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Nonprofits should lead the sharing economy and demand more from the private sector. The Sharing Economy -- the use of networked, often mobile, information technology to share goods and services -- offers nonprofits new possibilities for innovation and efficiency along with new paradigms to move from scarcity to abundance.
Whether it’s AirBnB, the Sharing Cities Network or Car2Go, the range of sharing economy examples is reaching a tidal flood.
What is most exciting about the Sharing Economy is its embrace of a revitalized public square and a rejuvenated commitment to social good. This is part of the Sharing Economy with the most transformative potential: the ability to address societal inequities and envision new ecological solutions.
Nonprofits, faith-based organizations, libraries, and networks such as the NetSquared Local should be leading this movement as they are already committed to social good. We should also create more substantive partnerships with the private sector, learn from its innovations and successes, and build a more transformative Sharing Economy.
According to Wikipedia, the sharing economy (sometimes also referred to as the share economy, shared economy, mesh, collaborative economy, collaborative consumption) is a socio-economic system built around the sharing of human and physical assets. It takes advantage of urban density imagining new business models that prioritize access over ownership, peer-to-peer networks over hierarchical control and challenges our consumer status-quo.
Rachel Botsman, author of the seminal, What’s Mine is Yours, breaks down the Sharing Economy (which she renames the Collaborative Economy) into four helpful segments: collaborative production, collaborative consumption, collaborative finance, and collaborative education.
Botsman highlights the common element in all these segments: distributed power.
But Botsman overlooks some of the tensions found in the collaborative economy.We should be vigilant when companies with half-a-billion dollar valuations wrap social good initiatives in shiny, marketing wrappings and assume the language of urban planning. A deeper look at AirBnb’s Shared City Initiative with Portland raises questions. AirBnB tells us…..that.….They Like Cities. AirBnB will allow hosts to donate to local causes; will add smoke detectors, will work on joint campaigns with the city and improve disaster preparedness.
What about Portland’s network of grass-roots nonprofits, local meet-ups as well as national leaders? What about innovative nonprofits like Code for America or Caravan Studios that are encouraging civic and governmental organizations to share often closed sets of data? These nonprofits are partnering with technologists to create new tools for civic engagement and under-served populations. Where are they in the Shared City Initiative? What type of outreach will AirBnB do to Portland’s disadvantaged communities?
We should also pause and note the tech sector’s troubling tendency to turn inward while adopting the language of the public square and the commons.
Finally, we should ask hard questions as the private sector embraces social good partnerships:
Botsman encourages us to think in a new way about “asset utilization” because “new technologies unlock a hidden wealth of underutilized resources” and can “transform how we match people’s ‘haves’ with people’s ‘wants.’”
Local, grassroots nonprofits are best positioned to analyze their community’s needs and unlock Botsman’s "’idling capacity’" of resources — the untapped social, economic, and environmental value of underutilized assets.”
Erin Morgan Gore highlights this potential in her article, Nonprofits Should Lead the Sharing Economy. Gore envisions nonprofits taking a leading role in the sharing economy, harnessing their creativity and grassroots knowledge to create innovative public/private partnerships and build new platforms.
We, as nonprofits, have the power and the numbers to make our voices heard. GuideStar USA has pointed out:
"More than 70 million people work and volunteer in the nonprofit sector. Nonprofit employees make up the third-largest workforce among U.S. industries, behind only retail and manufacturing, and nonprofits create total revenue of more than 1.9 trillion annually, exceeding the total GDP of Canada, Australia, Russia, or India. But nonprofits are so much more than these statistics (link)."
The center of the Sharing Economy is our democratic commons and a commitment to an inclusive social good, combining open-source technoogy, new business models and access to knowledge. Let us insist on what is most transformative.
Nonprofits need to speak up. During the plenary session at the Share Conference in San Francisco, Janelle Orsi asked, "Are we ready to build a movement? Are nonprofits ready to build alternative platforms to AirBnB and Lyft’s owned by the people?"
Join us in the conversation at #Share2014.
Update March 2015
Tell us in the comments: who and what (and why) is at the core of the Sharing Economy moving into Spring 2015?
We'll reach out to some of the leaders quoted in this story and share their updates.
Lewis Haidt Senior Manager, TechSoup Online Community and Social Media @lewisha
Great post! Jeremy Rifkin's "The Zero Marginal Cost Economy" is another good source of ideas around the sharing economy, anti-capitalism, and the role of the nonprofit sector. But he too has been criticized for implying that the nonprofits will lead the movement when it is mostly for-profit companies co-opting it. www.nytimes.com/.../the-rise-of-anti-capitalism.html.
This is a really good post. It gets at a fundamental tension within the sharing economy -- that economic gain is built upon access to the Commons. To be very fair, the Commons is rarely organized efficiently without someone being motivated by gain. All those rooms being offered via airbnb...all those cars being 'shared' by Lyft drivers....they all existed before airbnb and Lyft, just as the knowledge and neighborliness of Nextdoor existed before Nextdoor. But it didn't coalesce without entrepreneurs dreaming of IPOs. This post challenges us to think about whether nonprofits--or other not for profit oriented entities--can organize the Commons with a greater emphasis on the sharing and less on the IPO.
Lewis, Many thanks for this post and the great resources you linked to. (and Thanks Lucy Bernholz for tweeting me here.) I particularly like how you point out defining characteristics of the sharing economy: distributed power, exploiting underutilized resources, and The Commons. I think many companies that are defined as part of the sharing economy effectively utilize technology and certainly technology is the what makes exploiting underutilized resources possible but I do not think that technology is a defining characteristic of the sharing economy. Tech is a tool that humans employ to do a job. What the job is and the outcomes of the job dictate how the tech is used.
I also really appreciate the many questions you have asked. Throughout my career I have been obsessed with building the capacity for socail sector organizations to answer the question "Are we any good?". Not working to answer this question proved to be a major stumbling block for microfinance. Social enterprise and impact investing are working hard to understand the value beyond profit they provide but are still very much mired in the debate of profit-first vs. value-first.
The opportunity we have with the sharing economy is define the outputs of collective impact. As opposed to the traditional outputs of Capitalism where value aggregates at the node, in the sharing economy, value should be a defined as a characteristic of the network - something like vibrant communities - an interesting proxy for love. A recent study (www.equality-of-opportunity.org) identified 5 characteristics of communities with low upward mobility. Addressing those characteristics may produce communities with greater social mobility - greater vibrancy. Maybe those levers could be built in to the sharing economy.
I think there is a great danger that applying mobile technology to enable people to access products/services can become the default definition of the sharing economy - that the financial success of a company defined as a sharing company is inherently good. What are the outputs of sharing that produces value beyond profit and that are valuable enough to enable profit to be generated as well?
Daniel, I really appreciate the comment that "the Commons is rarely organized efficiently without someone being motivated by gain". The only woman Nobel Prize economist Elinor Ostrom's work demonstrates how the a commons can be organized to enable economic activity without depleting the resource. onthecommons.org/.../elinor-ostroms-8-principles-managing-commmons What I like about her work is the focus on a commons as a resource upon which a community's economic activity is built. The "tragedy of the commons" results without the commons governing principles that Ostrom delineates.