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Donor Dollars Into Dividends: The Past, Present, and Future of Nonprofits Aiding the Private Sector

June 20, 2019

TreeForkIllustrationBleeding plant-based burgers were last month’s biggest financial news. Beyond Meat had the most successful initial public offering of any startup since the 2008 crash, and Impossible Foods raised $300 million in venture capital. Both burgers can hold their own in the meat aisle or a fast food restaurant.

Clearly, there's a lot of money to be made by making meat without animals. So why are nonprofits spending donor dollars to support the industry?

It's no secret that nonprofits have a strained relationship with the private sector. All too often, it falls on us to clean up the messes businesses make — or to stop them from making those same messes again.

But when there's an urgent need for new entrants to transform an industry, nonprofits can play a pivotal role in making that transition happen — and happen fast.

Consider the industry producing antiretroviral drugs (ARV) for HIV. When the lifesaving treatment was first invented, it was produced in small quantities and sold for $10,000 to $15,000 a year. Most patients, especially those in AIDS-ravaged Africa, literally couldn't afford to survive.

To ensure that everyone could access treatment, activists knew they would need a pharmaceutical industry that could make up for low margins by selling in huge volumes. They encouraged new entrants, pressured incumbent companies, brokered purchase agreements, and funded scientific research. Prices dropped a hundredfold in less than a decade.

Today, incumbent energy producers are making fat profits by pushing us to the brink of climate disaster. Producing clean, renewable energy will be an uphill battle as long as existing infrastructure, government policies, and economies of scale make fossil fuels cheap and convenient.

Society needs clean energy companies to avoid catastrophe, so nonprofits have taken up their cause.

Nonprofits like Ceres, the American Council on Renewable Energy, and Vote Solar help green technologies get to scale by advocating for government policies that help clean energy compete with fossil fuels. In the meantime, Re-VOLV provides crowdfunding to help get solar projects off the ground. And Grid Alternatives is one of the groups making sure this transition lifts everyone by providing green job training in underserved communities.

In every case, donors are funding programs that help certain companies profit. They know the sooner these companies succeed, the sooner we can stem the tide of climate change.

Now the nonprofit world needs to transform agriculture.

Society can no longer bear the costs of meat-production-as-usual. Animal agriculture causes more climate change than the emissions of all the world's vehicles combined. Eighty percent of medically relevant antibiotics are fed to farm animals, breeding the drug-resistant superbugs that by 2050 could kill more people per year than cancer kills today. The world's hungry deserve nutritious and delicious food, but there simply isn't enough land on earth for everyone to eat as much meat as Americans do.

Haranguing people to eat beans rather than beef hasn't paid off yet, despite decades of trying. The climate is changing too quickly to rely on vegan evangelism alone. As the global demand for meat rises, we need a food system that eliminates the waste, biohazards, and inherent cruelty of industrial animal farming. We need a meat industry that makes meat out of plants or grows it directly from cells.

The success of the field's leading companies is inspiring, but it's not enough. For this industry to succeed in time to solve the problems we face, it needs nonprofits' help.

Plenty of technical challenges remain. The vast majority of plant-based meat is made from just a few crops. Unlocking the full power of the plant kingdom will enable us to make better meat — not just burgers, but also bacon — and make it more sustainably.

Meanwhile, companies like Memphis Meats and Finless Foods are growing meat straight from cells. The result is animal meat, right down to its DNA, but it does not require breeding and feeding whole animals, making it more resource efficient. With the basic science well understood, the challenge now is to scale up production of this cell-based meat and lower prices enough to compete with slaughtered meat.

Investors will fund patent-protected research and development, but philanthropic dollars can support open access-research that can benefit the whole industry, not just one company.

As if the technical complexities of re-inventing meat weren't challenging enough, some holdouts are doing everything they can to keep plant-based and cell-based meat from competing on a level playing field. Their favorite strategy — banning the use of "meat" and related terms on plant-based or cell-based meat — has already become law in a dozen states. Unlike Beyond Meat and Impossible Foods, most plant-based and cell-based meat startups are still small. They don't have the personnel or expertise to fight for fair laws, even in the face of existential threats.

Fortunately, speaking truth to power is what nonprofits do best. We need to convince policy makers that the word games have real consequences for the planet and its people.

Even when things are going well for the new meat industry, that doesn't mean it's benefiting the communities that need it most. Nonprofits can leverage their connections to help companies take root in markets like India and Brazil, which have high need and high potential but low margins and difficult logistics.

Would we get affordable AIDS medication, renewable energy, and sustainable meat if nonprofits didn't support these industries? Probably — sooner or later.

But when the status quo benefits the few at the expense of the many, later is not an option. By funding initiatives that accelerate open-access research in making meat from plants and cells, strategic philanthropists can transform Big Ag into Better Ag faster than the market ever would on its own, and they can make sure this change benefits the people that need it most.

Headshot_Jessica_Almy_for_PhilanTopicJessica Almy is director of policy for the Good Food Institute, a global nonprofit working to build a sustainable, healthy, and just food system. 

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