Each year, an estimated 46 percent of the population is responsible for 77 percent of discretionary spending in the United States. To strengthen individual buying power, a Santa Barbara-based entrepreneur and philanthropist has proposed a new social enterprise to finance climate change solutions, among other social justice and humanitarian issues.
The Big Idea, a nonprofit corporation founded by the entrepreneur Chris Norton and initially backed by his $11 million donation, is loosely modeled after the A.A.R.P., the membership organization that promotes the interests of retired people. The aim is to unify individuals with common interests.
Acting as a green intermediary, The Big Idea bundles purchases of regular services like like cellphone plans and auto insurance ? what Mr. Norton calls ?low-engagement? products? ? to achieve social impact. By harnessing group buying power, members achieve a cost savings and share it with social justice and environmental action groups like the Natural Resources Defense Council, Environmental Defense Fund and 350.org, among others.
The Big Idea doesn?t plan to measure direct benefits to the environment. Contributions will be made to environmental action groups and social justice groups that size up their own success at meeting their strategic goals.
Mr. Norton, a Santa Barbara, Calif.-based executive and the co-author of an e-book titled ?113 Million Markets of One,? said that individuals may want to wield their economic power to help solve social issues but don?t have a mechanism to do so as a group. Most don?t take the time to do due diligence themselves, he said, especially on their regular ?service? purchases.
?The Big Idea has the ethics of Patagonia, scalability of Facebook, and buying power of Costco,? Mr. Norton said. With grass-roots buying power, they can support companies that ?pay a living wage to employees, take care of the environment and pay taxes in the U.S.,? he said. The group can also help consumers foster environmental solutions through purchases that are not ordinarily associated with the environment.
Is all of this feasible?
Americus Reed, a professor of marketing at the Wharton School, said that social impact branding is a popular topic in marketing these days, especially among start-ups seeking to leverage the idea that consumers can do something for the collective good. He cites Warby Parker, a company that sells designer eyeglasses and donates a certain amount of money to purchase glasses for people in poor countries.
?As a way to differentiate your company right now, social impact branding is a hot branding approach,? Dr. Reed said.
Yet as more and more companies develop a social brand, consumers will become desensitized and the tactic will prove less effective, he predicts.
?By the time you hear about the 15th company doing something like this, then sometimes consumers will have a skeptical reaction,? he said. ? ?It?s just a marketing gimmick,? they?ll say, as opposed to being an authentic DNA of the company. So that?s a big challenge for sustaining this kind of branding over time.?
Often consumers doubt that their individual choices will make a difference. ?In the tragedy of the commons, everyone assumes everyone else is going to help, and no one ends up helping,? Dr. Reed said. In addition, he said consumers have much opportunity with social media to do the philanthropic giving themselves.
Yet a word-of-mouth, groundswell approach might help change consumer thinking around something so tedious as paying a phone bill, he said, if The Big Idea can counter the inertia.
?It?s going to be a huge challenge,? he said.
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