A portion of the profits will be donated to various charities, but this isn't a non-profit and will have employees with decent salaries. There seems to be a lot of potential for that to be a turn-off for customers. If any of you have had this type of experience, how did you handle the PR? Do you have any advice for someone engaging on this type of an entrepreneurial venture?
I would caution against making the "philanthropic angle as its main appeal," if the only differentiator is that you donate a percentage of your profits to charity. As a customer, that just tells me that you are over-charging me so that you can claim a tax deduction and land some PR.
You should explore how to leverage your philanthropic goals to create a broader conversation about the issue that you are addressing (and I would strongly advise that you focus your philanthropy on an issue that makes sense for your business, not just giving it to "various charities"). If you focus on educating customers about the issue that you address, you also deepen your engagement with them -- and, selfishly, make your products more compelling to people who care about that cause.
One thought: there is also a way to make a more sustainable impact on the world while retaining 100% of your profits. It is a model called Good Returns (pioneered by Soap Hope) in which profits are not donated ... but are invested in microloans that empower low-income entrepreneurs.
Learn more about it here:
(That site includes a TEDx talk delivered by Soap Hope's CEO on the topic)
Best of luck to you!
Answered 6 years ago