Thursday, September 18, 2008

IPOs for Hope

"We run a business here -- but instead of selling cars or candy to kids, we're selling hope and leadership."

Nancy Lublin, CEO of Do Something in "Non-profit Capitalism," The Economist, September 13, 2008

Do Something promotes volunteerism by teenagers. Its board is putting together an IPO prospectus to raise $8 million in the markeplace so that Do Something can double in size so that it can reach two-thirds of our 32 million teenagers. No cash returns, just philanthropic impact along with efficient operations and regular reports.

Creating marketplace mechanisms may be the most effective way to attract investments from new wealth, fledgling family foundations, and trust fund accounts. Potential IPO offerings could be evaluated and rated -- making transparent the underlying quality of the "hope" being sold.

This is an intriguing approach compared to relying upon multiple intermediaries to tap these funds and then invest them in nonprofits. I suspect that the "simpler the better" will reign in terms of the nonprofits that can put together saleable IPOS for expansion, meaning that more complex nonprofits interventions without the brand may have a harder time using this financing tool.

Today may not be the right time for going to market or what's left of it, but who knows. Investing in a solid nonprofit seems like good business sense compared to the debacle on Wall Street

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