What’s the Potential Impact of This Billionaire’s Charity Network Consolidation on the Philanthropic Community?

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March 8, 2016; Forbes and Jewish Business News

Nonprofit Quarterly has featured many articles on the effects billionaires can have on the philanthropic community. Often, they begin by creating foundations to distribute large checks. Many quickly move on to other projects in the hopes they will expand their impact and scale their ideas onto the community. This is the road Todd Wagner has taken. Sadly, because they are out of reach of most local small service organizations responsible for the majority of the work in the sector, the tools he created and enhanced will likely have little overall effect.

Todd Wagner and his partner, Mark Cuban, saw potential in streaming video before the technology was even fully developed. They founded Broadcast.com in the late1990s, when many were still accessing the Internet via dialup. They sold the company to Yahoo in 1999 for $5.7 billion, the most expensive Yahoo acquisition to date, and although much of the service has been disbanded, Wagner and Cuban became billionaires.

After the sale, Wagner turned his focus to philanthropy. He started the Todd Wagner Foundation in 2000 to support young people who have few opportunities. Much of its work centered on Miracles, a program it created and then spun off to the Boys and Girls Clubs of America, as well as supporting other large nonprofits.

Over the last two years, as his foundation activities became established, Wagner pivoted back to online activities, this time focused on the needs of nonprofit organizations. He founded and bought three online fundraising platforms in an attempt concentrate and expand online charitable giving: Chideo, Charitybuzz, and Prizeo.

Wagner created Chideo in 2014. A portmanteau of “charity” and “video,” the platform offers exclusive videos developed by stars from diverse areas, including entertainment, sports, business, fashion, and culture, to support charities of their choice. Visitors support the charities by viewing the videos.

Wagner acquired Charitybuzz and Prizeo in 2015. Charitybuzz auctions luxury experiences and goods to support charities. Items include meals with celebrities and Fortune 500 CEOs, tickets to movie premieres, and other limited opportunities. Prizeo reaches out to a wider audience by offering similar items in a sweepstakes instead of an auction. Visitors entering the sweepstakes online pay a “small contribution” to enter; contestants can enter the sweepstakes for free by mailing their entry.

Wagner is working to centralize online giving by combining the three platforms into Charity Network. All three platforms continue to operate as for-profit entities providing 80 percent of the money raised to charities. Together, they have raised more than $200 million for 3,000 charities. Although 3,000 on its face sounds like a large number, in a sector of 1.5 million in the U.S. alone, it barely covers the tip of the iceberg.

Sadly, Wagner’s description of his efforts as “disrupting traditional fundraising” could not be farther from the truth. Wagner’s efforts remind me of a dream many small but savvy nonprofit leaders explore but quickly move away from. The analysis begins with the question: What if we could reach out to [fill in your local billionaire or entertainment legend]? If only Wagner could add a method on the platforms for the small local nonprofit, located in the town where said billionaire or entertainment legend grew up, to grab their attention and potentially build a relationship. Now that would truly disrupt traditional fundraising.

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Funding the Nonprofit Grocery Store: A Variety of Models at Work

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March 26, 2016; Waco Tribune and NPR

In the United States, 2.3 million people live in food deserts—places without access to grocery stores offering fresh fruits and vegetables at reasonable prices. Across the country, grocery stores serving rural and low-income areas are struggling and many are dying. As the large chains leave, residents are banding together to explore new methods of maintaining their neighborhood stores, including membership, connecting to other nonprofit or business services, and crowdfunding.

In Waco, Texas, Mission Waco has raised thirty-eight percent of the funds it needs to convert a vacant 6,500 square-foot building into a vibrant “Jubilee Food Market.” Its goal is to raise $488,000 to transform the eyesore into a community asset. Many years ago, the building was home to a Safeway, but the grocery store has long abandoned the community. Now, the nonprofit is looking to donors from as far away as Maine to rebuild this essential resource.

Jubilee Food Market supporters purchase shares of stock for as little as $25, although larger investment options are welcome. Mission Waco’s project budget consists of 4000 $25 stock shares for remodeling, 10,000 shares to operate the store for the first year, and 5525 shares for the ECSIA Hydroponics Greenhouse. Shareholders receive quarterly reports on the store’s status and the opportunity to participate in the shareholders’ meeting. All donors and residents of the 76707 ZIP code receive an Oasis Club Card entitling them to discounts on store purchases. The store is scheduled to open in September 2016.

Mission Waco chose to open a grocery store after surveying residents and learning the overwhelming majority wanted a supermarket. The organization’s mission is to provide Christian-based holistic programs that empower the community’s low income. The organization also operates a World Cup Café and Fair Trade Market, Jubilee Theatre, and Urban Edibles food trailer.

In Bowdon, North Dakota, residents are also at work. They came together to continue the operation of their grocery store after the store’s owner died and no other owners came forward. The next closest grocery store is eighteen miles away.

Run as a membership store similar to Costco and Sam’s Club, the effort is working but the margin is tight. They recently opened a thrift store and bakery nearby to increase business. The tiny town surrounded by fields of soybeans, wheat, and corn lost its community school years ago. Without the grocery store, the town would disappear from the map.

The loss of community grocery stores and its effects on rural America led to six federal agencies creating an $800,000 Obama administration initiative, “Local Foods, Local Places,” to support programs to create community owned grocery stores and farmers’ markets. Twenty-seven communities were selected from over 300 applications. Each community will work with a team of experts to recognize local asset and opportunities, set revitalization goals, and develop an implementation plan using these resources.

Throughout the United States mega-grocery stores are abandoning their rural and low-income urban communities for wealthy city edges and suburbs. Without these businesses, residents lose access to fruits and vegetables and gain more processed fast food outlets and convenience stores full of fat, cholesterol, and sugar. This phenomenon is contributing to the obesity epidemic and leading to an increase in heart disease and other diseases associated with this condition.

Food is Power, a California nonprofit “seeking to create a more just and sustainable world by recognizing the power of one’s food choices,” found that wealthy areas have three times as many supermarkets as poor ones. And the disparity is even more pronounced when comparing racial makeup: White neighborhoods have four times as many grocery stores as African American communities, and the stores in African American communities are smaller with a more limited selection. Overall, according to the Economic Research Service of the US Department of Agriculture, 2.2 percent of all households do not own a car and live more than a mile from a supermarket.

Although creating and running a community-owned grocery store is a challenge, Willow Lake, South Dakota’s Lake Grocery has been a beacon for the community for over five years. Operated by Willow Lake Area Advancement, the store employs a full-time manager and two part-time employees in addition to volunteers. Although the organization described the project as a leap of faith, it has worked out well for the community and the nonprofit.

Original site: https://nonprofitquarterly.org/2016/04/01/funding-the-nonprofit-grocery-store-a-variety-of-models-at-work/