In case you’re not familiar, we’ve recently launched a new program called Commissions for a Cause (CFAC). CFAC represents a practical application of the Profit for Good Initiative’s broader mission: transforming profits into impactful charitable contributions. We partner with life insurance sales agents by generating leads for them, and in exchange, they agree to donate a significant portion of the commissions they earn to charities addressing global poverty, disease, and the fight against factory farming. Because the donation comes directly from the agent’s commission, there is no additional cost to the client when they go through our program. We believe this creates a compelling opportunity that we can offer throughout the United States: clients can purchase the same products at the same prices but contribute hundreds or even thousands of dollars to important causes without paying a penny more.
Why Is the Profit for Good Initiative Starting Its Own Profit for Good Business?
This strategic choice raises an important question: Why is the Profit for Good Initiative (PFGI)—an organization intended to support Profit for Good businesses (PFGs) in general—starting its own PFG business that will be the primary focus of our attention and resources for the time being? This approach differs from our prior strategies, and we hope to explain why below.
Previous Directions We Had Been Considering
Originally, our plan was to leverage existing Profit for Good businesses—which you can find on our “Find a Profit for Good” page on our website—and run a marketing campaign under the banner of creating a world where profits serve to end poverty, combat factory farming, and address other social challenges. The idea was to create positive associations, increase sales for these businesses, and inspire philanthropists to explore PFGs as tools for funding charities, resulting in the creation of more PFGs in promising areas. With an identifiable logo for PFGs, entrepreneurs could start businesses in any sector, and people would instantly know that by buying from or working with them, they were helping create a better world.
Another direction we considered was establishing an accelerator or incubator program. We would research and develop business plans for PFGs in areas where they could be maximally competitive and profitable with lower capital costs—“strategic PFGs.” We would then connect these business plans with promising funders and raise seed capital to launch and market these businesses. The notion was that if we could demonstrate the power and profitability of PFGs in favorable contexts, it would spur interest among philanthropists who wish to use PFGs to fuel the causes they care about. It’s one thing for someone to theorize that a business model can achieve significant returns for charities by leveraging the sentiments of consumers, employees, and other economic actors; it’s quite another to provide concrete examples of businesses that use PFG status to gain tremendous market share and profit.
Current Resource Limitations and Fundraising Challenges
To be clear, both a mass-marketing program for PFGs and an incubator/accelerator for strategic PFGs make a lot of sense. However, both programs would require significant resources that PFGI currently does not have. We face several challenges in raising funds:
- Lack of Track Record: Our organization does not yet have a substantial track record. In the nonprofit space, there’s a catch-22: funders often want organizations to demonstrate prior work and impact, but nonprofits sometimes need initial funds to get their programs off the ground and build that track record. Raising the seed funding needed to run a certification and mass-marketing program or an incubator/accelerator would have been challenging without existing evidence of success.
- “Meta” Charity Status: We operate as a “meta” charity, meaning our work supports other charities rather than directly addressing a need like distributing malaria nets or providing shelters. While our mission is impactful, it’s two steps removed from the direct outcomes that typically elicit strong emotional responses from donors. Framing our mission as enabling profits to help end poverty instead of enriching shareholders can help, but it’s still more challenging to raise funds compared to organizations doing direct work.
- New and Untested Theory of Change: Our impact relies on a new, untested theory of change. Funders may be cautious about investing in unproven models without concrete examples of success.
Given these challenges, we realized we needed to start smaller and build interest in this area, as well as our own track record, before attempting larger initiatives. Currently, I, as the CEO, work full-time as an attorney and can dedicate about 20 hours a week to PFGI. Through my own funds, I can support another team member on a part-time basis. We needed to think strategically about how to advance toward a Profit for Good world with the resources we have.
Life Insurance Sales: An Ideal Strategic PFG
Having briefly worked in life insurance sales, I recognized the immense potential for generating substantial revenue if one could secure consistent sales. Agents typically earn a significant portion (40-90%) of the annualized premiums from sales that might take only about an hour to complete. This could mean earning hundreds or thousands of dollars from a single sale, and an agent with a steady flow could generate millions annually.
However, agents often struggle to maintain a consistent flow of sales due to intense competition from thousands of others. By introducing a Profit for Good element, we can create an advantage in this undifferentiated field. We offer clients the opportunity to purchase the same products at the same prices but to direct substantial funding to charities at no additional cost to them. Working with independent life insurance sales agents allows us to provide products from various carriers, ensuring clients receive the policies that best meet their needs at the best prices.
This model is akin to a store offering all the same products as competitors at identical prices but where purchasing from this specific store means making a significant positive impact. In short, why wouldn’t people choose CFAC? They can buy the products they already want, at the same cost, while significantly funding charities.
CFAC and Agent Compensation
Initially, with what we now refer to as CFAC 2.0, we contemplated recruiting a life insurance sales agent whom we would pay a salary plus a bonus in exchange for donating the entirety of their commissions. We believed this would make our offering even more compelling to consumers. However, securing the funding for that salary proved challenging, especially without a track record.
Therefore, we decided to structure CFAC as a lead-generating program where agents agree to donate a percentage of the commissions generated from our leads—currently 40%—in exchange for receiving high-quality leads from us. This CFAC 1.0 model allows us to launch the program with the resources we already have. We believe that a 40% commission donation, at no extra cost to clients, is compelling and provides a strong foundation to potentially expand to CFAC 2.0 in the future.
Building Credibility and Spurring Interest Among Philanthropists
By focusing our efforts on CFAC and achieving significant success in the life insurance sales market, we aim to demonstrate the effectiveness of the Profit for Good model in a real-world context. Our success, combined with strategic messaging about why CFAC succeeded and the potential for expansion into other strategic PFGs, can have several crucial impacts:
- Spur Interest Among Philanthropists: Concrete evidence of CFAC’s success can inspire philanthropists to consider investing in or supporting PFGs as viable and powerful tools for advancing their cause areas. Seeing a practical example of a PFG thriving and generating substantial funds for charity can shift perceptions and encourage investment in similar ventures.
- Build Credibility and a Track Record: Demonstrated success in the market builds our organization’s credibility. It shows that our theory of change is not just theoretical but can deliver tangible results. This credibility is essential for attracting future funding, partnerships, and support for larger initiatives like mass-marketing campaigns or accelerator programs.
- Pave the Way for Expansion into Other Strategic PFGs: Success with CFAC can serve as a blueprint for launching other strategic PFGs in different sectors. By analyzing and communicating the factors that contributed to CFAC’s success, we can identify other industries where the PFG model can offer a competitive advantage, high profitability, and scalability with low capital requirements.
- Strengthen Our Messaging and Advocacy Efforts: With a successful case study in hand, our messaging about the potential and effectiveness of PFGs becomes much more persuasive. We can leverage CFAC’s success to advocate for the wider adoption of the Profit for Good model across various industries.
Conclusion
Launching Commissions for a Cause is a strategic move that allows us to work within our current resource limitations while building a track record of success. By demonstrating that the Profit for Good model can thrive in the life insurance sales market, we position ourselves to inspire interest from philanthropists, build crucial credibility, and pave the way for expanding into other strategic PFGs. This approach enables us to make meaningful progress toward our vision of a world where profits serve to end poverty, combat factory farming, and address other social challenges.
We believe that by starting with CFAC, we can create a ripple effect that not only amplifies our impact but also validates the Profit for Good model as a powerful tool for social change.
