Effective donation by combined selling
Published on June 19, 2014 um 13:44
Summary of your idea
Every time you spend money, youre casting a vote for the kind of world you want.Anna Lappé, American writer, speaker, activist. Many countries face the problem of extreme social and economic disparity between the wealthiest and the poorest. To tackle this problem we propose a brand new way of consumption. Here is the idea: in every purchase, part of the purchase will be donated. And despite the donations, the price of the goods/services sold remain the same. For example, if you buy a book, part of the value will be donated in form of a book donation to a needy child of a local school who can´t afford to buy a book. If you buy food, part of the value will be donated as food to hungry people. If you buy a house, part of the money will be donated to pay for shelter to homeless people. If you buy medicine at the drugstore, part of the money will be donated as medicine to seek people who can´t afford it. And so forth. Note that the same product bought is donated. In this sense, there is a direct connection between the purchase and the donation, what makes it easier for the consumer to relate its purchase decision to helping others. So, go shopping becomes a responsible, caring, non-selfish action that directly benefits the whole community. It is important to say that there is mutual gain for the needy community, the consumers, and the companies in this business model´s value proposition. The companies benefit in terms of: sales increase, market share increase, profit increase, scale gains, tax deduction if applicable, and enhanced customer relationship, brand positioning and brand equity in association with renowned NGOs responsible to give the donations to the community, as demonstrated on topic plans for implementation and sustainability.
Expected impact of your idea on sustainable development
The idea proposed is not just about giving goods to the ones that need, but above all, it is about effective donation. That means giving people a chance to develop themselves (knowledge, skills and abilities) with dignity to permanently reassume their responsibilities in an independent foreseeable future, so that they can be part of the consumers group, ready to help others. That implies using measurable indicators to: identifying problems, developing solutions, assessing results, replicating successful experiences, all with real expectations and a feasible set of goals in a determined amount of time. Partnerships with well-established NGOs (non-governmental non-profit organizations) renowned by their high impact social assistance is a must. The expertise and knowledge of these key partners will help develop measures to evaluate social impact that includes: number of people helped with donations, quantity of donations, quality of donation, impact of donations on people´s lives. For companies, success can be evaluated by: participant company´s financial statements that indicate sales increase and profit increase, as well as brand value assessment, market share, customer relationship, brand positioning. The assumption that explains sales increase is that consumer´s willingness of helping others can be particularly important to the consumer behavior in choosing a certain brand and the propensity to consume. More specifically, where to buy and how much to buy. For this idea, measures are: scalability of the business model, steady dissemination of the model throughout companies and consumers assessed by the number of partnerships with companies (eg retail stores), diversity of companies´ industries (for example food, education, health), the number of partnerships with NGOs and well established partnership with advertising agency (for advertising campaigns to share this idea to consumers and companies).
Plans for implementation and sustainability
The business model is better explained by one transaction: 1 consumer buys 1 bottle of milk in the local grocery store at the price of $10. Let´s suppose the grocery store has a 30% profit margin, what leads to a $3 profit for this transaction. Revenue= $10 Expenses= $7 Net Profit= $3 The magic starts now. It is broadcasted an advertising campaign conveying the idea that for every 10 bottles of milk sold in that grocery store 1 bottle will be donated to the local needy community. The appeal of the marketing campaign and the social impact of this transaction doubles the number of bottles of milk sold (for instance, McDonalds McHappy Day in Brazil increases an average of 10 times the number of BicMac Sandwiches sold in one day). In terms of profit, the store will have 2 times more profit. Revenue= $20 Expenses= $14 Profit= $6 A golden rule for this business model states that 50% of the increased profit will have to be donated. Therefore, the store´s profit will increase to $4.5, what means a 50% profit increase. Donation represents the other 50% of the increased profit = $1.5. It means that for every 2 bottles sold $1.5 is donated. So, for every 1 bottle $0.75 is donated, so for 10 bottles = 10 x $0.75 = $7.5 is donated. The bottle cost price is $7 (assuming, for simplification sake that COGS represents the expenses), it means the donation will be of 1 bottle for every 10 bottles sold (the remaining $0.5 will be used for the advertising campaign costs). Net Profit = $6 $1.5 = $4.5 Donation = $1.5 The 50/50 balance of increased profit that was donated in our example can be adjusted to each industry in order to optimize the business model functioning.
Law school and business management graduate willing to find solutions to social problems and helping people as much as possible. Graphic designer, research interests: studies of cognitive behaviors of the minorities, studies of interaction patterns of people with disabilities in general and studies of the impact of collaborative interaction with governments on people´s lives. We are interested in social development, income distribution, lost value transformed in shared value, we seek no only to donate but to develop people so as to give extreme poor people conditions of dignity and development for further independent lives. We feel inspired to help people.
Stage of Idea
Your idea has a positive impact on
peace-building , environment, education, health, sustainable energy, food security, poverty reduction, elderly, sustainable trade, cultural diversity , empowerment of women, youth, other: