Virgance gives philanthropy a proletarian twist

For many years, giving large amounts of money to charity, or affecting the moral choices of major companies, has mainly been the province of elite donors and the corporations themselves. Changing this status quo seems difficult — there’s simply a huge divide between those who have money to give away and the power to make decisions, and those who do not.

But a new San Francisco startup called Virgance thinks there’s a way to use social networks to give the masses power over such decisions — with the willing participation of the business world, no less. If the company’s ideas take off, it could have a serious effect on the way both charity and corporations work, by directly reaching into companies’ coffers.

The idea behind Virgance isn’t just setting a bunch of people loose on a social networking application and hoping they’ll self-organize, which is often the pie-in-the-sky hopes held by the sort that talk about the “power” of social networks. People need ease of use and amusement, while companies want clearly defined, predictable returns. Virgance is gearing up to launch two activism campaigns that are structured to achieve those aims.

Those two are a social networking application called “Lend Me Some Sugar”, which will allow individuals to redistribute the money that big corporations give to charity, and CarrotMob, a sort of offline business competition that rewards corporations for making sustainable choices by organizing “buycotts”. Yes, that’s the opposite of a boycott.

CarrotMob has already had one success. Started by Brent Schulkin, who joined Virgance as a co-founder, the idea had its first run in San Francisco in April of this year. Schulkin asked over 20 local stores to bid on the business of his group, by promising to spend a portion of the profits on energy efficiency.

The store that won bid 22 percent, in return making over nine thousand dollars from the three-hour buying spree, or around four times the receipts from a normal day. A video about that first event is here.

Schulkin hopes to kick off similar events around the country, bringing them up to an ever-larger size to convince businesses to get into the game. And to prove it’s not just an idea for San Francisco liberals, an upcoming event is being planned for Kansas City.

“Lend Me Some Sugar” takes a rather different tack. Big corporations all have a philanthropy budget of some size, because a percentage of profit can be donated as a tax write-off. Really big companies face a challenge in figuring out where and how to distribute the millions of dollars they have for charity, and have internal bureaucracies that determine how to spread it around.

So for Lend, Virgance’s other founder, Steve Newcomb, wants to give companies a new way to benefit from their philanthropy. Say you’re on Facebook, and you go to the Lend application. You’ll be presented with a certain number of points, which represent corporate charity funds. You can then decide which of several hundred charitable organizations to send those funds to. And what’s more fun than giving away someone else’s money?

The trick is that the funds you’re distributing are branded, so you can see, for example, that Acme Inc. is the company that’s donating. Acme ends up looking great — after all, you’re getting to use its money. If you’re active in giving out funds, you’ll get access to more, and can also form groups or compete to distribute philanthropic money.

Newcomb, a former founder of semantic search company Powerset (we profiled Newcomb early this year) says finding interested donors is “kind of like shooting fish in a bowl”, because Lend would effectively give the companies access to a marketing channel they’ve never had before, as well as doing away with the difficulty of running their own internal philanthropic apparatus.

Both CarrotMob and Lend are slated for official launch later this year. And there’s also a plan for Virgance itself, a for-profit company, to make money in the process. The Lend application will have advertising — Virgance will not skim off any of the charity funds. CarrotMob will also avoid tapping the funds of users or companies, instead tapping the team event concept to sell merchandise like t-shirts, as groups start up around the country.

Another recent Facebook application to give users power over companies is Village Green Energy, which pushed several wineries to switch to renewable power. And there’s the grandaddy of philanthropic applications, Causes, a highly successful app that helps rally users to raise funds for non-profits.