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By: Steve Hendershot March 19, 2012

Internet entrepreneurship is all about dreaming big and aspiring to launch the next Google, Facebook or Groupon. So it’s no surprise when tech entrepreneurs also include an ambitious social or philanthropic component in their businesses.

Robert Grosshandler has been at it since the dawn of the Internet. Mr. Grosshandler, 56, founded Internet retailer iGive.com in 1997. A portion of iGive purchases are donated to charity, a number that Mr. Grosshandler expects to exceed $1 million this year.

“People in tech businesses are able to do things that hadn’t been done before because technology has made it possible,” he says. It’s natural that when those entrepreneurs are also socially minded, they would look to tech for solutions, a trait Mr. Grosshandler says is especially common among younger entrepreneurs. “The Internet is where these people live, so that’s where they look to help the causes that are important to them.”

In a broad sense, tech entrepreneurs and philanthropists are after precisely the same thing: ideas that change the world. There’s also some personality overlap between techies and social entrepreneurs.

“The tech sector is known for fast innovation and for having resources available to support that (from investors) who aren’t risk-averse,” says Lauri Alpern, principal at Chicago-based Open Door Advisors Inc., a consultancy for social entrepreneurs—a recently coined term for the founders of businesses that aim to generate profit while solving social problems. “That makes tech an easy entry point for social entrepreneurs, who are also often highly innovative and willing to take big risks to launch new ideas and new ventures.”

Many tech entrepreneurs also believe in the power of businesses to transform society, whether it’s consumer behavior or altruism. They may be more likely to focus their charitable energy on a business with a philanthropic component than to invest time or money in a traditional, nonprofit charity. For that matter, they plan to make money at the same time.

“We’re starting to see a general shift where the idea is much more commonplace that businesses can both improve society while at the same time benefiting financially,” says James Epstein-Reeves, founder and president of Do Well Do Good LLC, a Chicago-based consultancy that helps corporations such as Allstate Insurance Co. and McDonald’s Corp. with cause-related marketing.

That describes Youtopia LLC, a Chicago-based startup whose app allows people to earn rewards for community service from their schools or employers. Earlier this month, Youtopia joined with the School District of Philadelphia to win a MacArthur Foundation-sponsored competition combining digital media and learning.

CEO Simeon Schnapper says Youtopia appealed to him for four reasons: It was charitable, he found the idea engaging, he saw the potential for substantial impact on society, and “there’s also the potential for profit and a nice exit.”

© 2012 by Crain Communications Inc.
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