“An idea hit me: Why not create a for-profit business to help provide shoes for these children? Why not come up with a solution that guaranteed a constant flow of shoes rather than being dependent on kind people making donations? In other words, maybe the solution was entrepreneurship not charity.” Blake Mycoskie, TOMS Shoes
Although Blake and his TOMS shoes have spurred the whole concept of one-for-one business models, he isn’t alone nor the first to consider how business can be a cause.
With decreasing government funding for charitable causes (and I’m not saying this is necessarily a bad thing) and so many charities competing for individual’s attention, people who want to make a difference may be better off being entrepreneurs rather than social workers or not-for-profit managers. Blake’s quote tells us why: sustainability. Want to help, then you have to have a continuous flow of revenue to do so.
There are three key ways we see businesses aligning with this idea:
1. The TOMS Model.- One-for-one models. Buy something, something is given. Simple as that. It’s done with shoes, water, eyeglasses, blankets, meals, vaccines, even condoms. The list goes on. However, in the wake of business as a cause through one-to-one initiatives, there is speculation that these models may actual hurt in the long run by sabotaging local economies.
2. The Microsoft Model- Make a lot of money so you can give a lot of money. It’s simple, make a lot of money so that you can give away a lot of money (and time) to support needs. What do you think Bill and Melinda Gates spend most of their time doing now? It isn’t designing computer software. It is working to meet the needs across the globe through their foundation. Many for-profit companies, large and small, operate charitable foundations, while others give a certain percentage of their earnings to charity.
3. The Patagonia Model- Promote a social cause through your company message, product(s) and profits. With a desire to reduce consumption and waste the impacts our environment Patagonia started this campaign (see image below- subscribers click through) What happened? Profits are up. They sell fewer jackets that cost more, and should last forever, and by doing this they build a loyal brand of followers who are interested in the same thing they are, conservation.
In all of these cases, the purpose is dual: the profit and what the profit can do for the purpose.
In reality though, capitalism or free enterprise systems (with certain controls) where there is the incentive of profit to be made, is THE economic system that actually may be the single best way to reduce poverty in this world and fight the ills that result from it. History has shown that the to be best method for bringing a society, and therefore individuals, out of poverty is to give a person the opportunity to work for something worth working for- namely a profit (and this may be why the TOMS model may actually be hurting local economies). Because what does that profit produce? Self-sufficiency and independence. Then, some people will keep all they earn for him or herself, but most, as we can see by many models, find a way to give much of it back for the greater good.
So what should you or your organization do if you want to start or focus a business on capitalism with a conscience?
1. Identify your greater purpose. What is it that you want to impact and how is your business or how can you position a business to uniquely meet that purpose? Is it tackling poverty, world health issues, conservation, education, entrepreneurship? Define specifically what is you want to impact and get it on paper. You can’t move on to your how of impact until you define your what and why.
2. Learn.
a. Learn by reading about these different models and determine what the best fit for your organization. For the one-to-one model, read Blake’s Start Something That Matters as well as the pieces that show how this model may actually hurt- such as When Helping Hurts. For the Microsoft model, read Bill Gate Sr.’s, book Showing Up For Life. For a local model, read our Give Back Piece on Valley Rubber, LLC. For a piece on several models like Patagonia, read This FastCompany article.
b. Learn through education. Like Casey Gerald said in his graduation speech from Harvard Business School, if you want to find a method for helping the most today, then go to business school. You may not need to actually go to business school, but you do need to know how to design a business model that meets a market need through your product or service.
3. Create or revise your business plan so that it meets both the market need and the greater purpose you have in mind. For some great resources to do a business plan, visit score.org.
What cause is closest to your heart and what business(es) are doing something about it? My guess is you buy from them.
