Building the progressive economy
by Shai Sachs, Fri Feb 20, 2009 at 04:36:20 AM EST
As the recession deepened over the last few months, one thing I've worried about (among plenty of other things) is the toll that it would take on the progressive movement. It's no secret that the movement runs on a shoe-string; a single hacker attack is enough to take out a pretty significant chunk of the infrastructure running the progressive blogosphere. It seems inevitable that a wallet-emptying recession will slowly drain the spending ability of progressives, and thereby drag down our nascent institutions.
The key weakness within the progressive movement's business plan (forgetting, for a moment, that the progressive movement isn't a single, cohesive organization, and that many organizations within the movement don't have anything like a business plan in any case), is that a large part of our revenue relies on donations. In a recession, voluntary donations are the easiest things to cut from a household budget. A further weakness is the massive amount of money that leaves the progressive ecosystem. In five years, ActBlue has raised $88 million; some of that has gone to necessary expenses in progressive campaigns and is money well-spent, although no doubt a significant part of that money ends up in the pockets of anti-progressive political consultants. And some of that money does return to the progressive ecosystem, in the form of advertisements in progressive blogs, for example. But on the whole, the progressive blogosphere leaks donations like a sieve, meaning that even the flush years don't leave us with a lot left over for recessions.
Fortunately, I believe it is possible to address these weaknesses, and to help keep the lights on during the recession. Conceptually, it's fairly simple: diversify our business plan beyond donations, and design mechanisms to keep recycle more money back through the progressive ecosystem. The particulars are a bit more tricky, but below I'll outline a few possibilities for implementing these high-level solutions. Other ideas are certainly welcome; feel free to leave your thoughts in the comments.
Organized affiliate codes for progressive products
Many progressive blogs, and some organizations, already make money from affiliate marketing programs; probably the most well-known program along these lines is the Amazon Associates program. Affiliate marketing programs like these generally fail to raise a lot of money for any one organization, because they don't generate a lot of sales. At the same time, the money from sales usually touches only one, or sometimes two, progressive entities along the way - the author of a progressive book, and sometimes, a progressive publisher like Chelsea Green or Ig Publishing. The retailer (Amazon, typically) is not usually a progressive organization.
If you think of a progressive book sale in terms of a series of monetary exchanges resulting in a customer getting a book, with each exchange yielding profit for the vendor, then the typical progressive affiliate book sale only yields a small bonus to the progressive blogger, and a fraction of royalty sales to the progressive author. The profits paid to the retailer, the publisher, and the shipping company are all, usually, lost to the progressive ecosystem. (There are, of course, exceptions: the sale of a Chelsea Green book through Powell's, with delivery handled by UPS or the Postal Service, supports progressive organizations and unionized organizations at almost every step of the way.)
There's a lot of value being left on the table here, and there are many lost opportunities to sell progressive products and support progressive companies. There are a wide variety of products made by progressive organizations: progressive books, CDs, magazine subscriptions, and movies; Credo mobile service and Working Assets credit cards; and a virtually limitless number of green products. Heck, you can even create a neighborhood group to buy solar panels in bulk.
There is, I think, ample opportunity for progressive organizations, particularly bloggers and local organizations, to focus a bit more deeply on affiliate sales of these kinds of products. Some of these products are potentially high-margin, and some of them (like solar panels and energy-efficient light bulbs) could even be net profitable for their consumers. All of them would help keep more money in the progressive ecosystem, as they would channel more money towards progressive companies. The reason this opportunity is largely unexploited, I think, is that it's a pain in the neck for companies to maintain affiliate programs, and that it's a pain in the neck for bloggers and local organizations to maintain a dozen different affiliate program memberships.
A well-organized general-purpose affiliate program for progressive products and services could overcome this hurdle. Such an affiliate program would need to herd cats, to some degree, among progressive companies, and convince them to fit their affiliate programs into a standard one-size-fits-all shape, or to begin to offer affiliate programs in the first place. It would also face the hurdle of Amazon's entrenched position. And, it would need to offer a flexible API and embeddable widget architecture, to allow progressive organizations of all shapes and sizes to use the program.
But the benefits of such a program could be significant. It could boost demand for progressive companies; provide much-needed revenue for bloggers and local organizations; and, in some cases, help progressive consumers save money by becoming more energy efficient.
Green businesses embedded in progressive organizations
Among other things, the stimulus bill included about $5 billion for weatherization efforts for "modest-income homes", according to the summary produced by Nancy Pelosi's office. That's a massive increase over the previous year's allocation of about $272 million; because the money has to be spent in 18 months, actually spending the money may be a bit of a challenge. There may not be enough existing weatherization capacity, meaning that there are opportunities to create new weatherization companies.
As Leah Edwards has written, non-profit ownership is one way to bootstrap a small business; there may be some cases in which owning and operating a small business is a logical step for a progressive non-profit. Weatherization consulting and implementation is one industry where those opportunities are not just available and lucrative, but a good fit for a mission-driven organization.
In particular, I'm thinking of progressive churches, many of which are already active in environmental action and social justice, and have a deep well of talent to draw upon from their membership. While operating a business is a pretty hefty endeavor, a lot of churches already run small-scale social service agencies - part-time soup kitchens, homeless shelters, etc. - out of their premises. Why not extend that social justice work while making a profit, too? On top of the fact that operating a weatherization business could be a meaningful act of bearing witness to core convictions on respect for the natural world and alleviating suffering, such an endeavor could help boost membership (by extending the church's voice into the community) and donations (by keeping church members employed).
Weatherization operations won't be a good fit for many progressive churches, and will certainly not be a good fit for smaller progressive organizations or blogs. But it's only one kind of opportunity. The greening of the economy in general, and the signing of the stimulus bill in particular, means that there are now a lot of opportunities to save money through environmental action - and that translates into profitable opportunities for progressive organizations.
Microinvesting and microlending
The progressive movement has demonstrated, repeatedly, that it can raise huge amounts of money with small dollars. For the most part, as I mentioned above, that money goes to Democratic candidates, and it doesn't return to the progressive ecosystem. There's no reason that we have to organize our donations this way. There are ample opportunities to give money to socially beneficial endeavors and in some cases, it's possible to get that money back - even with a good return on investment.
Microlending has become an increasingly popular strategy for alleviating poverty over the past 25 years or so. Grameen Bank, one of the most well-known microlending banks in the world was founded in 1983, and since then, other organizations have joined the bandwagon. The idea is to provide impoverished people with small loans which can be used to launch very small business endeavors, which can, in turn, build wealth that helps the entrepreneur rise out of poverty.
There are numerous ways to get involved with microlending online; Kiva is probably the most well-known. Kiva's lending process is geared towards individuals, but the process could, in principle, be applied to small progressive groups and networks of progressive blog readers. Earlier this month, Kiva released the Kiva API; while the API doesn't seem to make it possible to group together bundles of loans, Kiva's developer wiki encourages developers to create social applications around lending activity, so it's not hard to imagine that an application along these lines might emerge from their network. While progressive group microlending would not really make progressives much richer, it would at least cycle money back to the progressive ecosystem, giving lenders a chance to recover their initial loans and thereby seal up some of the leaks within our donor network.
Related to microlending, but not nearly as mature, is the notion of microinvesting: gathering together large pools of individual investors in order to purchase equity in promising companies, preferably with an environmentally or socially responsible flavor. That is the notion behind GreenFund, a project of the for-profit activism company Virgance. Due to SEC regulations, it's not particularly easy to create a microinvesting project, but Virgance appears to have made some progress on the idea (although they're not releasing many details, won't commit to any launch date beyond "a while" on their website.) If that fund does take shape, then it could become possible for progressive groups to organize micro-investing in green companies, and earn new revenues from dividends or equity sales.
What a progressive economy might look like
The ideas I've posted here are meant, for the most part, to prod progressive organizations to think a bit more creatively about their business plan, and to identify financing mechanisms that extend beyond donations. The list I've posted here is no doubt incomplete, and I hope we get some additional creative thoughts in the comments.
More broadly, these ideas are also meant to encourage us to think of the progressive movement as an ecosystem that is fed by a healthy circulation of money. A movement which is built on voluntary donations, from its core activists to its institutions and outward to favored politicians, is not sustainable. A better model involves, as much as possible, a series of transactions that make progressives wealthier at every step of the way, while reinforcing progressive values. A movement which boosts demand for progressive businesses like Credo Mobile, which provides jobs for members of progressive churches, and which gives progressive groups the opportunity to own equity in profitable and environmentally responsible companies will allow many more progressives to prosper together with their movement.