The meeting room at the Hol-iday Inn is filled with the slightly stale scent of perfume and the kind of folks who are the backbone of traditional American charity -- in this case, middle-aged, predominantly female do-gooders, deliverers of meals to elderly shut-ins, mentors to troubled youngsters. Faultless in their dedication, they are inheritors of a distinctly American history of civic engagement.
But at the moment, they are baffled by what they're hearing.
"Charity is not going to be enough to solve our social problems," the man at the lectern is telling them. "Redistributing wealth is not going to be enough." Huh? you can almost hear people thinking. How do you help the needy without asking people for money?
Billy Shore seems to sense that his audience isn't entirely with him, but he presses on. Stop expecting donations simply because your cause is noble, he says. You have valuable, and sellable, assets -- expertise, networks of volunteers, long experience in helping people. Stop thinking of how to get donations; start thinking of how to market assets. You can create your own wealth, enough to effect social change on a vast new scale -- lasting, radical social change. And that is a task worth devoting a lifetime to, he says, a goal as lofty as building a cathedral.
For a moment, everyone just looks at the lectern. Then an older woman stands up: "What did you say the name of your organization was?" There is an embarrassed ruffle through the crowd, but Shore is a pro and he does not let even a trace of discomfiture cross his face. "The organization I founded with my sister, Debbie Shore, in 1984 is called Share Our Strength," he says cheerfully, "and we now have a for-profit subsidiary called Community Wealth Ventures."
The next query goes right to the point: "How can nonprofits do what you're suggesting and not abandon their mission?"
"That's a good question," Shore says, as if he's never heard it before. "What you're asking is how do we do this without compromising our values or selling our soul. And I think what you have to do is to view it as a means to an end. Is thinking this way a distraction? Well, maybe. Is it as distracting as spending six weeks of the year talking on the phone to people to get them to come to a fund-raising dinner they don't really want to come to in the first place?" This rhetorical question scores a point. He hasn't won them over yet, though -- but now, in the back of the room, somebody else is standing.
"Would you be interested in consulting with our organization, to teach us how to do this?"
William Shore (everyone calls him Billy) came to Washington in 1977 the way many people do: with the idea of becoming a player in the system. Politics was his passion, and the capital was the center of the universe for a young man with the unspoken ambition of changing the world -- or, more precisely, wielding behind-the-scenes influence with the people who would. "I was versed in the biographies of young men -- from John Hay in the Lincoln administration to Ted Sorensen in John Kennedy's -- who had come to Washington as intimates to new presidents and in their service earned the trust of Congress, negotiated with foreign leaders, and changed the course of history," Shore would write later in his first book, Revolution of the Heart. "I aspired to be an heir to that grand tradition."
For a while in the 1980s, it looked as if he might make it -- as adviser and campaign strategist for then-Sen. Gary Hart of Colorado, at one point the favorite to win the Democratic nomination for president. But as he stood backstage at countless campaign rallies, Shore could not shake the growing sense that if politics was the fuel that ran the great engine of democracy, that engine was beginning to resemble a gas-guzzling limousine -- slow, inefficient and useful only to the rich. And another thought began to demand consideration: Politics was never going to change the world. He would have to go another way.
So he set out to do just that -- by helping to harness the selfish energy of free-market capitalism to help charities to do what they do: feed the hungry, create homes for the homeless and give a voice to the unheard. This blurring of the line between corporate America and nonprofit social activism is not a concept Shore claims to have originated. It is, however, an idea for which Shore in the last 10 years has become the most visible national spokesman.
In this era of gaudy affluence and Silicon Valley billionaires, businesses have discovered that displaying a social conscience can be a useful marketing tool. Use your Visa card to buy groceries, for example, and Visa will give a percentage of your purchase price to hot meals for the elderly; buy a pound of coffee at Starbucks, and a few pennies will go to help impoverished coffee farmers in South America; use Working Assets long-distance service, and 1 percent of your monthly bill will be paid to a human rights group or another nonprofit of your choice.
At the same time, nonprofits have come to see that in the current atmosphere, in which the federal government is trimming its social safety net and private donations to charity have mostly stagnated, they can no longer ignore the grubby necessity of making money.
At the intersection of these two trends stands Billy Shore. By transplanting his political skills to the nonprofit world, he has so far managed to make $50 million for anti-hunger groups, mainly through marketing partnerships between Share Our Strength and various big corporations. Now, he says, he is embarked on an even bigger project -- creating a new sector of the economy composed of profit-making businesses whose sole purpose is doing good.
Shore proposes to do this by showing nonprofits that they can make money -- lots of money potentially -- by selling things none of them understood they had: their good names, their expertise at solving difficult social problems, their ability to organize and train untapped labor pools, their artistic talents, even their access to
inner-city youth markets. The money they can make off these "community wealth enterprises," as Shores calls them, can then be funneled back into the charities' original mission of feeding, clothing and training the poor, or into promoting social change. In this way, Shore says, nonprofits can stop fighting among themselves for the crumbs of leftover wealth from a booming economy, and start creating some wealth of their own.
This is not just some ivory tower theory. Today, more than 80 percent of Share Our Strength's operating budget is generated from corporate partnerships and licensing arrangements. One of those partnerships produced the most successful cause-related marketing venture up to then, the Charge Against Hunger television campaign sponsored by American Express.
Two and a half years ago, SOS spun off the for-profit Community Wealth Ventures, whose business is selling SOS's know-how in creating marketing partnerships. Community Wealth Ventures has offices in Washington and New York, roughly 20 clients -- Goodwill Industries among them -- and this year made a profit of $44,000, most of which SOS donated to anti-hunger programs. Its method of coupling business and charity to help both is now a part of the curriculum for fledgling entrepreneurs at Stanford's and Harvard's business schools.
The idea of charities making their own money sounds obvious at first. Haven't there always been bake sales and thrift stores? But Shore's community wealth idea is much grander -- and much more controversial. Thrift stores and bake sales deal in leftovers and castoffs -- donated clothes, donated cookies, donated time. What Shore and other pioneers of this concept -- San Francisco nonprofit guru Jed Emerson, the Conservation Company's John Riggan, the Institute for Social Entrepreneurs' Jerr Boschee -- are talking about is a hybrid, a nonprofit run for profit. "Nonprofit," he likes to say, "is a tax status, not a marketing philosophy."
Yet in the philanthropic world, where many see their work as almost a religious calling, there's a feeling that getting in bed with business in any form is heresy. For a charity to make a profit would be tantamount to selling its soul.
At a speech Shore gave recently in New York City, one woman from a Manhattan food kitchen rose to decry the fact that food banks and anti-hunger efforts needed to exist at all -- much less that people like Billy Shore were proposing to create a new, even better, institutional framework for them. "Emergency food assistance is subsidizing inadequate wages," she lectured Shore. "It's an insult that in this country there even has to be a network like ours."
"She's absolutely right," Shore says later. Right -- but misses his point. Raising the minimum wage substantially would be good, and so would reforming the health care system; that's just not likely to happen any time soon. And that's not what he's doing right now.
Which is this: meeting with the three New York employees of Community Wealth Ventures at their West 35th Street office to assess the status of work CWV has been doing for several nonprofit clients -- a New Jersey youth club, a children's television show and a health care group that provides technical assistance to clinics that serve patients who have AIDS or are HIV-positive.
Sarah Perry, the 31-year-old senior vice president of the New York office, tells Shore that the last client is now struggling with an increasingly common problem: what do with the money its new for-profit subsidiary is starting to make. The health care organization's board of directors is fighting over whether to route some of that money to better salaries for those working in the for-profit side, or to funnel it all into more services for patients on the nonprofit side.
"It's a classic culture clash," she tells Shore, who advises her to go back to the client and emphasize the importance of not killing the goose they hope will lay the golden egg, meaning raise salaries for those working in the for-profit subsidiary. "Otherwise," says Shore, who makes just under $120,000 a year, "you take away all the incentive from the profit-making entity. There have to be really strong incentives."
In the world of charities, where "low overhead" has always been synonymous with "noble purpose," this is heresy. Traditional charity do-gooders are certain that Shore's history of political pragmatism is about to pollute the world and work of nonprofits. And in a way they're right.
There is a picture, taken by a news photographer on the presidential campaign trail in 1984, showing an enthusiastic California crowd surrounding Gary Hart during his first presidential race. Tall and Lincolnesque, Hart is plunging into a sea of outstretched hands. It is only after the viewer gazes for a moment at this scene of happy mayhem that he notices the intense young man sitting behind Hart -- on a car hood, perhaps, it's hard to tell -- carrying a clipboard and keeping an eye on things. The young man is Billy Shore. That was his job in those days, as Hart's political director, campaign strategist and principal lieutenant, and that season of his life was the pinnacle of everything he had ever, up to then, dreamed of being.
It was natural, really. His father, Nate Shore, had for 22 years run the Pittsburgh office of a Democratic congressman, in the process bequeathing to his children a belief in activist government, in helping people. Through politics, he taught his children, you could make the world a better place.
In high school, Shore discovered Gary Hart, reading in Newsweek about the lanky young man in jeans running Democrat George McGovern's 1972 presidential campaign, and decided he was the man to watch. Years later, while earning a law degree at George Washington Law School at night, Shore took a volunteer job on Capitol Hill -- opening the mail for Hart. For the first few months he worked for free. But in less than a decade, Shore had moved from unpaid mail clerk to senior adviser.
"He migrated up the ladder rather quickly from clerical to policy to politics, and he was more or less my right-hand man in 1984," says Hart, who now practices law in Denver. "He kind of grew up in the process." But, Hart adds, his former protege was unusual in Washington, like "the last dinosaur, in the sense that he came to Washington believing not in the politics of power, but the politics of justice . . . If you wanted to change things, you came to Washington and you passed laws and you cured the illnesses of society. He walked into that stream at a time when the stream was being diverted."
In the process Shore became Hart's most trusted confidant. He was the first person Hart turned to late one Saturday night in May 1987. Shore was at home in Denver, where the Hart presidential campaign was based, reading, when the telephone rang at about 10 p.m. Hart's voice sounded uncharacteristically high-pitched and nervous, and his request was cryptic. He was at home in Washington and there were some other people there and some reporters from the Miami Herald were outside asking questions. Could Shore get in touch with campaign manager Bill Dixon and do something about it? Do what? Shore wondered, but he said he would call Dixon. Dixon's line was busy, so Shore went back to his book intending to try again in a few minutes. Before he could, Hart called back, sounding more nervous and insistent.
"Who's there?" Shore remembers asking, and Hart said his friend Billy Broadhurst. Broadhurst was a wealthy Louisiana businessman, a good ol' boy who had become one of those peripheral characters every campaign seems to collect, someone eager to get close to the charismatic candidate. The day before, when he had been with Hart somewhere in Iowa, Shore remembered, he had handed Hart a note from Broadhurst, asking him to call. It was an open secret that Hart had a history of womanizing, and when Shore handed over the note "I knew exactly what Billy was doing," he said. "I heard Gary on the phone saying, `That's not a good idea this weekend,' and I thought, `Good for you.' "
Now, hearing Hart speaking from the same room as Broadhurst, Shore had the sickening realization that he had, after all, delivered to Hart the seeds of his destruction. "Anybody else there?" Shore asked. Two other people, said Hart. "Are they women?" Yes, Hart said. And right then, in his gut, Shore knew Hart's presidential campaign was dead.
There have been two times in his life when he cried himself to sleep, Shore says. One was after his mother died, and the other was when Gary Hart got caught by the Miami Herald with a woman he wasn't married to in his Washington town house and was forced to leave politics by the resulting public outcry. And yet, speaking of it 12 years later, Shore does not seem even residually bitter. He cried at the time, he says, because "I just felt heartbroken for everybody. It was just sad. I had invested a lot in this particular dream."
Did he feel betrayed or angry? "I never got angry at him. I just felt like it was so stupid -- but I have a lot of friends who have done really stupid things. He just happened to be more prominent." Shore's loyalty has never wavered. "Hart may no longer be a politically fashionable role model," he wrote years later, "but the lessons I learned by his side were good ones that stuck with me."
The day after Hart dropped out of the race with a press corps camped on the sidewalk outside his Denver law office, he called Shore at home and suggested that Shore drop by, that maybe they could go somewhere for lunch.
"I realized he just didn't want to have to walk down the street alone," Shore says now. For the next three months, while Hart was showing up at his law firm for the sake of appearances every day and Shore was in debt and unemployed, the two had lunch together regularly. "We did this every day for a while and then he'd start saying things like, `You wanna go to a bookstore before lunch?' or `You wanna take in a movie after lunch?' It was crazy. He's getting paid by the law firm no matter what he does, and I'm going down the tubes. I have no job, and I'm really going to have to hustle to make a living with SOS. Finally, I just said, `I gotta move back to D.C.' "
In the world Shore used to inhabit, the Gary Hart debacle is frequently talked of -- by political insiders and journalists -- as if Shore were the political equivalent of the apostle Paul on his way to Damascus -- a man blinded by the bright light of the truth, whose life changed fundamentally and forever in a moment, converting him from political junky to charity do-gooder. In fact, Shore's efforts to remold charity through Share Our Strength were already three years old by then. Hart would make one more abortive and humiliating run for the White House, with Shore coaching unofficially from the sidelines, and it would be another five years and still another presidential campaign -- Bob Kerrey's -- before Shore would leave politics for good.
"A lot of people make that mistake about Billy -- `Oh, isn't that nice, he left politics and now he's doing volunteer work,' " says former Clinton spokesman Mike McCurry. "No. Share Our Strength is what Billy does. He was just volunteering in politics."
Later, when McCurry's last sentence is repeated to Shore, he laughs. Then he stops. "What do you think Mike meant by that?" he asks. For just a moment, Billy Shore -- former confidant of the powerful and wielder of behind-the-scenes influence -- worries that one of his old colleagues never took him seriously.
It's actually the opposite. McCurry likes to poke fun at "those who worship at the shrine of Billy Shore" -- and there is something almost cultlike in the personal devotion Shore has inspired, especially among the corporate moguls he has introduced to the world of do-goodism. But McCurry acknowledges that he himself sort of genuflects at the shrine. "I've always thought of him as a role model -- an example that you could live the life of a political operative and still have some sense of ethics and values that was greater than the next campaign," McCurry says.
Shore himself passes off his motivation as simple self-interest. "This doesn't feel altruistic to me," he says. "I basically feel people are motivated to get up every day and do what makes them feel good, and this makes me feel good."
But a clue to a more complete answer lies in something he wrote in his first book: "If your vision is based on a deep-seated need of your own, you will not fail. Your need will not let you."
So, what is Shore's need?
The answer comes by e-mail, written from the study of Shore's Silver Spring home one evening after midnight, after his wife, Bonnie, and their two children are in bed and the dogs have been taken for a late-night walk. It is the need for peace of mind. "I'm always surprised when I realize that the suffering that exists in the world does not impair . . . the way [everyone] experiences his own life," he writes. "It does mine."
Fortunately for him, Shore is one of those people for whom the path to inner peace and the path to intellectual fulfillment are one and the same; he enjoys figuring out what can be done. "I'm not sure [the need to make a difference] is stronger in me than in anyone else," he writes, "but I do suspect I have a greater sense of the possibilities."
In the beginning, those possibilities were of a straightforward charitable nature; generating money that would be used to feed the hungry is a goal with which few would take issue. Now his vision is more ambitious -- and he must convince people inside and outside the world of charitable nonprofits that he is offering a viable way of making a difference. "I try," he says, "to get people to see that something is in their own interest."
In other words -- politics.
Few people noticed it at the time, but beginning in the mid-1980s, the separation between nonprofit and for-profit entities began to break down. Partly this was a result of marketing forces, partly a result of a change in the political climate. In the Reagan era, with social programs coming under assault, nonprofits were finding their services more in demand than ever. But the pool of donors and government grants wasn't getting any bigger. Meanwhile, downsizing at corporations was fueling wild fluctuations in charitable giving as middle- and upper-middle-class employees grew concerned about their own futures.
Changes in the tax code in 1986 had effectively ruled out the charitable-giving deduction for taxpayers who didn't itemize their federal income taxes. And by the early 1990s there was growing public skepticism about how charitable contributions were being used, spurred in part by the 1992 scandal when then-United Way head William Aramony was caught using charitable donations to pay travel expenses for his girlfriends and fund a lavish personal lifestyle.
The trend has continued even amid the booming stock market of recent years; the percentage of households in this country contributing to charity actually fell slightly from 1987 to 1998, from 71.1 to 70.1 percent, according to the Independent Sector, which tracks giving patterns. Furthermore, the average contribution of households in inflation-adjusted dollars in 1987 was $1,134, according to the Independent Sector, and in 1998 it was $1,075.
But corporations began to realize that linking their name with a cause was in their self-interest, helping them to burnish their images. Who doesn't remember when Mobil Oil began sponsoring public television's "Masterpiece Theatre"?
Today, the evidence of that calculation is ubiquitous: Visa ads tout its contributions to feeding elderly shut-ins; the Body Shop uses plump mannequins to promote a healthy body image for girls and women; mutual funds attract environmentally conscious customers by offering investment opportunities in "green" enterprises. But the concept wasn't so obvious at first.
When Billy Shore began, he wasn't thinking about "cause-related marketing." He was simply trying to bring food to the starving people of Ethiopia.
On the way to work one day in 1984 he had read a particularly graphic account of the widespread famine there -- kids with distended bellies dying at the side of the road -- and decided he had to do something. So he called the one person he always calls in such cases: his younger sister.
Debbie Shore, who was working for Hart's campaign answering phones at the time, does not recall that she or her brother ever had any long strategy discussions about how to proceed. It was intuitively obvious: Hungry people need food. So they went to the restaurant industry. "I never get over how people say it was this brilliant insight to work with the restaurant industry on the issue of hunger," Debbie says. "You'd think they would get it. You know? Hunger? Food? It really cracks me up."
A voluble, high-energy woman, Debbie, 42, seems in some ways the temperamental opposite of her 44-year-old brother. She favors clunky jewelry and miniskirts; he tends toward khakis and polo shirts or the Washington-wonk-issue navy suit, blue shirt, maroon tie. Billy is steady and driven, Debbie impulsive and action-oriented. Billy and his family live in the suburbs, which Debbie considers desperately boring.
But the two think alike, whether it is noticing the same small trait about another person, or picking out one sentence in a book -- "whatever it is he gets," she says, "I will totally, totally get that." And they both "got" that in the mid-1980s there had to be a better way to deal with hunger than looking at photos of distended bellies.
Their initial idea was a straightforward licensing concept: Restaurants that contributed to Share Our Strength would get a Good Housekeeping-style seal of approval with the SOS logo. In return, SOS would promote the logo -- and therefore the restaurant -- among socially conscious consumers. Soon, SOS was up and running -- from the basement of a Capitol Hill town house.
Two things turned this naive effort into something bigger. One was the Shore siblings' realization that skills honed in Hart's first campaign could be transferred to other venues. Instead of traditional loudspeaker-on-a-bus rallies or cultivating local organizations, they found one or two influential people in each locality and used them to organize outward in ever-widening circles of supporters.
The center of their first circle turned out to be Alice Waters, the noted California chef and restaurateur, who sent SOS a check for $1,000 and asked what else she could do to help. With her contacts, the Shores reached opinion-makers in the restaurant industry. Soon chefs from all over the country were donating -- and SOS had raised $20,000.
By 1986, both Shores had moved to Denver for Hart's second presidential campaign. There, still managing SOS in their spare time, Billy and Debbie hooked up with a local restaurant critic and some chefs, who agreed to host a Denver food-and-wine benefit for SOS, with the help of some seed money from a corporate sponsor -- eventually, MasterCard.
The event raised about $10,000 for SOS and gave Shore another crucial insight: Almost none of these folks had answered an SOS fund-raising letter a year earlier soliciting $100, yet they enthusiastically responded to the request to participate, with each contributing about $800 worth of materials and labor. Asking people for money was asking for a favor; asking them for their skills seemed to tap into a kind of longing basic to the human psyche.
This realization spawned one of the most successful ongoing national anti-hunger efforts -- Taste of the Nation. Modeling on that first Denver food-and-wine event, chefs in Taste of the Nation provided samples of their dishes to hordes of people who ponied up entrance fees. The chefs worked for free and the money went to SOS, which then gave it away in grants to anti-hunger programs. By 1988, 18 cities had Taste of the Nation events and $252,000 had been raised. The next year, the amount of money doubled, and the year after that it doubled again. By 1995, the yearly total for Taste of the Nation was up to $4.3 million. It was an example of a phrase Shore likes to use: "getting to scale." Take a good concept and multiply it many times over in many different venues.
Today, Taste of the Nation is an institution. It's held each year in more than 100 cities and has raised more than $37 million to fight hunger -- in itself, a major philanthropic success story.
In the business world, a lesson like that would have immediately spawned imitators. Yet, for the most part, the nonprofit world has been slow to take notice. Shore believes that is because it has become trapped in what he calls the Blanche DuBois Syndrome -- forever dependent on the kindness of strangers, on crumbs of leftover wealth.
"It's a failure to think about the answer on the same large scale as the problem exists," he says. Large social problems like poverty and hunger "are not solved by volunteers. They are solved by sophisticated efforts. That's why you have to create institutions."
Fortunately for Shore, he was building an institution at just the right moment.
In the early 1990s American Express was facing a serious problem. Growing numbers of merchants were refusing to honor American Express cards because their transaction fees were higher than those for MasterCard or Visa. More and more customers were forking over their green -- or gold -- cards only to have them refused. American Express needed to stanch the flow.
Since restaurants account for a large percentage of the charge business, the company began looking for a way to ingratiate itself with the restaurant industry. And what could be better than sponsoring Taste of the Nation, which was proving to be wildly popular with chefs.
At the time the event already had a national sponsor, Bon Appetit magazine, which wanted to continue its backing. But it was no match for the aggressive courtship of a huge financial services corporation, which offered $400,000 to become the event's sponsor -- more than three times what Bon Appetit was paying -- and the promise of other collaboration in the future. In the end, Shore made what he calls "a tough but necessary" decision to switch sponsorship of Taste of the Nation to American Express.
It was then, Shore says, that he and Debbie fully understood what was to become the core of the community wealth idea: that the network of some 6,000 chefs SOS had created with Taste of the Nation fund-raisers was an asset that it could, in effect, sell to American Express.
In 1993, American Express and SOS launched the Charge Against Hunger campaign in which the company promised to donate two or three cents to SOS every time someone used his or her American Express card in the last quarter of that year. Charge Against Hunger, which ran until 1996, raised more than $21 million for SOS to dole out to charities.
American Express spared no expense promoting the campaign, running television ads with arresting cinematography and featuring the music of John Lennon and Stevie Wonder. They also used the earnest, friendly face of Shore, leaning forward in a folding metal chair, talking about hunger: "Hunger exists in every community . . . We know what the answer is. And the answer is to feed people." As much as anything else, the ads made Shore into something of a minor celebrity and solidified his position as a spokesman for this new approach to philanthropy.
"He's very articulate, and he was able to get access to an audience," says Richard Steckel, chief executive officer of the Denver-based AddVenture Network and an expert on business-nonprofit partnerships. "Those are real valuable skills. Most people in the nonprofit world really don't have those skills."
In 1995, Shore put what he had learned from his experience with SOS and its corporate partnerships into Revolution of the Heart. Out on the book publicity trail, he noticed that the questions were changing. Before Charge Against Hunger, people in the nonprofit community would ask, "How do we apply for a grant from SOS?" Now they were asking, "Can you teach us how to do what you're doing?" While he couldn't promise everybody a spectacular ad campaign like Charge Against Hunger, he could help nonprofit groups identify their own assets and market them.
Shore's book was never a bestseller, but it reached its intended audience in the nonprofit sector. Jerr Boschee, head of the Minneapolis-based Institute for Social Entrepreneurs, says half-jokingly that when he first read the book, he felt he had discovered life on an alien planet. "My reaction was, `Thank God there's somebody else saying this. I gotta get in touch with him.' "
In retrospect, Shore says, "it took a remarkably long time" for him to realize that SOS had yet another asset it could sell to businesses and charities: its expertise in creating partnerships between the two worlds. Hence the creation of Community Wealth Ventures Inc., a for-profit consulting firm, in 1997.
Whether it was simply good timing or a politician's ability to conceptualize something just as society was looking for it, Revolution of the Heart came out at a time when the social entrepreneurism movement was beginning to reach critical mass. A growing number of high-profile companies were starting to earmark a percentage of their profits for social causes -- including Ben & Jerry's ice cream company and Timberland clothing stores, in addition to the Body Shop and American Express.
Stanford University's graduate school of business began offering a course on the subject in 1996, partly in response to interest expressed from some of the newly super-rich of Silicon Valley. Soon thereafter, Harvard's business school put Community Wealth Ventures in its curriculum. And in the fall of 1998, some 200 business and nonprofit leaders involved in these new charitable partnerships gathered in Colorado Springs for the first national conference on social entrepreneurship. The event was organized by Shore, Boschee, Steckel and three others. Plans are underway for a second conference next year in Miami.
"There are so many things needed by nonprofits these days as they enter this new world of entrepreneurship, and so many of us have expertise in different areas," says Boschee. "I like to think of us all coming over the horizon, flanking each other, side by side."
Not everyone is applying such heroic imagery to the concept of social entrepreneurship. At a seminar several years ago at which Boschee was heralding the new world of charity, a woman walked up to the lectern in the middle of the talk, scribbled furiously on a piece of paper and stalked out the door. The note read, "This is the most evil thing I have ever heard."
Shore also has encountered such criticism, as have all the proponents of the new nonprofit-for-profit arrangements. For some people involved in charitable giving and fund-raising, there is something morally suspect about making money while helping businesses enhance their reputation or make money off society's most disadvantaged. When a nonprofit starts making money, Shore has heard countless times, it must be exploiting people.
Thus Seattle's Pioneer Human Services, which among other things trains former prison inmates to work in the sheet metal industry -- and is a major supplier to Boeing and has revenue of than $50 million a year -- has been accused by some in the traditional charity world of engaging in "poverty profiteering." Inmates should be getting training without anyone making money off them, these critics argue.
Smaller businesses, meanwhile, cry foul when a local soup kitchen uses its food service assets, such as a fleet of delivery trucks, to win a private catering contract -- as occurred several years ago in the District. In that specific case, the soup kitchen involved was accused of using its tax-exempt status to gain an unfair advantage in the business world -- even though the money went back to fund the soup kitchen.
Such criticism is part of a more fundamental debate going on in the nonprofit world about whether the community wealth concept really has the potential Shore thinks it does. One skeptic is Pablo Eisenberg, a senior fellow at Georgetown University's Public Policy Institute who is the founder of the Washington-based Center for Community Change. Eisenberg says that, given the high failure rate for new small businesses, few of the for-profit subsidiaries created by charities will succeed. Shore has done it "brilliantly," Eisenberg says, "but there aren't too many like him."
More importantly, he sees a great possibility for financial fraud among the ones that do succeed, because many of them will continue to operate under tax-exempt status and are likely to get little IRS scrutiny. Shore acknowledges that Eisenberg has a point. "My guess is the IRS is not going to be able to keep up with this." In the future, he says, policymakers are going to have to come up with rules governing these hybrid entities.
Gary Mulhair, the former president of Pioneer Human Services whom Shore hired last year to head Community Wealth Ventures, sees a basic flaw in the criticism. Nonprofit groups like Pioneer Human Services, which train people in jobs and help them make the transition from dependency to self-sufficiency, "are teaching responsibility and planning." Charities that criticize these collaborations are putting out a contradictory message: "They're depending on handouts, and then they turn around and tell people to be responsible."
And critics who think it's morally objectionable for nonprofits to make money nonetheless want individuals and companies to make enough profit so that they will give plentiful donations. "There's an interesting dichotomy here."
Shore has his own answers for the critics.
Is it inherently bad for nonprofits to make money? No, he says, because, as every rich person and successful corporation knows, one of the best ways to make money is to have money. Will the presence of that money make it likelier that the nonprofits get greedy and corrupt? Shore says he doubts it. But as scandals such as the Aramony saga make clear, charities, like any other organization, have always been vulnerable to human vice. Is it exploitation for a community wealth enterprise to make money by selling goods manufactured by low-wage workers who can't find jobs elsewhere? No more so than for any other business, he says, and once those workers gain some job skills, they can demand higher wages or find better jobs.
And finally, critics say, is it fair for businesses set up by charities to use their advantages (lower-cost workers, donated trucks, etc.) to run regular businesses off the playing field? Yes, and Shore is emphatic here, it's a tough business world out there, and businesses have always faced competition. If some of those money-making enterprises set up by charities qualify as tax-exempt -- giving them yet another advantage -- well, that's all right, too, he says; they deserve a break, because they're trying to do something more significant, such as house the homeless or train the untrained, than merely run a business.
"You don't see these [private businesses] saying, `We're going to train poor people for jobs in the food industry,' " Shore says. If the IRS determines that a for-profit subsidiary of a charity should pay taxes -- and Shore's Community Wealth Ventures is a tax-paying entity -- that's okay, too. "I would welcome" paying taxes, he told Worth magazine three years ago. It would be more proof that "the distinction between `for profit' and `nonprofit' has become outmoded." Shortly after that remark appeared in Worth, SOS got notice that the IRS would be conducting an audit, the first in its 15 years of operation. "So they were paying attention," Shore says with a grin.
Plenty of people are paying attention. The success of the Charge Against Hunger campaign made SOS a desirable partner for business; today, it's involved in a variety of licensing agreements and marketing ventures with nearly three dozen companies, ranging from the consulting firm of Arthur Andersen to the T.G.I. Friday restaurant chain.
In August, at the leadership conference SOS sponsors every year for its corporate partners, Shore navigated the hallways of the Mayflower Hotel like Scarlett O'Hara juggling beaux at a barbecue -- chatting up a representative from Einstein Bagels in one seminar, huddling with an executive from Illy Espresso Caffe at a reception.
SOS also funds its own program: Operation Frontline, which recruits and trains chefs to teach cooking, nutrition and food-budgeting classes in low-income neighborhoods, operates in 80 cities across the country.
And recently it began branching out into the online world, launching its own Web site and participating with GreaterGood.com in a shopping site that lets consumers buy from an extensive list of merchants -- Amazon.com, JCPenney, eToys and many others -- who then funnel at least 5 percent of the purchase price to SOS or other charitable groups.
With the million of dollars it has garnered in this way, SOS has become one of the top two or three grant-makers in the anti-hunger field.
It's an unusually warm morning, and Shore has jettisoned his suit jacket while he works in his office on 15th Street. In terms of interior design, it's arguable about whether this space is an improvement over the Capitol Hill basement where SOS began. The sofa is secondhand, Shore's desk is actually a cafeteria-style folding table. The decor is starkly utilitarian -- a lot like a campaign office, in fact, where much work is waiting to be done and no one expects plush amenities.
Shore's daily schedule these days looks a lot like a political campaign, too: He spends his time making speeches, schmoozing with businesspeople and promoting his new book, The Cathedral Within, and his ideas, on television talk shows. He makes these rounds accompanied much of the time by his assistant, Chuck Scofield, who does many of the same things for Shore that Shore once did for Gary Hart. If there is a "campaign manager," it is Debbie Shore, who handles the day-to-day work of SOS and CWV. Together, the two organizations employ 50 people and have a total annual payroll of $2.7 million. Last year they contributed $8.5 million to anti-hunger groups around the country. And, it's clear, the campaign has really just begun.
So, in a way, things have come full circle. Only this time Billy Shore's the guy in front talking about what needs to be done. And he's the one quoting e-mail from a corporate vice president writing of his desire to quit the fast track and do something more meaningful, and from a retired physician longing for work that makes him feel valuable to his community, and from a Microsoft manager in Singapore asking how the Internet can be used to help community wealth enterprises connect.
It's like an election, all right, only in this election there's nobody to run against. It's just this: an idea, and a middle-aged guy who still wants to change the world.
Tracy Thompson last wrote for the Magazine about caring for an aging mother. Billy Shore of Share Our Strength will be fielding questions and comments about the nonprofit world on Monday at 1 p.m. at www.washingtonpost.com/liveonline.