Doing the Most Good Means Smart Economics

There’s an old saying that goes something along the lines of, “When life gets good, throw a party” and that seems to be a mentality that translates to business today. Mainly the web business, if we’re talking about literal parties. No good web conference, un-conference or social-media laden city goes without parties of some sort. Here in DC, we have TechCocktail, the Twin Tech parties, etc. Anything to get people together and drink a little bit over business cards.

In the more figurative sense, we have people like Geoff Livingston, who suggest that social causes is a great place to drop your money. And to a degree, he is right. Whenever there is a crossover between means and opportunity, then action is mandated.

The lack of means, at this time when companies are trying to pipeline enough business and extend runway to survive 18 months, and employees are losing their job because the company can’t pipeline those funds, creates a situation where business owners need to take stock of options.

While social causes are always good, the return on investment is a giant question mark. Social causes can create huge bang, attract all kinds of positive publicity, vibe and reputations as Geoff suggests. Or it could simply have no effect at all, and thousands of dollars could be squandered on social cause.

Unless of course, social cause is the ultimate goal, smart operatives are looking at their economic scenario and becoming as efficient as possible. That means, investing in developers, or marketers. That means, hiring a high priced VP to replace 3 low-level managers to save salary cap. That means, pounding the pavement for more business even if it means having to travel a little more. These are optimizations companies go through to secure their future, when times are uncertain.

Certainly, if you have plenty of cash in hand and you’re looking for long-term investment opportunities, social causes gets you there. However, survival of the fittest dictates that sometimes you have to make the short term 3-yard scramble, over the longer 20-yard slot pass because the chance of success is greater. It’s a numbers game.

3 Replies to “Doing the Most Good Means Smart Economics”

  1. I like it Aaron. Every now and then it’s good to loosen up the defense by going deep. Loosens the arm and shakes out the bugs. Then you can get back to the grind it out gains. Always making your competition wonder whether you might go big.

    The long bomb is sometimes good for morale in tough times as well.

  2. I dunno, sometimes it seems like businesses can get a bit myopic when they narrowly focus on counting beans. 65% of American consumers say they would change to brands associated witha good cause if price and quality were equal and more than 60 million people are willing to pay a premium for socially and environmentally responsible products.

    I agree that the ROI is not that easy to measure, but it doesn’t have to cost a lot of cash, or be an elaborate undertaking to forge strong relationships with the right nonprofits. Tapping into an emotionally connected constituency is a dynamic way to greatly expand your reach. Once that happens, then it’s up to the business to do the normal things it should be doing anyway to turn prospects into customers.

    The key is having the right game plan, intense focus, and proper execution. And, whether by 3’s or 20’s, to get in the end zone as many times as possible.

  3. Aaron,

    You just reminded me of an occurrence in Las Vegas in the wake of 9-11. MGM Grand immediately stepped up and made a $1 million donation to relief efforts.

    About a week or two later, they laid off several thousand employees. While the money was from two different budgets, the public backlash was fierce. It became even worse when they had to ask for the donation back (or risk more layoffs).

    I think Geoff’s idea is simple enough. Instead of purchasing gifts, he’s making donations in other people’s names (I had a client that used to buy me a tree in the rain forrest every year). So, it’s reallocation and well meant.

    While there are some theoretical question marks associated with these types of giving programs, they still help. Still, I like your post because it reminds people that giving is best when you can keep yourself healthy. Or, in my example, you don’t want to lay people off because you were out doing good for someone else.


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