07 March 2011

Another kind of OPM

Usually OPM refers to using Other People's Money for infrastructure that benefits you, but I recently received a variation of OPM in my email:
Nika Water Affiliate Invitation

After reviewing your site, I wanted to reach out to you regarding becoming an affiliate for my client, Nika Water.

NIKA Water is a unique and eco-friendly premium bottled water* company dedicated to fulfilling it’s mission which donates 100% of their profits to bringing clean water and safe sanitation to impoverished areas. Check out their site to learn more about this altruistic company! Their affiliate program is run through Impact Radius and offers a 5% commission! With high average order values and seeing the program’s success thus far, you could potentially make a good amount of money supporting this charitable brand.

With your content-related site and web traffic, we think you would make an excellent affiliate for our program - so apply today and we will approve you!

If you have any questions, please feel free to reach out to me and I can help out with the process! Also- as an OPM (outsourced program manager) we work with numerous clients across a wide variety of verticals, so let me know if you’re interested in learning more about our other clients!

Thank you for your support of NIKA. Helping the world never tasted so good!
So, besides the charming mistakes with grammar ("it's mission...their profits"?) and use of jargon (Impact Radius? verticals?) that makes no sense to me, I wondered about an altruistic company that makes profits. How does that work? Well, I saw got this from their site:
At NIKA we are all about helping to end poverty through bringing clean water to those who don't have access to it. One way we do that is through the donation of wells with our profits. Suppose, instead of selling bottled water, we were focused on having people write checks that we would then donate to water projects...that would be a logical approach. If year after year our NGO's depended on us to give them our donations to build their wells they would be very happy with us. If, however, the economy went into a recession as we're currently in or if another world catastrophe occurred, such as Haiti, then our donors could logically tell us that while they believe very much in our cause they feel the need to make sure that their personal finances are shored up or that they need to take a break this year from supporting us to support the efforts in Haiti, for example. We would certainly understand, however, our local NGO partners who have people in country depending on them to build wells and to bring clean water, could be hurt very badly. Although this is simple example, the records of donations over the past thirty years bear this out. When tough economic times occur, donations tend to drop by about 5%. This means layoffs and program cuts.

NIKA's model is one that doesn't need to rely on economic cycles or donor priorities but rather it uses the market place to create the profits which are then contributed back into the causes.
I'll summarize this business model:
  1. We sell bottled water, pay ourselves and send the leftover money (profits) to build wells.
  2. We also have lots of cute people on staff, wearing cool shirts, cause we're saving the world ya know.
  3. That's more sustainable financially because charities see drops in donations and we don't expect to see a drop in profits, because we're immune to business cycles.
  4. Why? We sell water to people who shop at Whole Foods. Apparently, they love to do the right thing and always buy bottled water.
Nice try.

Bottom Line: I'm neither a fan of NGOs that build wells for people or for profit companies that promise to give a portion of their money to charity (remember Starbucks's Ethos Water?). I'd prefer that people who need water build and manage their own wells, the way Charles Banda does it in Malawi or WaterAid has done it since 1981.

* Their water is almost comically-clean [click "our process"]. They are in La Jolla (near San Diego), but claim their water comes from the Sierra Nevada (most water near SD comes from the Colorado River). Anyway, it looks like they take tap water, "multimedia" carbon filter it, evaporate it, "micron" filter it, then "ozonate" it, and then put it in a nice clean plastic bottle.

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