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The original world nomad "Real knowledge is to know the extent of one's ignorance." - Confucius.

The business of being a social entrepreneur

AUSTRALIA | Monday, 16 June 2008 | Views [3305] | Comments [1]

The following is taken from an interview with Philanthropy Australia.

Simon Monk is a social entrepreneur who embodies a new style of giving. The founder and director of The World Nomads Group, Simon and his team established the Footprints Network, an alliance of e-commerce businesses and their customers who fund community projects from donations collected from their customers during online transactions.

Footprints collects many small donations from people already shopping online all around the world. The Footprints software API is available free to any company doing e-commerce, providing a ready-made corporate social responsibility (CSR) vehicle. The beauty of it is that it establishes a direct and meaningful connection between the business, the customer and the project they have chosen to donate to.

Is there a symbiotic relationship between travelling and giving?

I grew up in the North of England and my role models were mountaineers. Doug Scott, a mountaineer who runs treks to Nepal, was a key influence on me. The entire profit from his trekking operation goes back to the villages he knows from his travels. Travelling puts your own life in perspective – you can’t walk away from some places unaffected. 

The initial impetus for Footprints came from me, but many of us in the organisation have travelled widely, and it resonated with all staff that we should be giving something back to the communities we visit.  If it resonates with your staff it’s likely to resonate with your customers, so it works at a business level too. 

In fact, there isn’t a clear deliniation between Footprints and my company World Nomads. We don’t consciously fund Footprints, it is budgeted for within the company as just part of the mix: we promote it and get partnerships from it, so its just an integral part of our business, a device that works.

Why does it work?

We’re trying to work that one out too! You couldn’t invent something like the Footprints Network up front if you tried. You just have to take the journey and work it out afterwards. We just knew that there is a moral responsibility what when you travel, and you travel in places where somebody’s annual salary might be $200 a year, and you’re a wealthy backpacker, you have a responsibility to give.  And that works at many levels – just by going there you are contributing to those communities. 

How did Footprints come about? 

We literally started with an idea, a pencil sketch on the back of an envelope. 

We had been considering a CSR venture for a while, um-ed and ah-ed for about a year and then the tsunami happened in December 2004. At that point we said ‘let’s just build something’, and so we sketched it up and built it within a week. Four months later we’d raised $50,000!

We refined Footprints over the course of the next year, and then opened it up to other companies as an e-commerce donation solution. Several asked ‘ how do we know our sales conversion rate won’t go down?” so we took one of our travel companies we’d bolted Footprints into and looked at the volume of sales before and after we added Footprints, and discovered that sales had actually gone up by 1.87%, which was worth $20,000 a month.  That was quite unexpected. I would have predicted at best neutral, but in hindsight the products that we sell have an element of trust about them, and the fact that you’re associating yourself with brands in the not-for-profit space such as The Fred Hollows Foundation, for example, probably helps build that trust.

How does Footprints work?

One of our ideas with Footprints was to make everything quite tangible so each project has an outcome which you can see and feel and touch – like building a well or a school.   Footprints focuses on health and water and sanitation and education – the pillars of getting people moving ahead. We use Maslow’s heirachy of need as a basis, which says that if you can get people past needing the essentials of life - water, food, warmth, security, health, shelter - they take care of themselves. So this is where we focus our energies.  We think we should offer 3 or 4 projects only, for customers to choose from when they donate, and we can change those on offer to fit the project to be relevant to the transaction the customer is undertaking – for example if you’re paying an electricity bill you would be offered the opportunity to support a project to give solar power to a village in Nepal.  Keep the list small, and make it easy for the customer to say yes.

We were looking for projects to assist Indigenous people in the Australia, and one Indigenous community came to us and asked for some drums. We were rather surprised, but we needed to be educated to understand that the purpose wasn’t the drums, the purpose was health outcomes.  The drums came at the request of the elders at the village because they knew that if they put drums in school and said ‘you can’t touch them until the end of the day’ the kids would go to school and learn about health.  I went to the Garma Festival and one of the key take-outs for me was ‘don’t pre-judge what works in communities – take advice from the local community and go with the flow’. If they say they need drums you can do your due diligence, measure it and trial it, but as long as it delivers outcomes then do it.  The drums were completely left field, but they delivered the desired health outcomes. Again you couldn’t have made this up, you need to work and learn as you go.  This is the entrepreneurial side, and it’s the exciting part of the work.

The benefits of seemingly small projects roll-out and multiply: for example in India we built a well through Water Aid Australia. A year later when they went to report on the outcomes of that project they found that because they didn’t have to cart water the children could go to school, and because the children were at school the women could go to work and because the women were working and earning there was a power shift in the village. Even the aid agencies have been flabbergasted at the by-products of very small grants. That’s the part of the social entrepreneurialsim that I find abolutely facinating, all the rules are being rewritten and there is much more flux than we’ve seen in the last hundred years.

What’s next on your social entrepreneurship agenda?

If there’s one thing I dream of it is scaling the Footprints Network, turning it into the low cost low  online donation mechanism.  I would like 10,000 of the top e-commerce companies in the world to be using the Footprints API – it would raise hundreds of millions of dollars if every single time you came to buy something online, from any business, there was a little checkbox that said ‘just add 20c or  $1.00 for charity’. 

 

We’re not asking for even $10 – it’s just about rounding up a bill to the nearest dollar, or from $2.50 to $5.  I’ll take even one cent per transaction, because the cost of the transaction to us is zero.  

How do you deal with tax deductibility?

We don’t - we don’t offer a tax deduction facility. We bypass that, believing that if you can afford to throw a dollar in a charity bucket in the street then you can afford to tick the dollar donation box online, without the tax deduction option.   We’ve had customers asking if they can give us $150 for one of our projects, and the answer is ‘no, you can’t’.  We’ll suggest they go to an organisation like Oxfam which runs projects and donate through their website. 

With Footprints, one of the issues we’ve run into is that, when you raise money, if you’re standing on the street corner or holding a raffle in Australia you are physically in Australia, so you need to abide by the fundraising laws in this country.

With the internet, an e-commerce company sells their products everywhere and might take donations from anywhere so you simply can’t be compliant with fundraising laws from every nation at the same time. 

If you want to choose who you give money to, and take donations from, globally you don’t want to be beholden to any specific government as to whether or not that is approved.  As an example, we had a couple of doctors travelling and working in Khazakstan who wanted $500 to purchase the drugs to fund their clinics. They’re not a charity, don’t have DGR, but are doing great work and we wanted to give them $500. They provided acquittal reports and reciepts so that grant was transparent, but we can’t claim any of it.  That doesn’t work for us – and as we want to scale up Footprints we need mechanisms where we’re not going to have to pay millions of dollars in tax.

To combat that problem what would you like to see the government do?

The trick here is that its not just ‘our’ government but all governments around the world.   As with internet e-commerce, for global undertakings the rules are still being made up as you go along. In terms of defining our business, World Nomads is a micronational with only 50 people. The internet allows you to do that. The rules are being written as we speak; nobody has yet defined how to be a micronational, or fund venture philanthropy globally, so in this environment innovation and entrepreneurship, business and social, is thriving.

Tags: csr, difference, entrepreneur, footprints, giving, philanthropy, responsiblity, travel

Comments

1

This is a really quality post.I find this information through Google. Great job

  gogi kapoor Apr 21, 2011 8:18 PM

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