NON-PROFITS AND CONFLICTS OF INTEREST

First let me provide a recap of where we are on the project. We finally began writing the prospectus for the investment fund, and during a meeting today I cautioned our client that my colleague and I were in many ways working in a vacuum and we were designing the fund on our own without the level of organizational participation that would be ideal. After she responded, it became clear that the entire time we were acting like consultants, rather than investment bankers. Consultants typically want to ask questions, gain consensus and build the right thing from the start. Bankers are more transactional, and less concerned about marketing the fund, administering the fund, and the long term performance of the fund. Still, given the choice, I’d much rather be a consultant than an investment banker (never thought I’d say that in a hurry!)

Okay, on to another issue that came up in some informal discussion. When discussing the figures behind a business case, it was clear that there is a diverse view between the non-profit’s head office, and the regional leadership. This is not uncharacteristic, but I found it interesting to highlight here.

The issue lies with the non-profit partnering with an airline. After every online ticket purchase, the airline asks if you would like to make a contribution to the non-profit. If you elect yes, it gets added on your bill, and the non-profit realizes the gain in funds. It’s cleverly put together, and the pitch for funds on the airlines website is directly linked to a conservation project – that is to say, the airline asks “would you like to donate X pesos to help conserve the biodiversity in x,y,z swampland”. The description is actually more prescriptive, but you get the idea. Most of the money goes directly to the conservation effort, and 30% of the donation is termed as “unrestricted”, meaning it can be used for anything other than the conservation (such as marketing, or paying salaries, etc).

Here’s the catch: The global headquarters in Switzerland frowns upon doing business with airlines. In truth, from an environmental perspective, the only thing worse than setting a forest on fire is flying. Here’s where the divergent view comes in: while the local office recognizes that flying contributes to pollution, they are realistic in the fact that there is no viable alternative to flying. Additionally, they partner with corporations to help them reduce their carbon footprints. So while the airline may be a huge polluter, if the region can help them use paper cups on every flight instead of plastic cups, that’s seen as a win. I have to say that I side with the regional offices in this instance, but it does make you pause when it comes to these gray areas. Other companies, however, are still bad business (tobacco companies is everyone’s favorite example). Another example of the regional offices working with unlikely companies is with fishing companies. The organization works to teach them to fish in smarter ways, using more appropriate hooks that don’t harm dolphins, etc. Incidentally, the non-profit does not seek donations from corporations it consults to (so as to avoid a conflict of interest). This one is pretty self explainatory: If I give you a better carbon report, you'll donate more, or vice versa - If I give you a horrible carbon report, you're more likely to solicit more of my services to figure out how you can be a better corporate citizen. Interesting stuff indeed.