Why we are for Profit

Why we are for Profit

Hi it’s Tink here from Project Everest and
what I’m going to cover in this video is Why we are for profit. So I’m going to go through quickly the background,
the reasons behind it, why we do this methodology and what this ultimately means for the longer
term and bigger picture. I’m going to start out with charity and
the reason we don’t go down this path and being not for profit is the simple and main
reason – a problem that charities face and that is, if you give a dollar to charity,
the metric of how a charity is judged is how much that percentage of that dollar goes to
the cause and that is something that is highly defined, everyone understands that and knows
it. A good charity and an amazing charity will
be a 70% plus, given they have got to do marketing to get donations which is their key operations
and the other thing is their ops – so actually delivering on projects. Now those two generally make up a high percentage,
usually about 20% each but with this metric the key thing is by definition it squeezes
the main thing in the business and that is, income. So the income that you can pay to your staff. With an inherent pressure on income, ultimately
the Government even understands this and provides $33000 tax relief per year to people who work
in non for profits in the charity sector because they understand that naturally charities are
squeezed for income. So let’s look at social enterprises, so
the ones like Thank you water. I’m going to you use Thank you water as
an example. We love Thank you water, it’s a great company
they do something that is ultimately something that people understand and get as a social
enterprise. They sell bottled water in Australia. That product is not socially beneficial but
they use the profits from that to fund projects overseas and make their improvement through
that way. Ultimately they came under the same problems
that charity is – they get judged on how much of the dollars goes to the projects that they
create. So once again they are inherently squeezed
on income as well. You see this on the founders of Thank you
water. Whilst I don’t know their personal situation
what I do see them doing a lot of is speaking and creating books etc. which is ultimately
where they are making a lot of their money from personally, where they can justify what
they are doing in the business. So what we see in these businesses, when they
are in their 20s people are very happy to work in these charities, basically because
they believe they are working for the cause and thats a really good thing and they put
their heart and soul into it and that’s great. However, when they get to their 30s what we
see in terms of research is a whole lot of people needing to leave charities. When you hit your 30s you need to have a family
and think about doing things like buying a house. In Sydney even on a normal income that is
very difficult. Schooling fees, all those kind of things around
a family and no longer can people work in charities and so when they become their most
productive ultimately they need to leave to do other things. We see this all the time. So this is the issue around charities and
current models of social enterprise, so if nothing changes, nothing changes. That is why we are openly for profit. We believe in servicing the 4 billion that
live on less than $5 a day through socially beneficial products and services. That means the social benefit is in the product
or service itself and we seek to make profit out of that so that we can actually pay our
people, attract and retain A players and on a bigger picture, bring a whole lot more people
into this industry. Theres classic examples like Greenway Stoves
in India, who make a simple stove that is socially beneficial in the product. They made $1 million of revenue in their first
year and they carry on being a successful business. We will have more examples like that so that
we can attract people from Australia who are talented or from any Western country to go
and work in this sector and make money out of it and help get the 4 billion who earning
less than $5 a day to a situation of parity with Western countries. If nothing changes, nothing changes. So what I want to show you in this video are
the current flaws in the charity social enterprise model squeezes income. We are for profit and we put the social benefit
in the product and services itself and we seek to attract more people in this industry
and this area so that they can create the futures that they require and want to get
to. Thank you.

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