Charity through Trade
Nonprofit entrepreneur promotes social enterprise.
By Luka Starmer ’11
A 2008 op-ed printed in Financial Times highlighted this scenario: an individual farsighted enough to have invested $1,000 in Micro-soft when it went public in 1986 would have stock valued at close to $500,000 today. However, as it stands, if that same individual invests $1,000 in a highly productive nonprofit, he or she is only eligible for a one-time tax deduction for giving to charity.
The op-ed was written by Robert Egger, president of the DC Central Kitchen in Washington, D.C., a nonprofit that uses leftover food to feed at-risk individuals and offers culinary job training. Egger visited Ithaca College on May 3 and engaged an audience of students, faculty, and community members with the Microsoft scenario, followed by a question and a vision.
“Why not a return-on-investment formula that will allow you an annual tax deduction with increasing value based on the same rate of return principals of a dividend check?”
In other words, what if investing in the economic, social, and environmental well being of your own community could help make you wealthy?
Egger, inspired by a volunteer experience feeding the homeless, opted to switch career paths from nightclub owner to social entrepreneur. In 1989 he started DC Central Kitchen, which distributes food donated by restaurants, hospitality businesses, and farms to more than 100 shelters in the D.C. area, creating 4,500 meals daily. The organization’s job training program assists individuals overcoming homelessness, addiction, or incarceration by preparing them for a successful career in the food industry while they get themselves back on their feet.
Egger contests that each DC Central Kitchen graduating class of 80 to 90 students will produce 300,000 meals for the community over the course of the 12-week program. They will then head out into the service industry and collectively earn $2 million and pay $240,000 annually in payroll taxes.
The DC Central Kitchen also runs a for-profit catering enterprise to help fuel the humanitarian services it provides.
In Egger’s presentation at Ithaca College, he accepted praise for his hybrid nonprofit model but admitted that there is no way the kitchen could ever feed all the at-risk populations in his area. Instead, he looks to IC and other college students to imagine a world where this need would be sharply reduced. He asked who in the audience had ever volunteered in high school or since. All hands rose. He cited that the United States gives $300 billion to charity every year, and 90 million people volunteer.
Egger’s belief is that college students are a part of a generation that have the numbers and economic power to challenge the vision of capitalism. He imparts that the “Carnegie/Rockefeller model” is dead, wherein one does what it takes to land a “real” job first, hoping to give back to communities later. He insists that new graduates no longer need to choose between making money or doing “good.”
However, he advises that we first need to reject the dichotomy that dot-coms make money while dot-orgs do good deeds. Purpose and profit should not be sought separately, he says. Instead, daily commerce can be channeled toward businesses paying good wages, reinvesting in their communities, and moving toward environmentally responsible practices. That’s the potential of social enterprise.
“The way you spend your money every day can be your philanthropy,” he says. “The way you run your business can be your vote.”
Purpose and profit need not be separate, says Robert Egger.