Better corporate practices & nonprofit engagement through group buying

Our innovation will foster good social and environmental business practices and increase public engagement with Hawaii's nonprofits, at scale. We will leverage the Kanu network to participate in group discounts from companies screened for environmental and social practices. Each deal will be 'adopted' by a nonprofit, which will market itself and receive a percentage of proceeds. Deals offered via print, web, and mobile will engage thousands of individuals and hundreds of companies in year one. See Supplemental Materials for mock up.

• 1) What is your innovation and how will it impact Hawai'i for the better?
  We will tap the growing power of online group coupons to build market support for socially- and environmentally-responsible businesses and a grassroots donor base for nonprofits.
  
  Online group coupons have burst onto the internet as the most rapidly growing form of e-commerce in history. Group coupons work like this: A deeply discounted deal is offered online, on the condition that a minimum number of people commit to buy. If the minimum number of buyers commits, all buyers get the item at the discounted price. If the minimum is not reached, the deal expires and no money changes hands. Pioneered by the company Groupon (called 'the fastest growing company ever' by Forbes), the practice has inspired successful local imitators including PlayHawaii.com and OhanaDeals.com (see Question 2 for data on the growth of group couponing).
  
  Building on the 'groupon' model, and working with our partner the Honu Guide, Kanu Hawai'i will add two new features to this proven model:
  (1) Each deal will be 'adopted' by a nonprofit organization, which can market its needs to consumers, and receive a portion of proceeds from the transaction.
  (2) The deals will exclusively feature companies and products screened for their commitment to social and environmental responsibility.
  
  Group deals, and the nonprofits they showcase, will be made highly convenient and accessible, via web and mobile applications built by Kanu Hawaii, and via printed coupons offered through the Honu Guide. The innovation will include a 'groupon' like addition to Kanu's platform, a mobile application to engage in real time with deals, and a method to shift a percentage of sales to community nonprofits through a donation attached to each sale. This tech 'platform' expansion will empower consumers to drive changes in the business and nonprofit sectors using grassroots purchasing/donor power.
  
  Three powerful benefits will result for Hawai'i:
  (1) More socially- and environmentally-responsible businesses, having positive impact on the environment and community through their products and practices (e.g., businesses/products that help reduce waste, utilize clean energy, and buy local inputs for a stronger local economy).
  (2) Stronger nonprofits with more diversified funding sources, greater financial sustainability/stability, and a new base of public support.
  (3) An organized base of consumer-donors, aware of the impact of their purchasing choices and how their dollars can have impact on charities and businesses. For an illustrated example of how it will work, see Supplemental Materials.
• 2) How has your innovation been tested or piloted?
  Our innovation combines three proven concepts: (1) group discounts/coupons to engage customers at scale; (2) discounts/coupons to foster socially and ecologically responsible business; and, (3) using an online network and offline organizing to build a base of consumer support. Each element of our innovation has been tested:
  
  (1) The Honu Guide has fostered socially and environmentally responsible businesses by screening their practices and featuring deals.
  
  In its first 2 years, the Honu Guide (founded 2008) has attracted participation by dozens of companies in its print coupon guide, screening each company for social and environmental responsibility. Company practices are reviewed, including reduce/reuse/recycling efforts, renewable energy use, charitable giving, 'buy local' activities, carbon offsets, health impacts and other commitments to Hawaii's economy and environment. More than 10,000 printed guides have been sold as school and nonprofit fundraisers (nonprofits get $10 for each guide sold). Sales growth in it's second year is on target to double last year's book sales, company participation has increased, and advertising revenue has also doubled.
  
  The Guide builds upon proven coupon guides that promote local and sustainable business in other states such as Where the Locals Go (Washington), the Chinook Book (Portland, OR), Green Zebra (San Francisco, CA), Buy Local Book (Vermont), Blue Sky Guide (Twin Cities, MN), and others. Each of these 'lifestyle' coupon books was launched within the last 5 years and each has witnessed strong growth in its local market.
  
  (2) Groupon, PlayHawaii, OhanaDeals, and other companies prove the massive appeal of online group coupons.
  
  Groupon has been called 'the fastest growing company ever' by Forbes Magazine. Not yet 2 years old, Groupon has over 3 million users, employs 180 staff, supports $1 million in transactions per day, and has participating businesses in 40 cities (forecast to reach 80 cities by end of 2010).
  
  Groupon has been slow to gain traction in smaller local markets like Hawaii, and niche competitors with access to local business and customer networks have thrived. PlayHawaii.com and OhanaDeals.com are two Hawaii examples that demonstrate the massive appeal of Hawaii-specific group couponing. PlayHawaii.com launched in the Summer of 2010 and attracted more than 1,000 buyers, and $250,000 in purchases in its first dozen coupon offerings. Local startup OhanaDeals.com launched around the same time, and saw a comparable number of transactions and customers. Kanu Hawaii itself experimented with two group coupon deals as part of its Eat Local Challenge in September, 2010. The two deals attracted more than 450 participants within a week, resulting in total transactions of more than $15,000.
  
  (3) Kanu Hawaii has proven that a combination of web-tools, information, and networking can gather and mobilize consumer power at scale.
  
  Kanu Hawaii has proven ability to recruit and organize a network of people willing to use their consumer power, political voice, volunteer and donor energy to do good for Hawaii. We have thousands of members that have made commitments like 'I will buy locally-made products and from locally-owned companies whenever possible' and 'I will buy from businesses that treat workers, community, and the environment well.'Anonymous surveys of our members indicate follow-through rates of 65-80% on consumer-related commitments. More importantly, we have mobilized thousands of members in group consumer action including our Eat Local Campaign (which over 2 years had engaged 2,000 members their friends and family members to redirect food purchases to locally-grown and harvested sources) and our Simplify the Holidays Campaign (which has also engaged 2,000 individuals plus uncounted friends and family members in a shift away from waste-producing consumption during the holiday season). We built our network over 2.5 years with 4 staff and no marketing budget.
  
  We have also proven the efficacy of blending online tools and offline community building. This work has attracted national attention. Examples of organizations that have directly adopted Kanu's commitment-based engagement and technology platform include some of the world's leading thought organizations such as the Points of Light Institute (GetHandsOn.com), TED.com / Fetzer (CharterForCompassion.org), Jack Johnson (JackJohnsonMusic.com), Kokua Hawaii Foundation (KokuaHawaiiFoundation.org), and REAL (LiveRealNow.org). As a local example of Kanu's network effect: We drive roughly half of web traffic to Hawaii's leading volunteer site, VolunteerHawaii.org.
• 3) What community problems or opportunities does your innovation address?
  Our innovation taps the vast potential of group couponing, adding features to maximize the positive impact of socially- and environmentally-responsible purchases. It works to address three longstanding problems:
  
  (1) It addresses barriers to socially- and environmentally-responsible buying by consumers.
  
  The primary barriers to more responsible buying by consumers are a lack of accessible, reliable information and the supports to make responsible buying more meaningful. Our innovation will help Hawaii residents find and support the companies/products that fit their values, and make responsible purchasing a meaningful social activity.
  
  Thousands of Kanu Hawaii members have made personal commitments to shift their purchases toward responsible products/companies and have participated in group consumer actions via Kanu Hawaii's Eat Local and Simplify the Holidays Campaigns. When polled, members indicate that the major barrier to wielding their consumer power more effectively is lack of reliable, easy-to-access information about where/how to buy responsibly. They are hungry for information on which companies have committed to reduce their waste, support renewable energy, donate to local charities, etc. and which products are best for the environment and society.
  
  Our partnership with the Honu Guide provides qualified information about companies and products to offer our members and others. Our ability to create web and mobile applications ensures that this information is timely and accessible, making it easy for people to buy responsibly. Finally, our online network gives consumers visible evidence that their choices make a difference and that they are not acting alone that they are standing with thousands of other mindful consumers whose purchases, taken together, have serious economic and charitable impact.
  
  (2) It builds market support/pressure for socially and environmentally responsible business practices.
  
  One key barrier to the growth of more eco- and community-minded companies and products is the lack of a ready market for these products and services. Another is the lack of easy and accessible information for producers/companies about what responsible practices they might adopt. Our innovation addresses both these barriers.
  
  The screening criteria developed by the Honu Guide and Kanu Hawaii will help standardize and popularize a set of commitments/practices that define responsible business in Hawaii. Every deal/coupon will have information about the company including company commitments towards sustainability and stronger community. Consumer demand (and pressure) will create accountability for companies that have committed to these responsible business practices.
  
  Companies will also have powerful incentives to participate and to adopt these responsible business practices. First, companies that submit to screening and commit to responsible practices will gain access to a powerful combination of online group coupons and printed coupons via the Honu Guide and Kanu Hawaii. Second, these companies will gain access to a ready market (the Kanu Hawaii network) that has a preference for responsible products and firms. Finally, they will gain access to new marketing channels - the web and mobile coupon tools developed by Kanu - that will help them reach new markets, particularly younger, social media-savvy consumers.
  
  (3) It connects nonprofits with a new base of public support, adept at using online networks and social media.
  
  Nonprofits in Hawaii and elsewhere struggle to diversify their sources of funding in ways that enhance their financial stability and sustainability. In particular, many nonprofits struggle to build a base of grassroots support • individual donors who may give in small amounts, but who collectively provide a reliable stream of significant, unrestricted funds. Particularly valuable to nonprofits are donors who become evangelists for the organization • people willing and able to spread the word.
  
  By featuring a nonprofit with each group deal, we will connect Hawaii’s independent sector with a new base of donors, volunteers, and supporters. With each deal attracting hundreds of buyers and featuring the story of a single nonprofit organization, Hawaii nonprofits will have the opportunity to communicate their story to an audience that is younger, web-savvy, accustomed to grassroots fundraising, and adept at spreading the word using social media and online networks. Since a portion of the proceeds from each deal will flow to the featured nonprofit, the innovation will directly contribute to the financial stability of local nonprofits.
• 4) Why is this project a compelling investment? How will you define success?
  There are at least four reasons this is a compelling investment:
  
  (1) Impact at scale.
  Based on the historical sales of the Honu Guide, the recent experience of local group coupon companies, and Kanu Hawaii’s experience in mobilizing consumer participation, we estimate that in 2011, 15,000 individuals and 200 responsible businesses will be engaged through this innovation. For 2011, we also estimate that 50 community organizations will be engaged, raising funds and building awareness/volunteers for their causes. The net impact will be a growing circle of influence that dramatically increases demand for local and sustainable products/businesses while increasing civic engagement with Hawaii’s nonprofit sector.
  
  (2) Modest investment, high return.
  Limited investment is required because Kanu Hawaii has already developed much of the technology infrastructure, the strategy and core pieces are tested and in place, a team with significant and relevant experience is ready to go, and Kanu Hawaii has a large community/network in which to deploy the innovation (see answer to the next question for more detail).
  
  (3) Cross-sector results.
  There is also likely to be high cross-sector return on investment because Kanu’s strategy includes partnerships with hundreds of organizations. These include school groups that can benefit from fundraising Kanu’s group coupons and printed guides, businesses that can showcase their commitments to the community through the network, and nonprofits that will receive direct funding from a percentage of guides sold and group coupons purchased.
  
  (4) Earned income potential.
  The vast market potential of online group couponing, plus the growth potential of printed coupon guides creates a variety of earned income opportunities. For instance, Kanu might take a small percentage of each transaction to support ongoing operation of the innovation.
• 5) Why are your orgnization, partners, and key personnel suited to take on this project?
  Kanu Hawaii and the Honu Guide bring unique strengths and strong synergies to this project.
  
  The Honu Guide brings company screening methodology, and a network of responsible businesses that can source group coupon deals. The Guide needs the online tools and platform to enable groupon-like transactions, and would benefit from access to a pre-organized customer base. Partnering with Kanu addresses both of these needs.
  
  Kanu Hawaii’s social network of 13,000 members plus 3,000 social media followers are web- and savvy, comfortable with e-commerce, and predisposed to group action. They are perfect audience for groupon-like deals from sustainable/responsible businesses. Kanu also brings a network of schools, youth groups, nonprofit organizations and others that are natural fits for fundraising with the print and online group coupons. Finally, Kanu has the web engineering expertise to build the technology needed for groupon transactions and can integrate groupons with existing commitment tools (e.g., companies may be asked to offer deals and commit to a sustainable business practice(s) if enough people “tip” the deal (e.g., to eliminate plastic bags, reduce packaging, or change employment practices).
  
  Key personnel include Olin Lagon, James Koshiba, and Tyler Mongan.
  
  Olin Lagon has a diverse background in entrepreneurship and social enterprises. He has worked on several startups that blend business and social/environmental objectives, served various non profits in various capacities, and worked in over 20 countries. His last five ventures have been mission driven engagements • a two year Peace Corps Business Volunteership in Russia where he founded his first social venture Verbioso, technical assistance and finance manager at a community lending institution, CEO of a non-profit owned company creating and sustaining technology jobs in Hawaiian homestead communities, President of a group payment aggregation firm that helps channel millions of dollars a year to grassroots efforts through social media fundraising (ChipIn.com/SproutInc.com), and now Director of Social Ventures for Kanu Hawaii. His software designs have been adopted by Fortune 500 firms and institutions such as MIT. Olin, raised in public housing projects, graduated from the University of Hawaii with degrees in Accounting and International Entrepreneurship. He was also a Fellow at the East West Center and is a graduate of the Pacific Asian Management Institute.
  
  James Koshiba is Executive Director of Kanu Hawaii. As noted, Kanu Hawaii works to build island-style social movement for sustainable, resilient, compassionate communities through personal commitments and demonstrations of kuleana. Using a mix of grassroots outreach and web 2.0 tools, Kanu has attracted more than 12,000 members in its first 2.5 years of work, and mobilized them in campaigns for consumer action, policy advocacy, and volunteerism. Prior to Kanu, James was a founding Partner at 3Point Consulting where he worked with more than 100 schools and nonprofit clients. James served as Principal Investigator on several prominent policy studies including Asset Policy in Hawaii, Poverty in Hawaii, The Economic Impact of Early Childhood Education, a New Economy in Hawaii, and State Policy & the Nonprofit Sector. James' other experience if focused in local economic development. He worked in the field of community development finance with several loan funds and venture capital funds that used capital to create jobs in low-income communities in Hawaii, the Pacific, and in the Northeastern US. James earned his undergraduate degree from Brown University and a Masters in Public Policy from the Harvard Kennedy School of Government.
  
  Tyler Mongan is founder of the Honu Guide and an accomplished socio-ecoprenuer. The mission of the HonuGuide is to offer tools that educate, incentivize, and connect with the focus of changing consumer habits and business practices towards the creation of local living economies. He is also a member of the Board of Directors and Treasurer for Envision Hawaii which helps educate and develop current and future leaders in Hawaii. Tyler is also a founding partner in Nella Media Group - a niche media agency that focuses on active lifestyles and sustainable living. Current projects include innov8 magazine (the official magazine of go! mokulele airlines) and chinatown newspaper (the newspaper of downtown Honolulu). He is a graduate of Southwest College of Naturopathic Medicine and Augusta State University, and has served as a faculty member of Heald College and Kapiolani Community College.