Profiting-to-Give: harnessing EA talent with a new funding model

by andavargas 2 min read4th Mar 201912 comments


There is a morale issue in EA. It is dissatisfying for many passionate members in the EA community to either A) try and [probably] fail to secure a career among EA organizations or B) do largely meaningless work each EA individual separately in order to "earn-to-give." Given the huge amount of talent in EA and how it often tends to pool together geographically, there is a third option that comes to mind: individual EAs could doing meaningless work together in companies that they control and give of their excess to EA charities. Or as I'm labelling: profiting-to-give.

Before I continue, I should point out that I consider myself EA-adjacent. Many of my readers, however, may consider themselves similarly. I am not nearly close enough to the center of the EA movement to be able to implement some of the more audacious proposals below, which is why I'm serving them up as a blog post rather than doing any behind-the-scenes string-pulling.

Some background

For-profit companies are legally required to pursue their own interests. What that means fundamentally changed about 5 years ago, when B-lab, a non-profit in Pennsylvania, USA, started successfully pushing through laws in many states in the USA that allow companies to explicitly declare some good objective as one of their "interests." A company that structures according to this new rubric is called a "Benefit Corporation," and you could say that it has terms in its utility function for entities besides <delete>itself</delete> its shareholders. Laws with similar provisions have recently been enacted throughout the Anglosphere and Hispanosphere.

There is some confusion in this space about the difference between a "B-corporation" and a "Benefit Corporation," as they are often conflated. A "Benefit Corporation" is a legal term and it refers to a company that satisfies the relevant legal definition. A "B-corporation" is a benefit corporation that is certified by B-lab. A certification from B-lab has stricter requirements and also costs $$$.

Hold up.

A self-anointed non-profit pushed through legislation creating a framework conferring legitimacy upon its goals that it could take advantage of to pursue them more fully (with some clever 🅱️arketing). And those goals have now been adopted by over 2000 companies all over the world and it gets paid for it.

II. My proposals

1) The EA movement can create a company certification. They can attach criteria such as financial transparency and giving 10% of its yearly profits to EA causes or something. Such a certification rides on the work of B-lab, such that any involved company would have to be Benefit Corporation but not necessarily a B-corporation.

2) Create a start-up incubator for companies that want to start off as EA-certified, to enculture a wide swath of talent that can operate at all levels in business.

3) The large quantities of eager talent that cannot find jobs in EA orgs could flock to these benefit corporations instead. Any attempt by one of these to pivot away from EA's certification would probably result in most talent leaving, a fatal [disincentivizing] blow. Also note that EA talent may be willing to work for less money for the possibility of working for an EA-certified company, which may also result in EA-certified companies undercutting their industry and having a competitive advantage.

4) People in the EA movement would be a prime target for products created by these organizations, closing the feedback loop and territorializing an entire self-regulating market out of the movement. There is no ethical consumption under capitalism, perhaps, but perhaps there is under an EA-certification.

Note: I am not arguing for Impact Investing. EA-certified companies do not have to a have a noble goal, they just have to funnel resources to the EA movement and whatever else as per the EA-certification's standards.