Green Dimes: The VC-Backed For-Profit Philanthropy

There's a lot of controversy surrounding the concept of for-profit philanthropies. Personally, I think the idea is pretty good, although I do understand that at the margin, there will always be a trade-off between doing the maximum amount of good and making the maximum amount of money. Which is why some people got very upset when it was revealed that Mexican microlender Banco Compartamos had made hundreds of millions of dollars for its investors.

I do still believe that a happy medium can be found, however. In some cases the more good that gets done, the more attractive the business is to its customers, and the more profitable it becomes – everybody wins. That, I'm sure, is the thinking behind Green Dimes, which has just raised more than $20 million of venture capital from Tudor Investment Corporation and others.

The idea behind Green Dimes is that individuals sign up for a dime a day, and in return the company will reduce the amount of junk mail they receive by more than 75%. That in itself is good for the planet, but Green Dimes also plants one tree per member per month – more than a quater of a million trees so far.

I daresay that something like Green Dimes might be sustainable on a non-profit basis, but Green Dimes is ambitious: it wants to grow fast, it wants to expand internationally, and it doesn't want to just use its own cashflow or waste vast amounts of time filling out grant applications and begging donors to write relatively small checks. Much better, in many respects to go for-profit, get lots of money up front. More people sign up, more trees get planted, and the founders get to make lots of money to boot.

Everybody wins, in theory. I just hope it works out that way in practice.