By Jeff Church, Co-Founder of NIKA
As we've been together building NIKA over the past year, I've shared some personal work and life stories with some of our team members. A few of the team members, otherwise known as gluttons for punishment, have asked if I could share more of my experiences. Although I'm a little embarrassed and very humbled that you would like to hear more, I thought that it might be fun to start occasionally sending a story as I come across one or reflect on one.
Every business wants to be successful, right? That's what we call a slow pitch question in a softball game! Anybody can answer that one. Why, however, is it so important for NIKA to make it? One word - "sustainability". We and other companies like NIKA need to be successful because these types of business (ie those that donate all or a large portion of their profits) offer an incredible breakthrough in the ways that charities can solve for a possible shrinking donor income stream. Without businesses that give back, NGO's must rely on fundraising to achieve their donation and project objectives. When times are good, people are very willing to write checks to support their causes. However, when times are bad people will need to take care of themselves first and if there's anything left over, then support their cause. Let me give you a short example.
At NIKA we are all about helping to end poverty through bringing clean water to those who don't have access to it. One way we do that is through the donation of wells with our profits. Suppose, instead of selling bottled water, we were focused on having people write checks that we would then donate to water projects...that would be a logical approach. If year after year our NGO's depended on us to give them our donations to build their wells they would be very happy with us. If, however, the economy went into a recession as we're currently in or if another world catastrophe occurred, such as Haiti, then our donors could logically tell us that while they believe very much in our cause they feel the need to make sure that their personal finances are shored up or that they need to take a break this year from supporting us to support the efforts in Haiti, for example. We would certainly understand, however, our local NGO partners who have people in country depending on them to build wells and to bring clean water, could be hurt very badly. Although this is simple example, the records of donations over the past thirty years bear this out. When tough economic times occur, donations tend to drop by about 5%. This means layoffs and program cuts.
NIKA's model is one that doesn't need to rely on economic cycles or donor priorities but rather it uses the market place to create the profits which are then contributed back into the causes. Businesses such as NIKA are challenging to get to a critical mass level but if done correctly they can result in a steady stream of profits to be donated. Consumers also tend to support these type of brands as long as price and quality are competitive. Recently, I read a survey that was done outside of a well known supermarket in White Plains, New York. One hundred shoppers were asked the following question: "If your supermarket offered new food products that were equal in price and quality to the products that you now buy, and you knew that 100% of the profit from these new products would be used to end world hunger, would you buy these new products?" 92 of 100 shoppers answered "yes." We think that this is pretty amazing. Over 90% of shoppers are willing to buy "cause" based products. NIKA clearly fits into this type of a business. What this says to us is that the only thing keeping us from realizing significant, nationwide market penetration is brand awareness and distribution. Through our various marketing efforts including grass roots, professional sales, viral tactics and more, our focus must be on making the consumer aware enough of NIKA that as they are making their water decisions they say, "Oh, that's NIKA, I saw them at my local street fair and they do great things for society and for the environment. I think that I'll give them a try versus Evian or Fiji!" I'm pretty confident that we can successfully get the nationwide distribution as the brand grows.
There are other companies as well that are doing similar things. If you're interested and have a moment, check out these companies and these You Tube links:
Newman's Own - The Grand Daddy of all for profit businesses that donate back their profits. They donate all of their profits, now over $250 million to charity.
Give Something Back Business Group - An office products supply business that donates all of their profits.
Finnegan's Beer - A beer brand committed to giving back.
TOM's - For every pair of shoes that they sell, they donate a pair to children without.
Future business and philanthropic solutions must be thought of out of the box. They then must be implemented with fundamentals and they must retain their focus on not get easily diverted into trying to do all things for all people.