Green Dimes: The VC-Backed For-Profit Philanthropy

There’s a lot of controversy surrounding the concept of for-profit philanthropies.

Personally, I think the idea is pretty good, although I do understand that at

the margin, there will always be a trade-off between doing the maximum amount

of good and making the maximum amount of money. Which is why some people got

very upset when it was revealed

that Mexican microlender Banco Compartamos had made hundreds of millions of

dollars for its investors.

I do still believe that a happy medium can be found, however. In some cases

the more good that gets done, the more attractive the business is to its customers,

and the more profitable it becomes – everybody wins. That, I’m sure, is

the thinking behind Green Dimes, which

has just raised

more than $20 million of venture capital from Tudor Investment Corporation

and others.

The idea behind Green Dimes is that individuals sign up for a dime a day, and

in return the company will reduce the amount of junk mail they receive by more

than 75%. That in itself is good for the planet, but Green Dimes also plants

one tree per member per month – more than a quater of a million trees

so far.

I daresay that something like Green Dimes might be sustainable on a non-profit

basis, but Green Dimes is ambitious: it wants to grow fast, it wants to expand

internationally, and it doesn’t want to just use its own cashflow or waste vast

amounts of time filling out grant applications and begging donors to write relatively

small checks. Much better, in many respects to go for-profit, get lots of money

up front. More people sign up, more trees get planted, and the founders get

to make lots of money to boot.

Everybody wins, in theory. I just hope it works out that way in practice.

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