is always the possibility that as members of a community enter business arrangements within the social network, there may be charges of private inurement, or using the organization for personal benefit.  This can happen when an auto mechanic, real estate agent, financial planner, construction contractor or Mary Kay representative does business within a congregation or nonprofit organization.

We may argue with a minster or nonprofit CEO who strongly influences their group to contract with their own family members to perform maintenance on properties owned by the nonprofit at a fee that is far beyond normal or for services that are never rendered.   We would probably not, however, complain about a son or daughter providing music lessons for a reasonable fee to members of the group (as long as no undue pressure is applied by leaders), or about the leader of a group selling books he or she has authored.  When members of an organization freely choose to do business with one another, the normal conflicts of commerce may arise, but the burden of unfair advantage among members should not be an issue.

Care must be taken to level the playing field of opportunity for all and ensure that no one benefits simply because of their position.  It is difficult to establish rules since the connection among friends is a primary dynamic of relationship marketing and coexists with more formal relationships and informal power within organizations.  One possible strategy is to be sure the organization benefits from any commercial endeavor and then the organization can choose ethically and legally how a leader would be compensated rather than allowing a leader to act independently with unlimited range of profit through the organization.

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.

Who wins in a profit/nonprofit partnership?

Social Business has become a term describing any enterprise that serves the common good and creates a profit at the same time.   The business world is learning that what is good for people and the planet is often good for business as well.  To be sustainable, business must integrate social networks and serve other interests alongside the financial bottom line.  A true social business attends to the needs and concerns of everyone in the marketing system.  Everyone is respected as a stakeholder and treated fairly with opportunity to benefit from business transactions.

In a partnership including more than company employees, management and stockholders or owners, benefits are mutual for all participants.  Goals are modified so that everyone who contributes to the work of the business profits from any success.  Even the definition of success may change as profit comes to mean more than monetary.  Google and other social media businesses demonstrate the value of treating everyone with meaningful advantages.  Subprime mortgage derivatives and credit default swaps that show little regard for homeowners, investors and the larger community demonstrate what can happen when justice, trust, integrity and care are not employed for the benefit of all.

Balancing social and financial profits takes on survival value for businesses in a world that is becoming more conscious of hidden or external costs to consumers, workers, communities and environment. This balance is also needed for any nonprofit project that requires material resources to fulfill it’s mission.  If a nonprofit chooses to partner with a for profit company, it is important that the goals, needs and health of each is addressed.  In an ideal partnership, the for profit company will benefit from growth of their business at the same time that the nonprofit organization will grow in effectiveness by using commercial profits and resources to meet their own goals and expand their impact.

Until both groups understand their need for each other, each will operate from the assumptions of competition and scarcity rather than belonging and abundance.  Every decision or policy will be measured by who gains he most and who loses the most.  Suspicion and self interest will poison the relationship.  Results will not best serve either the social good or business interests when they are viewed in opposition to one another.

So the answer is that everyone wins.  Policies, attitudes and practices that give attention to all stakeholders provides for the most sustainable social business.  The strongest social enterprises will be those that are financially sound.  The strongest companies are those that work according to the ethical, moral, social and spiritual values that guide most nonprofit organizations serving a cause greater than their own existence.

The next question is to find those who are willing to play a game where everyone wins.

Converting Social Capital to an Economic Resource

No conversion of social capital into financial capital is valid unless the value of social capital increases in the process.  This is common sense from a practical perspective.  If your connections, good will, hope and trust diminish, you lose the core of future productivity.  The energy becomes negative and not only hinders any hope of financial gain, but decreases what is needed for growth.

On a deeper level, however, if relationships are harmed in the process of converting social assets into financial support for programs, staff or facilities, you have just betrayed yourself as an organization.  The heart, the core purpose and life energy of an organization established to good must first do good for it’s own members.  To offend, divide or harm members in our attempt to do good is to violate the basis of what we claim to stand for.

Individuals may certainly disagree and even choose to come and go based on the changing direction of organizational goals.  This is different than seeking financial gain at the expense of social capital that has been built up over a long period of time.   Whenever social capital is redeemed to make a step forward, relationships should be strengthened at the same time, increasing the value of relationships used for advancement.

An example of increasing social capital at the same time it is used to accomplish a goal or it is converted into material benefits is when the group can feel a corporate pride in what is being accomplished  through the work, expectations, compromises made in the conversion.  Another gain in social assets can be seen when the visible result of using relationships to accomplish something of lasting value attracts new membership or deepens the commitment of current members.  Skills developed in converting social capital into tangible assets without harming mutually beneficial connections becomes an additional value to the organization in the form of new skills, experience and knowledge.

The joy of spending time together, trustworthiness that is maintained, willingness to sacrifice for hope of future benefits, ability to manage conflict, keeping primary purposes and values in focus, collaboration, use of individual gifts and making space for differences are essential to the health of any organization.  To be diverted away from these benefits in order to meet any fundraising goal or employ a new strategy is an unacceptable risk.

The nature of our social and spiritual life together will change.  Different priorities will arise.  New learning and goals will arise.  New methods of accomplishing the purpose we came together are necessary.  Our relationships will be tested.  But know that social capital is not to be squandered on an ambition that reduces the care and concern everyone feels for the organization, it’s work, and each other.

Be sure a careful accounting is being made with every change or challenge to the equilibrium of your group.  Never place such value on what can be seen or counted in monetary terms that securing it places your reason for existing at a risk that is too great.