On Leadership: Dead philanthropy?
Seth Goldman co-founded Honest Tea in 1998 with Barry Nalebuff, his professor at the Yale School of Management. The Bethesda-based company has been recognized for its growth and business practices.
Of course there's nothing wrong with charity, but the best way for companies to become good citizens is through the way they operate their business. Rather than putting a small percentage of revenue toward philanthropy, companies should be examining the impact of their product and how they spend the bigger dollars.
Switching from Styrofoam to post-consumer waste might help a packaging company make a more meaningful contribution to sustainability than a token donation to a environmental nonprofit. Investing in a local production facility or even a community bank could help support a local economy more effectively than a donation to a nearby jobs program.
At Honest Tea, our largest expenditures are on payroll, bottles and ingredients, so even though we support several wonderful nonprofits, our biggest impact comes from creating quality jobs with great benefits, finding ways to make our bottles lighter and with more recycled content, and developing relationships with organic and fair-trade suppliers.
Barry Salzberg is chief executive of Deloitte. He also is a member of Deloitte's U.S. Board of Directors, the Deloitte Touche Tohmatsu Global Executive Committee and the DTT Global Board of Directors.
Sure, most organizations, mine included, will continue to write checks, but that's not the end of what many are doing under the heading of corporate philanthropy or community involvement. In fact, I see a new beginning as businesses look to be far more engaged and strategic in how they work with nonprofits. What I find so exciting in this shift is the blurring of roles -- nonprofits and social entrepreneurs behave more like businesses, and for businesses, there is a sweet spot where social mission merges with the organization's strategic interests.
It's true that "just send the check" philanthropy has been flatlining for years -- the figure of about 1 percent of pre-tax profits for America's corporate giving has hardly moved for decades. But from experience, I know that close engagement with leading nonprofits makes a difference to my business and allows it to make a real difference in the results achieved by our nonprofit partners.
Our philanthropy is founded on helping nonprofits run better businesses. So we give them cash and multiply its value by providing skilled volunteers. That's just another side of our core mission -- what we do for our clients. It's part of our talent strategy because our people want to give back, so it helps us retain them. And it's part of our marketing strategy -- it helps us build the relationships that expand our business.
Oh, and it helps the nonprofits achieve more and grow stronger so they can continue to go on doing what they do. Having been directly involved in such efforts, I know how personally rewarding this can be. No more just passing the bucks then. Today, employees and leaders want to be engaged -- humanly engaged, peer-to-peer, with those whom we are helping.
William C. Taylor is co-founder of Fast Co. and author of "Mavericks at Work: Why the Most Original Minds in Business Win."
We live in a world that is defined by increasingly obsolete (and often false) choices: Are your products low-priced or high-quality? Is the goal of your organization to make money or have a positive impact in the world? For the best companies, these either-or choices are now both-and requirements. That's what makes business today so confusing, so challenging, and, when things click, so exciting and creative.
In any field, winning organizations don't just offer competitive products and services. They stand for important ideas -- ideas that reshape the sense of what's possible for customers, employees, investors and society. The most successful organizations don't just out-compete rivals; they redefine the terms of competition.
Oftentimes, the most original ideas -- ideas that create loads of wealth -- have a huge impact on society as well. Who cares what Southwest Airlines does for philanthropy (although I'm sure it does some great stuff), given that its growth and success have democratized air travel in the United States?
I'm sure Bill McGowan, the monopoly-busting innovator behind MCI Communications, did lots of impressive work with the fortune he made breaking apart the Bell System monopoly. But did anything he did with his corporate philanthropy hold a candle to the social revolution he started by helping to unleash the greatest explosion in communications the world has ever known?
The most successful businesspeople bring to their work a genuine sense of mission -- and that drives not just how they share wealth, but how they create that wealth. Corporate philanthropy is not irrelevant. But sharp distinctions between how you do business and how you serve society, how you make money and how you make a contribution, are irrelevant. That's an obsolete vestige of either-or thinking in a both-and world.