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Untapped opportunities for innovative entrepreneurs in the non-profit sector

There is a massive opportunity to disrupt the market for nature conservation. I wrote about this a while back in a piece called “Wanted: disruptive entrepreneurs for conservation”.

Recently, three separate events occurred in quick succession that highlighted this largely untapped potential:

  1. A family member emailed me to enquire about the best mechanism for him to voluntarily offset his family’s carbon emissions, frustrated by a lack of solution for a retail consumer like himself;
  2. A friend who works in a small tech start-up asked me how his company, which is finally starting to generate a small profit, could donate some of that directly to local “on-the-ground environmental or ecosystems projects” to benefit wildlife;
  3. After reading the Luc Hoffmann Institute analysis on ‘Diversifying local livelihoods while sustaining wildlife’, an African entrepreneur with a significant track record in forestry and energy management presented a business project to link, via a mobile platform, small carbon emitters with the local owners of well managed land to offset these directly.

 

What do these three events have in common? They point to a global and potentially massive market for the conservation of nature: directly linking those willing to pay for nature with the local communities that choose to conserve it, bypassing traditional intermediaries.

This market is growing for the farsighted and courageous innovators out there.

Up to now, there have been a number of efforts at making nature conservation competitive with other forms of economic activity. These include, among others, efforts at “going beyond GDP”, economic internalisation of externalities, or business assessment of triple bottom lines.

Yet there are real problems with these approaches. For one, they are complicated. They are also highly theoretical, unless there is a coercive rule, such as a regulation or law, to enforce their application. For another, they are value-laden. How much are animals such as tigers and lions worth? To whom? Finally, there is deep moral hazard to this approach. After all, if nature is given a price, it is easy to imagine that it could ultimately be bought with impunity by the richest 1%, not necessarily to the advantage of the global commons and local communities.

In light of the three recent events I mentioned above, among others, another far simpler approach became more evident: people are inherently willing to pay to keep (or even regenerate) nature, wildlife and ecosystems for no financial return at all. In other words, people want to conserve nature for its own sake, and are willing to pay for this. Not to buy it. Not to own it. Not to sell it. Not to profit from it. Only to do good. In this case, to ensure nature lives on for future generations while supporting local communities.

One indicator of this greater willingness is how much people (and taxpayers) give to conservation NGOs. A quick, non-rigorous survey of the main environmental NGOs’ annual reports points to a massive market, with more than USD 5 billion in donations annually. Donations include for example those from individuals, large grants by foundations, legacy giving, or public and private sector giving. A broader survey of all the giving, corporate social responsibility, government spending and the like which expect no direct financial return, would add significantly to this number.

This market for nature conservation also has significant growth potential. Research shows that the millennial generation is more likely to value impact than the previous baby-boomer generation. More millennials are willing to give to charity than their parents. Millennials are also set to cumulatively inherit a USD 30 to 68 trillion fortune (depending on the estimates) in the coming years in what is deemed the greatest wealth transfer in history. Yet the new generation also seeks transparency and direct, hands-on experience.

Tapping into this new kind of demand is an important opportunity for innovative entrepreneurs. Who can think of new business models that connect those willing to pay to conserve ecosystems and wildlife for no financial return, directly with those local communities who will make the economic choices that make most sense to them? The commodity being consumed is, simply, feeling good about doing good. Technology allows this. Social networks can amplify it.

We can save the natural world if we value it. What is really needed are new approaches and models to package the value of doing good in a convenient way for the new generation to buy into.

 

At the Luc Hoffmann Institute, we are looking to spur innovative business models for life on Earth. If you are working on this and want to link up ideas and networks, we’d like to be in touch. Email me at adellecker@wwfint.org.

Luc Hoffmann InstituteUntapped opportunities for innovative entrepreneurs in the non-profit sector