KarmaGoat Seeks a Profitable Paradigm

KarmaGoat has accomplished something perplexing: giving meaning to the meaningless. The site, which launched in beta last May, is social e-commerce with a philanthropic twist,…

KarmaGoat has accomplished something perplexing: giving meaning to the meaningless. The site, which launched in beta last May, is social e-commerce with a philanthropic twist, a do-good online marketplace that allows users to buy and sell items and donate the proceeds to charity.

“The online charitable sphere is a very exciting field to be in right now,” James Chung, head of technology and product for the brand, said. “There are social e-commerce sites out there like YardSellr or Facebook Marketplace and there are fundraising sites like Causes and Crowdrise, but we are the first to combine both concepts.” Inspired by founder Jonathan Lehmann’s 2009 move from Paris to New York, which left him with a stockpile of donation-worthy goods, the site functions as Chung describes: a seller lists an item, sets a price, and picks a cause. The buyer, in turn, pays the purchase price to KarmaGoat, who then forwards 85-percent to the chosen cause.“The founding insight behind KarmaGoat is that we all own tons of valuable stuff, and that some of this stuff just sits idle in our homes,” Chung said. “What’s more meaningful than helping worthy causes that are starved for money and attention?”

For the time being, KarmaGoat is keeping things local. When a purchase is made, the buyer is given a password; to complete the purchase, he or she must give, in person, the password to the seller, who then enters it online to complete the transaction. “We are currently examining ways in which we could facilitate shipping, but our primary goal is to establish local marketplaces, that are conducive to fast/friendly/green/socially-beneficial transactions,” Chung explained. With that in mind, Chung noted, providing new venues for transactions is one of the site’s ongoing missions; currently, their main considerations are a drop-off venue through the United Way of Greater Los Angeles or allowing professionals to sell labor, thereby employing their abilities for good cause. “Instead of stuffing envelopes or doing manual labor,” Chung said, “professionals with valuable skills can transform those skills into money for their causes.”

By finding a middle ground between e-commerce and charity, KarmaGoat is bridging a number of gaps between those in need and younger generations, whose participation in organized giving is often limited by time and resources. A seller, Chung said, is provided a venue for comfortably selling to friends, having curbed the personal financial gain, while, “from the non-profits’ perspective, KarmaGoat provides a new revenue stream and access to a younger demographic, the Facebook generation.” As the venues for donation expand, particularly through the selling of services - one can imagine the multi-faceted gain of a national network of, say, charitable tutors - so will the connection between younger generations and philanthropy, no longer largely removed.

So far, Chung said, the site has raised $2,000 for 20 causes, largely through marketing efforts directed at student communities, in light of the fact that “university campuses are existing marketplaces, centered around physical locations, where community members are both especially sensitive to public interest causes.” In a lot of ways, though, KarmaGoat’s more far-reaching, underlying cause has wider implications. Inspired by TOMS, Delancey Street Foundation, and Greyston Baker - profitable, while charitable, enterprises - KarmaGoat is in the business of “shifting the paradigm of giving: whereas once upon a time people and companies were expected to make a lot of money, and then give back once they’d reached the top, the new paradigm is that people and companies should do good on their way up, and that the more good they do, the more successful they should be.”

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