Using our power to consume, for good

Aug 29, 2013

I’ve been talking with people all over the map about organizing for social change--from activists to venture capitalists, environmentalists to economists, community organizers to tech CEOs--and it’s brought out some great ideas and changed my perspective on some issues.

But in between the “A-ha” moments and the, “Am I hearing this right?” moments, I sometimes like to do a quick reality check-in.

Lately, it’s been with my friend Will Byrne, co-founder and CEO of Groundswell, an organization that helps communities gain access to affordable clean energy by pooling their purchasing power.

Though our missions are different, there are some similarities between our organizations: Groundswell is also organizing people together to achieve economies of scale to gain access to services that they need.

Will and I often find ourselves at the same conferences, observing the same things and, sometimes, coming to different conclusions. It’s always interesting to hear his take.

Sara Horowitz: I've found that the people I'm learning the most from these days are the share-economy, venture capital, new-market types. Then I go back to the social sector, and it's really hard to find people with new ideas there.

Will Byrne: Yeah, I think you and I are learning a lot from the same people right now, and at the same time, it’s not always clear who represents and aligns with our values and the "core outcomes" we're going for.

There’s an opportunity for people to use their power as consumers to improve their communities and advance social change.But fundamentally, we're in this exciting moment when the dynamics of the economy are rapidly changing, and it’s transforming the way we live and work, the way we interact and consume.

For businesses, it’s changing how profits are made and its lowering the barriers to new enterprises with creative business models.

With society changing so quickly, you’d think that “social change” strategies would be revolutionized as well, but what we’re finding is that the social sector still seems to be caught in the old economy paradigm and in many ways, is still catching up with the New Economy.

**Sara: Exactly. I've been thinking lately the for-profit, venture-backed companies in the share economy are really akin to the people who built the railroads in the 1800s: They're building a lot of needed infrastructure that we're all going to be using in this country. ****And, like the railroads, these companies have a business purpose and a rate of return to meet. **

**I think it can get confusing when there's not an acknowledgment that that's their #1 driver, even if there are other positives. **So, as much as the share economy and the peer economy are doing good, and people are sharing…the returns aren’t going back to the sharers. What are your thoughts on that, in terms of social change?

Will: It’s great that companies are creating platforms for people to coordinate and maximize their resources, and even better that so many people are excited about exploring new ways to share rather than going out and just buying more stuff. This is a positive development, for sure.

At the same time, the New Economy has the potential to do so much more than just drive profits to savvy entrepreneurs and investors. There’s also a clear opportunity—and need—for everyday people to use their massive market power as consumers in the 21st century to improve their lives, improve their communities, and advance social change.

Sara: When you say that people can use their power as consumers to advance social change, what exactly do you mean? If you pool enough people together, they gain the leverage to make gains on the social issues they care about

Will: It's this idea of Civic Consumption, in which transactions can become collective actions that advance a positive social outcome or benefit for your community.

I think we're arriving at a moment where a lot of people care about making positive change in the world, and want to live their lives intentionally to make that kind of change. There are plenty of one-off examples of this kind of “conscious consumption”: People buying Seventh Generation products or Fair Trade products, for example.

But our belief is that instead of consuming as individuals, we can engage networks and communities to pool our power as consumers in order to push not only for lower costs through economies of scale but for actual changes in how businesses, and whole market sectors, address social needs. With the rapid growth in new enterprises and meaningful alternatives, consumers have more power today than ever before.

If you pool enough people together as consumers, they gain the leverage to make gains on the social issues they care most about, and reward businesses that operate locally, hire local people, operate sustainable supply chains, and so on.

**Sara: This is where it gets interesting, because once you start to aggregate consumers, you can go in two different directions: ****One is the traditional for-profit sector, to just sell products to them. The other direction is to say there's going to be a social, non-profit-type strategy that will aggregate people and return and recycle the money back into that community. **

**I think the people in the first category—the sharing economy folks—are saying, "We share, therefore, we are social sector actors." ****And yes, they're promoting sharing and creating infrastructure and that's all good, but there's still a real profit motive there. **The second category—which is what I think you're talking about—adds another element that must be there for social change to happen. It doesn't make anybody great, but it does mean something.

Will: You hit the nail on the head. I wouldn't classify it as, this is right or that is wrong. I would look at it from an impact standpoint: We're trying to make a social impact through the enterprises that we're building, and I think that gets missed when you're focused solely on having as many transactions as possible and ticking off the profits.

There are huge opportunities to create savings and build assets for people, while at the same time being more inclusive and advancing a social mission. Like what we’ve done with Groundswell.

But there are a lot of things that society needs that aren't shareable day-in and day-out, like energy, water, food and healthcare, that are really important to low-income communities.

Millennials have come to expect creativity and innovation to drive our everyday lifeSara: Tell me now about what you guys are doing, and how you see the role of markets in social change.

Will: Building on this idea of Civic Consumption, we’re working to bring communities together by aggregating their demand as consumers, and we’re finding that by doing so, you can actually drive newfound access for the things people really need. Like clean energy.

A lot of people want access to clean energy, but they are priced out by the cost premium. What we’re doing at Groundswell is surprisingly simple: we bring together lots of community institutions and residents—with a focus on including low-income residents and the organizations that serve them—and pool them together in a collective bid to clean energy suppliers.

We recently did a $5 million energy project for over 100 institutions, including the NAACP in Philadelphia, lots of churches and faith-based organizations and nonprofits. Because we've created so much demand, we can negotiate a lower rate for energy. That's huge.

At the same time, we've also creating a market for the suppliers who want access to new customers. And, we’re actually switching all these institutions and residents over to cleaner power.

Sara: That’s great. I love it. So I have to ask you: A lot of people are looking at millennials to figure out what will mobilize them. I assume that you think about this quite a bit. Your thoughts?

Will: That’s a great question, and I think all too often, the social sector is the last to figure this out, while in the meantime, more agile players in the economy are innovating new scalable models of change or disruption that engage and excite a whole generation.

So as far as millennials are concerned, many of us have come to simply expect creativity and innovation to drive our everyday life. I think that by helping people leverage their consumer power in new ways to drive change, we can transform the social sector from that restricted charitable entity of the past to being on the cutting edge and, frankly, playing in the big leagues when it comes to using market competition to drive our goals.

Sara: And do you feel hopeful? What's your sense of when that's going to happen -- 5 years, 10 years, 25 years?

Will: Definitely. I have this idea that my grandchildren will think that it's quaint and funny and frankly a little strange that there was ever a time where people made an everyday transaction that didn't drive real social impact. I think that'll just be the norm; a part of our ever-evolving consumer psychology. That's my hope and that's my vision.

**Sara: I think that's a great place to end—on a poetic note. **So what’s next for you, and how can people find out more about what you’re doing?

Will: We’re excited to find and work with other impact entrepreneurs in this space, and we are pulling together people using this strategy of helping communities unlock their shared purchasing power to drive social change. Groundswell is doing it in energy, but there are pioneers doing it in healthcare and insurance (like Freelancers Union), food, broadband, and literacy.

In the fall, we’ll be hosting The Civic Consumption Summit to bring this community together and make exciting plans to continue growing Civic Consumption as a new impact-oriented movement within the new economy. And of course you stay up to date by liking us on Facebook or following us on Twitter @grndswell.

Sara Horowitz

As the founder of Freelancers Union, Sara has been a voice for freelancers for over two decades.