As part of my ongoing job search (BTW, are you hiring?), I met Michael Pirron this afternoon. Michael has a distinguished educational and professional background with a focus in Information Technology and has worked around the world in various consulting roles. Last year, Michael created a new company called Impact Makers, which to my knowledge and his, has a very unique business model. I also think it may be disruptive (more on that later).
As Michael explained to me, there are generally two types of social enterprise in the US today:
- A nonprofit who generates their own revenue stream by operating for-profit businesses to support their service delivery to the community. The problem with this model is that most nonprofits lack the capacity and the experience to run a competitive business venture.
- A for-profit business that gives a small percentage of their profits to fund nonprofits (i.e. Ethos Water or Newman’s Own brand). The problem with this model is that the shareholders can, at any time, decide to stop the program or sell the company.
Impact Makers has introduced a new model where a partnership is formed between one nonprofit entity (Impact Makers’ Management and IT Consulting Services) focusing on generating income in the for-profit marketplace, and a nonprofit partner who is delivering services to the community. Impact Makers not only donates it’s profits, but also provides consulting services to the partner, allowing it to focus with greater effectiveness and efficiency on its core competency – delivering community services.
Is this model disruptive? I think so for two reasons:
- In today’s marketplace, companies are increasingly concerned with the other bottom lines – environmental and social responsibility. Major companies frequently use vendors to provide services like IT consulting. A company that chooses to use a vendor like Impact Makers gets top talent at competitive rates, but instead of generating profits for the vendor, they are directly funding a community service provider and that gives a vendor like Impact Makers a competitive advantage.
- Individuals working outside of non-profit systems do not have many opportunities to make a substantial difference in their community. They might volunteer occasionally or donate money to charities, but unless you are Bill Gates, you probably don’t have the resources to contribute on the scale of funding a program. Under this model, employees receive competitive salaries while their profit generated from their work directly contributes to improving the community.
This second point, the ability for individuals to have a bigger social responsibility impact, struck me as being analogous to what has happened in a number of other other industries where power has shifted to individuals, thereby giving them a voice and disrupting the status quo.
Impact Makers does not have capital lying around with which to build their business. Instead, Michael is relying on networks and contacts to get contracts. Impact Makers currently has one service delivery partner, a local organization called Safe Harbor which provides confidential shelters for abused women and children. Over time, Michael would like to see other professional service industries adopt his model, should it prove successful. There really isn’t a limit to the types of businesses that could adopt this model. I don’t normally use this blog to promote a business, but I was so impressed with Michael’s model that I wanted to share it. I don’t have a huge number of regular readers, but when you consider the reach of the people I do have conversations with, both here and on Twitter, the reach can be pretty big.
What do you think about this idea? If you like it and have a blog, consider telling your readers about it. Do you have clients who need Management or IT services? Tell them about Impact Makers. If you want to learn more about it, contact Michael ((804) 212-5056 or firstname.lastname@example.org ), and tell him I sent you.