2012-06-27

Co.Exist

Purchasing Power Is Social Impact Power

Instead of focusing on activism or government, communities can find power and effect change through their collective business decisions.

We’re at a moment of crisis in the United States. Communities—especially low-income neighborhoods—are no longer being meaningfully engaged by the global economy, income inequality has never been higher, and our expulsion of finite fossil fuels into the atmosphere has us all on a crash course for disaster.

And, despite the conventional cynicism, people grasp these problems, and they’re trying to fix them like never before, taking action to improve their own lives and those of the people around them. Volunteerism is up, students now choose colleges based on social impact and service programs, individual charitable contributions have remained remarkably steady despite a global financial crisis.

Yet civically minded citizens have limited options: call your congressman, join a one-off protest action, donate to our advocacy organization. Too often, the options posed don’t translate into tangible benefits for one’s own community.

I believe people and communities have a more powerful tool for creating social benefits they care about, one that requires no sacrifice but instead aligns with their own economic interest as consumers: collective purchasing power.
New startups like GroupOn and Living Social have made lots of money around this concept, aggregating consumer demand in order to secure daily deals for gleeful consumers. Yet these firms have missed a huge new opportunity. By pooling their purchasing power, people and communities can do more than gain access to services they want at lower cost; they can unlock the ability of business—and I believe, whole market sectors—to be drivers of social good.

Its time for the social sector to move beyond the us-versus-them, zero sum approach of shaking its fist at corporations whose drive to maximize profits has come at the expense of communities. With purchasing power, we can help business leaders to deliver social benefits while also meeting their bottom line, creating local markets that reward those who do. People, given a path that does not set them back economically, will make choices as consumers that do good for their world. And, just as important, business leaders will as well.

The social sector has focused for years on government as its mechanism for change, but it’s business that has the biggest potential impacts on the social and environmental crises of our time. Purchasing power is social impact power.

We founded our organization, Groundswell, to answer one question: How can we jumpstart a new, clean economy that truly lifts up those who need it most? Before Groundswell, I, like others on our team, had just been transformed by the experience of working in communities across the country on President Obama’s 2008 campaign. As a part of the grassroots, peer-to-peer engagement effort that brought an estimated one million new people into the voting process across the United States, we saw the sweeping change that could be achieved through empowered community leadership. Our founding team was convinced that this same bottom-up approach, so effective in the political sphere, could be used to help grow the market power of communities as well.

Over our first year—working first out of a homeless shelter and then packing ourselves into the attic loft of another, very patient, organization—we honed our model for community driven economic transformation. We started with energy efficiency, tapping into community networks to grow demand for home efficiency projects, creating energy savings, growing local small businesses and creating accessible new jobs.

Soon we were working with membership groups on larger projects, not just in energy efficiency, but also in clean power, building our impact across the mid-Atlantic region. We’re now on route to scaling our impacts across the country, all by channeling the latent purchasing power of communities. Most recently, working with Metro-IAF, a community organizing group, and other grassroots partners, we brought together over 100 nonprofits across the mid-Atlantic around a $5 million clean electricity project. By helping these groups to collectively seek electricity, we created the leverage they needed to reduce their energy costs and shift to clean electricity, while also cycling new savings back into community programs.

A closer look at this project reveals how everyone gains from civic consumption: customers, the broader community, and business:

  • Purchasing organizations reduce their energy costs, gain stronger consumer protections, and switch to cleaner power.
  • The community benefits from more resilient social impact organizations, more sustainable energy consumption, and re-investment of savings in local programs.
  • Energy providers gain access to a new community-level market for clean power, as well as recognition for delivery of community benefits through their business.

While new energy sectors have been at the center of Groundswell’s focus, civic consumption has the potential for transformative change across a wide range of market sectors. In fact, it’s already happening. Take Kyle Zimmer, an inspiration of mine.

Zimmer began her organization, First Book, around the mission of promoting literacy by improving access to books. After learning that many low-income school districts across the United States were simply unable to afford books for their libraries, she created a platform for them use collective purchasing to gain access to books at low, or even no cost. Soon, her impact went deeper than access to books. Her work began changing the product itself: with demand, publishers began prioritizing books that were more culturally relevant to the students of these schools. And why shouldn’t they? Doing the right thing had become good business.

It is time we turn the page on an approach to "the economy" under which communities are passive recipients, relegated to react to its ups and downs. We have the opportunity to restore communities into their rightful place as shapers of the economy they want to live in. By making every purchase a civic opportunity, we can put communities back behind the wheel of their own economic destiny.

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1 Comments

  • p_bruner

    Couldn't agree with you more Will. US states could learn from Nova Scotia's example of putting into place a community Feed-in Tariff (COMFIT) to support local co-ownership of renewables projects.

    Our business is busy putting this theory into practice in the UK:

    scenetwork.co.uk