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	<title>Profit and Purpose</title>
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		<title>Focus on Finances and Feedback: Lessons From a Social-Venture Boot Camp</title>
		<link>http://philanthropy.com/blogs/profit-and-purpose/focus-on-finances-and-feedback-lessons-from-a-social-venture-boot-camp/27205</link>
		<comments>http://philanthropy.com/blogs/profit-and-purpose/focus-on-finances-and-feedback-lessons-from-a-social-venture-boot-camp/27205#comments</comments>
		<pubDate>Mon, 06 Aug 2012 14:01:22 +0000</pubDate>
		<dc:creator>Scott Henderson</dc:creator>
		
		<guid isPermaLink="false">http://philanthropy.com/blogs/profit-and-purpose/?p=27205</guid>
		<description><![CDATA[A meeting that puts together people from the world of finance, philanthropy and social enterprise shed light on what matters most to a successful start-up.]]></description>
				<content:encoded><![CDATA[<p>No matter how much nonprofits try to incorporate the world of finance into their work, it’s rare that venture capitalists, grant makers and social entrepreneurs meet together to discuss their work.</p>
<p>That’s why the <a href="http://unreasonableinstitute.org/">Unreasonable Institute</a>, a three-year-old social venture, brought 75 investors and grant makers to Boulder, Colo., this summer to spend two days with social entrepreneurs attending a six-week boot camp on getting an enterprise off the ground.</p>
<p>The 22 social entrepreneurs came from five continents; some work on for-profit ventures, others on nonprofits projects. Among their missions: helping farmers in Africa get better crop prices; inventing more efficient stove tops for people in developing countries; turning waste into fuel; and recycling plastic bags into high-fashion products.</p>
<p>At the end of the institute’s previous two boot camps, the entrepreneurs piled onto a bus bound for San Francisco to pitch potential investors. Although the effort provided them with feedback, it yielded no immediate investments and little in the way of continuing interactions with investors. So this year, the Unreasonable Institute organized sessions in which investors and social entrepreneurs could work side by side to evaluate and improve the various ventures, and then talk about money.</p>
<p>As I participated in the event and spoke with foundation grant makers and traditional investors, I explored what lessons nonprofits and other social-impact start-ups could learn from this experience. Among them:</p>
<p><strong>Value financial expertise.</strong> A compelling social mission and great examples of how an organization has changed the world can only go so far. Sharing sound financial projections, calculating costs and measuring return on investment can be the difference between propelling conversations with grant makers and financiers or stopping them in their tracks, says Jennifer Pryce, managing director of strategic initiatives at the Calvert Foundation.</p>
<p><strong>Be open to feedback.</strong> The social entrepreneurs put their passion-filled ideas on the table and opened themselves up to criticism as well as praise. This took courage. But they took the feedback to heart, knowing it would help strengthen their venture, even if it meant a significant shift in strategy.</p>
<p><strong> Explain your project clearly and concisely. </strong>The entrepreneurs had two opportunities to explain their work: Each wrote a two-page summary about his or her  venture and presented a  one-minute “elevator speech.” Based on those presentations, the investors and grant makers chose four social entrepreneurs they wanted to work with over the following two days. If the summary and pitch weren&#8217;t clear, an entrepreneur was likely to have missed out on a valuable opportunity.</p>
<p><strong>Find unlikely partners</strong>. Meeting new people with shared interests can mean finding unlikely partners and opportunities. This happened over and over again as people worked together, chatted in the hallway, walked to meals and talked over coffee. Especially in these tough times, charities should look beyond the usual candidates to find new allies who can open doors for them.</p>
<p>The Unreasonable Institute’s new boot-camp approach worked: Investors and grant makers made initial commitments of more than $300,000, and some investors were talking about providing as much as $1-million more in coming months. In addition, some have offered non-financial support, such as introductions to potential investors and partners and offers to serve as board members.</p>
<p>How do these lessons apply to your work? Let us know in the comments section below.</p>
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		<title>Young Entrepreneurs Choose to Do Good as Well as Make a Profit</title>
		<link>http://philanthropy.com/blogs/profit-and-purpose/young-entrepreneurs-choose-to-do-good-as-well-as-make-a-profit/27145</link>
		<comments>http://philanthropy.com/blogs/profit-and-purpose/young-entrepreneurs-choose-to-do-good-as-well-as-make-a-profit/27145#comments</comments>
		<pubDate>Mon, 02 Apr 2012 16:24:44 +0000</pubDate>
		<dc:creator>Scott Henderson</dc:creator>
		
		<guid isPermaLink="false">http://philanthropy.com/blogs/profit-and-purpose/?p=27145</guid>
		<description><![CDATA[College graduates no longer have to choose between a career path of making profits and one of doing good. They can choose to do both.
]]></description>
				<content:encoded><![CDATA[<p>The growth of new business models that both turn a profit and do good gives those who are entering the professional world a new choice.</p>
<p>College graduates, for example, no longer have to choose between a career path of making profits and one of doing good. They can choose to do both.</p>
<p>I attended the recent <a href="http://www.socialenterpriseconference.org/">Social Enterprise Conference</a> at Harvard University to meet with young entrepreneurs who have started hybrid ventures that combine business principles with social good. I was particularly struck by the young social entrepreneurs who were a part of a keynote panel.</p>
<p>All of them have created interesting ventures that seek to address problems they&#8217;ve encountered in their efforts to make a difference. And their stories offer an interesting look at how and why some people are turning their passion for changing the world into for-profit ventures.</p>
<p>The panel&#8217;s moderator was <a href="http://unreasonableinstitute.org/profile/depstein/">Daniel Epstein</a>, founder of the <a href="http://www.unreasonableinstitute.org/">Unreasonable Institute</a>, which gathers 25 entrepreneurs from around the globe in Boulder, Colo., for an intensive six-week summer program that aims to accelerate their social ventures.</p>
<p>Mr. Epstein is an avid believer in entrepreneurship—he had already created three ventures by the time he got his undergraduate degree. He started two others before creating the Unreasonable Institute, a social venture to gather others like him who wanted to use profit to drive change.</p>
<p>Joining him on the panel were three other social entrepreneurs:</p>
<p><strong>Kavita Shukla</strong><strong>,</strong> an inventor and the founder <a href="http://www.fenugreen.com/">Fenugreen</a>, the producer of FreshPaper, a product that extends the freshness of produce. Revenues generated through sales help to support the research and development of more solutions to further reduce the global issue of food spoilage.</p>
<p><strong>Taylor Conroy</strong><strong>,</strong> the creator of a turnkey online fundraising platform that has been successfully tested and will be made available for any individual or charity to use when it&#8217;s completed.</p>
<p><strong>Lauren Bush Lauren</strong><strong>,</strong> co-founder of <a href="http://www.feedprojects.com/">Feed Projects</a>, a company that makes and sells luxury fashion handbags and other items to help raise awareness and money for the U.N. World Food Program, Unicef, and other charities.</p>
<p>In listening to their panel conversation and speaking with each of them afterward, I was struck by the fact that none of them followed a traditional route to address problems. Specifically, Ms. Shukla initially wanted to give FreshPaper away as a charitable venture. But she couldn&#8217;t find any organizations interested in supporting it. Ms. Lauren, a fashion design student, had the original idea for the Feed 1 bag while she was an ambassador for the World Food Program, but she found the organization wasn&#8217;t equipped to lead the effort.</p>
<p>In both cases, they found more success selling their products and using the proceeds to help promote change.</p>
<p>While some bemoan the continual growth of the number of nonprofits and others are suspicious of the motives of for-profit social enterprises, these young entrepreneurs&#8217; stories paint a different picture.</p>
<p>All of these ventures share the same desire: to create a positive social impact. While the routes are different, the goal is the same.</p>
<p>Perhaps it&#8217;s time for us to recognize that the proliferation of new nonprofits and social ventures is more a reflection of increasing social needs and the incumbent organizations&#8217; inability to meet those needs using existing structures.</p>
<p>What do you think? What role can social entrepreneurs play in solving social issues? Is it possible to create social impact if you also want to make a profit?</p>
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		<title>How to Use Technology to Inspire Good Habits</title>
		<link>http://philanthropy.com/blogs/profit-and-purpose/groups-use-technology-to-inspire-healthy-habits/27114</link>
		<comments>http://philanthropy.com/blogs/profit-and-purpose/groups-use-technology-to-inspire-healthy-habits/27114#comments</comments>
		<pubDate>Wed, 08 Feb 2012 00:01:05 +0000</pubDate>
		<dc:creator>Scott Henderson</dc:creator>
		
		<guid isPermaLink="false">http://philanthropy.com/blogs/profit-and-purpose/?p=27114</guid>
		<description><![CDATA[Two organizations are blending charity and business to develop creative ways to inspire people to change the way they live.]]></description>
				<content:encoded><![CDATA[<p>Two organizations have recently set out to use technology to help people adopt healthier habits.</p>
<p>While one is a nonprofit and the other a company, both are blending charity and business to develop creative ways to inspire people to change the way they live.</p>
<p><strong>Choose You: American Cancer Society</strong></p>
<p>The American Cancer Society&#8217;s <a href="http://www.chooseyou.com/">Choose You</a> effort uses online tools to urge &#8220;women to put their own health first in the fight against cancer.&#8221; Individuals are invited to choose personal goals for one of five categories: Eat right, get active, quit smoking, get regular checkups, and protect your skin.</p>
<p>Choose You challenges each participant to set an eight-week goal. Anyone who falls short can make a commitment to donate money to the American Cancer Society.</p>
<p>The participant chooses a friend or family member to serve as &#8220;referee&#8221; and help keep her accountable. And to help provide support and encouragement, participants can invite friends and relatives to come along for the journey.</p>
<p>To help drive awareness and traffic, the American Cancer Society enlisted Sprite Zero and Walgreen&#8217;s as sponsors and have started a Choose You at Work program to make it easier for employers to encourage their staff members to participate.</p>
<p><strong>DailyFeats Builds a &#8216;Coalition of Good&#8217;</strong></p>
<p>Brothers and entrepreneurs Veer and Vinay Gidwaney started <a href="http://www.dailyfeats.com">DailyFeats</a> in late 2009 with the idea that change starts with small actions and simple positive choices that people make every day.</p>
<p>And, like the American Cancer Society, they offer gamelike incentives to people who are trying to change their habits.</p>
<p>In this case, users can go online or use their smartphones to record simple &#8220;feats&#8221; such as taking the stairs, flossing, or getting to bed early.</p>
<p>Users can schedule daily or weekly reminders of the goals they want to accomplish—in essence, creating a check-in platform for healthy habits.</p>
<p>Each feat completed generates reward points that users can redeem in the form of gift certificates or discounts with several major companies that are supporting the effort.</p>
<p>Users also have the option of giving their points to charity. Cigna, for instance, offers users the chance to donate $1 for every 50 points they accrue through the site to the American Heart Association; JDRF, which serves people with diabetes; P2V, which matches military veterans who have PTSD with shelter dogs;<strong> </strong>Prevent Cancer Foundation; or Save the Children. Tommy Hilfiger will make a $10 contribution to the Millennium Promise to help end global poverty for every 500 points redeemed.</p>
<p><em> </em></p>
<p><strong>Using New Tools to Stay Relevant</strong><br />
As online and mobile tools make it easier for people to connect, companies and charities will need to find new ways to stay relevant. Choose You and DailyFeats show there are new, different ways for companies and charities to help individuals consumers.</p>
<p><em>What do you think? Have you tried Choose Your and DailyFeats? Will they make a difference?</em></p>
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		<title>Social Business: A More Sustainable Way to Help in Haiti?</title>
		<link>http://philanthropy.com/blogs/profit-and-purpose/social-business-a-more-sustainable-way-to-help-in-haiti/27080</link>
		<comments>http://philanthropy.com/blogs/profit-and-purpose/social-business-a-more-sustainable-way-to-help-in-haiti/27080#comments</comments>
		<pubDate>Tue, 20 Dec 2011 13:51:31 +0000</pubDate>
		<dc:creator>Scott Henderson</dc:creator>
		
		<guid isPermaLink="false">http://philanthropy.com/blogs/profit-and-purpose/?p=27080</guid>
		<description><![CDATA[A project to create social businesses is bringing new resources to support education in Haiti's poorest communities.]]></description>
				<content:encoded><![CDATA[<p>Children dressed in school uniforms sit in rows listening to one of their classmates sing a song while snacks are passed around. Two years ago, before a devastating earthquake struck the island, they were in a different location in a building that has since been demolished on a nearby plot of land here in Léogâne, Haiti.</p>
<p>Now these youngsters and their families are getting another chance with the help of an innovative antipoverty effort that combines business tactics with social goals.</p>
<p>Such new approaches are much needed in Haiti. Even before a devastating 7.0-magnitude earthquake hit the country in 2010, it faced profound structural issues: ineffective government, widespread poverty, and little educational opportunity.</p>
<p>Only half the children in Haiti actually start school, and just 1 percent complete their education through the secondary level. One of the biggest obstacles is the cost, since public education is not the norm and the average family lives on less than $2 a day.</p>
<p>At the Henri Christophe School in Léogâne, the epicenter of the 2010  earthquake, paying the costs of administrators, teachers, teacher training, school uniforms, and facilities falls largely to charities or to families of the students, many of whom lost loved ones and their livelihoods in the earthquake.</p>
<p>On a recent trip to Haiti, I watched how <a href="http://www.haitipartners.org">Haiti Partners</a>, a nonprofit group, supports the Henri Christophe School and six other schools in Haiti with money and training programs. This year, it has forged a partnership with the <a href="http://www.grameencreativelab.com/">Grameen Creative Lab</a> to help these seven schools create a more sustainable source of revenue than charity or family tuition payments: They are creating social businesses that will create money to cover education costs.</p>
<p>Grameen Creative Lab is a project of the Yunus Centre, which is led by the Nobel Peace Prize recipient <a href="http://en.wikipedia.org/wiki/Muhammad_Yunus">Muhammad Yunus</a>, and is supported by the <a href="http://www.clintonglobalinitiative.org/">Clinton Global Initiative</a>. These high-powered backers have helped gather $4-million from a handful of investors. The money goes to Haitians who need small loans to run and start social businesses.</p>
<p><strong><em>How Social Businesses Operate</em></strong><br />
Each social business in the Grameen project is owned by an association of local community members, which has a board of directors elected every two years. This structure keeps new members rotating onto the board. The association hires a full-time manager to run the business&#8217;s daily operations and hire staff members.</p>
<p>Social businesses are committed to paying fair wages and reinvesting the profits into further community development—in this case, paying for the schools. Ultimately, the social-business model is far more sustainable and empowering than simple aid and charity. Businesses give people the opportunity to improve themselves and their communities.</p>
<p>And because each social business is tied to a school, it is providing long-term economic support to its community. Each business is providing those living and working in the community with vital services and products that will help its residents rise above sustenance living to a degree of prosperity.</p>
<p><em><strong>Selling Poultry and Bread to Educate the Young</strong></em><br />
Working with leaders from the seven schools, Haiti Partners and Grameen Creative Lab have identified two opportunities for new social businesses. The first will bring the <a href="http://rallythecause.com/2011/11/20/postcards-from-haiti-day-three/">four Haiti Partners schools in Léogâne</a>, including the Henri Christophe school, together to start a poultry operation that will sell broiler chickens.</p>
<p>The second social business in development is a bakery for a Haiti Partners community school in Belle Platon on Gonâve Island. The community, which is located in one of Haiti&#8217;s most isolated places, has serious needs.</p>
<p>Community members in Bawosya, in the mountains four miles south of Port-au-Prince, have also started planning another social business to support <a href="http://openarchitecturenetwork.org/projects/hp">Haiti Partner&#8217;s Children&#8217;s Academy</a>, a school that is now under construction.</p>
<p><em><strong>The Formula</strong></em><br />
As I consider the long-term structural challenges facing Haitians, I have a growing sense of confidence for the role social business can play here. As outlined on the Grameen Creative Lab&#8217;s Web site, the<a href="http://www.grameencreativelab.com/a-concept-to-eradicate-poverty/7-principles.html"> 7 Principles of Social Business</a> offer a formula:</p>
<blockquote>
<ol>
<li><span style="font-style: normal;">Business objective will be to overcome poverty, or one or more problems (such as education, health, technology access, and environment) which threaten people and society; not profit maximization.</span></li>
<li><span style="font-style: normal;">Financial and economic sustainability.</span></li>
<li><span style="font-style: normal;">Investors get back their investment amount only. No dividend is given beyond investment money.</span></li>
<li><span style="font-style: normal;">When investment amount is paid back, company profit stays with the company for expansion and improvement.</span></li>
<li><span style="font-style: normal;">Environmentally conscious.</span></li>
<li><span style="font-style: normal;">Workforce gets market wage with better working conditions.</span></li>
<li><span style="font-style: normal;">&#8230;do it with joy.</span></li>
</ol>
</blockquote>
<p>This model has definite appeal in Haiti and other impoverished nations and might even be a model for communities in the United States.  At the very least, it can serve as an inspiration for new approaches and ideas.</p>
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		<title>When &#8216;Creative Swarms&#8217; Come to Aid Your Cause</title>
		<link>http://philanthropy.com/blogs/profit-and-purpose/when-creative-swarms-come-to-aid-your-cause/27047</link>
		<comments>http://philanthropy.com/blogs/profit-and-purpose/when-creative-swarms-come-to-aid-your-cause/27047#comments</comments>
		<pubDate>Wed, 30 Nov 2011 01:53:38 +0000</pubDate>
		<dc:creator>Scott Henderson</dc:creator>
		
		<guid isPermaLink="false">http://philanthropy.com/blogs/profit-and-purpose/?p=27047</guid>
		<description><![CDATA[Technology allows people to join together, often spontaneously, to call attention to a problem and collaborate to find a solution.]]></description>
				<content:encoded><![CDATA[<p>Online and mobile technologies have made it easier for people to champion their favorite causes and connect with others who share their passions.</p>
<p>Typically spontaneous in nature, &#8220;creative swarms&#8221; as they are often called, are collaborative efforts to shine a light on important issues and invite people who don&#8217;t necessarily known one another to work together to solve problems.</p>
<p>Edward Boches, chief innovation officer at the advertising agency Mullen, this week offered <a href="http://storify.com/edwardboches/the-swarm">an explanation</a> of this phenomenon:</p>
<blockquote><p>The Swarm is my new term for the digital echo chamber we live in. It’s an acronym for the Social Wave Amplified by Repetitive Media. We see it all the time. &#8230; Swarms emerge out of nowhere, create instant social buzz, a flood of content in the stream, then disappear as quickly as they arrived.</p></blockquote>
<p>Creative swarms can lead to novel solutions for charities since the participants bring different expertise and perspective. In August, <a href="http://madebymany.com">Made by Many</a>, a British digital-design company, and <a href="http://www.goodfornothing.co/home/">Good for Nothing</a>, a project organized by the Pipeline Project, started discussing how they could help provide famine relief in East Africa.</p>
<p>They decided to take a creative approach by stimulating swarms of people to raise money and attention through a project they called <a href="http://www.5050.gd/">50/50.</a> The effort sought to raise more than $1.5-million for the charity Unicef by inspiring 50 digital fund-raising projects over 50 days.</p>
<p>Here&#8217;s how <a href="http://www.5050.gd/">organizers explained the project</a>:</p>
<blockquote><p>50/50 is a collaborative experiment, a platform of 50 little bets: digital projects created and run by individuals and teams of makers. Each project aims to engage a network of supporters to help spread the word and generate as much money for famine aid as possible.</p></blockquote>
<p>Tim Malbon, a partner at Made by Many and one of the project&#8217;s organizers, <a href="http://madebymany.com/blog/introducing-faminefriday">chronicled the experience in a blog post this month</a> and outlined plans to focus on the most promising ideas that resulted from 50/50.</p>
<p>Three of the ideas generating the most buzz and raising the most money in the initial stage:</p>
<p><a href="http://www.5050.gd/projects/good-shirts">Good Shirts</a>. A collaboration of BBH New York, Unicef U.S. Fund, the artists Christine and Justin Gignac, and Threadless offer custom-designed T-shirts to raise money.</p>
<p><a href="http://www.buymytronics.com/phone2food.aspx">Phone2Food</a>. A program that collects discarded mobile phones and donates the value of those phones to charity.</p>
<p><a href="http://swearjar.cc/">Online SwearJar</a>. Offers people on Twitter a way to make a small donation each time they use a curse word in their Twitter posts.</p>
<p>What&#8217;s most remarkable about this effort is that Unicef had nothing to do with its creation. Instead, the organizers chose Unicef as the beneficiary of their collective creativity and then reached out to the charity.</p>
<p>Participants were challenged to promote their ideas to people in their social networks.  While this networked approach to innovation might scare more conservative nonprofits, we can all expect more creative swarms to appear.</p>
<p>What can your organization do to attract creative swarms? What are the risks and benefits of working with them?</p>
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		<title>Companies Take Fresh Approaches to Solving Social Issues</title>
		<link>http://philanthropy.com/blogs/profit-and-purpose/companies-take-fresh-approaches-to-solving-social-issues/26991</link>
		<comments>http://philanthropy.com/blogs/profit-and-purpose/companies-take-fresh-approaches-to-solving-social-issues/26991#comments</comments>
		<pubDate>Wed, 09 Nov 2011 15:16:39 +0000</pubDate>
		<dc:creator>Scott Henderson</dc:creator>
				<category><![CDATA[Back to the Start]]></category>
		<category><![CDATA[Chipotle]]></category>
		<category><![CDATA[Chipotle Cultivate Foundation]]></category>
		<category><![CDATA[Coldplay]]></category>
		<category><![CDATA[Create Jobs for the USA Fund]]></category>
		<category><![CDATA[Indivisible]]></category>
		<category><![CDATA[Milton Friedman]]></category>
		<category><![CDATA[Starbucks]]></category>
		<category><![CDATA[Willie Nelson]]></category>

		<guid isPermaLink="false">http://philanthropy.com/blogs/profit-and-purpose/?p=26991</guid>
		<description><![CDATA[Starbucks and Chipotle are taking unusual approaches to deal with problems facing the jobless and family farmers.]]></description>
				<content:encoded><![CDATA[<p>Businesses used to play a large role in their communities. In small towns, villages, and neighborhoods, business owners and managers lived among their customers, suppliers, and workers.</p>
<p>But somewhere along the way, that changed. As technology evolved, companies became global. And many companies began following the economist Milton Friedman&#8217;s dictum: The only concern of a corporation is to increase the wealth of the shareholders.</p>
<p>But as the aftershocks of the global financial crisis continue to reverberate and the Occupy movement continues to grow, some corporations are returning to their roles as community leaders. Two notable efforts are worth exploring.</p>
<p><strong><em>Chipotle and the Family Farm</em></strong></p>
<p>Chipotle Mexican Grill, the national fast-food chain, has built itself around the concept of sustainable farming—making sure that it uses sustainable, locally grown ingredients at its restaurants. Earlier this year, however, the company decided to promote sustainable farming through a mix of creative marketing and philanthropy.</p>
<p>It started by producing &#8220;<a href="http://cultivatefoundation.org/get-involved/back-to-the-start">Back to the Start</a>,&#8221; a music video that featured Willie Nelson performing a song called &#8220;The Scientist&#8221; by the band Coldplay. The animated video detailed the problems with industrialized agriculture and outlined more sustainable farming practices. Proceeds of the sale of the song on iTunes went to benefit the foundation.</p>
<p>Last month, Chipotle extended its involvement in the cause through its annual Boorito fund-raising event—an effort that seeks to raise $1-million for the Chipotle Cultivate Foundation and Farm Aid, two organizations that work to help family farmers overcome economic hardships. Anyone wearing a Halloween costume inspired by the family farm could visit the local Chipotle and buy a meal for just $2. Chipotle contributed the $2 from the sale of these meals to the charities.</p>
<p><iframe width="640" height="360" src="http://www.youtube.com/embed/aMfSGt6rHos?feature=oembed" frameborder="0" allowfullscreen></iframe></p>
<p><strong>Starbucks Creating New Jobs in the USA</strong></p>
<p>While Chipotle is focusing on sustainable farming, Starbucks and its founder, Howard Schultz, have started a <a href="http://www.createjobsforusa.org/">project</a> selling bracelets with the word &#8220;indivisible&#8221; on them to raise money to provide small loans in poor communities.</p>
<p>To do this, the company is raising money through the new <a href="http://www.createjobsforusa.org/">Create Jobs for USA Fund</a>, which is operated by <a href="http://www.opportunityfinance.net/">Opportunity Finance Network</a>.</p>
<p>The Starbucks Foundation provided $5-million to the fund, and the company is heavily promoting the project in all of its stores to raise additional money. Starbucks customers can donate in its stores or online, and the company promises that every penny will go to charity.</p>
<p>Opportunity Finance Network is a network of community-development banks that invest in businesses that operate in needy communities. As part of the partnership with Starbucks, the organization plans to match every dollar donated by Starbucks customers with $7 in capital raised from other sources.</p>
<p>That means every $5 donated creates $35 in loans to small businesses.</p>
<p>Starbucks is giving bracelets to donors who contribute $5 or more to the effort—providing a symbol that seeks to get people talking about the cause outside of its stores. (Read more about <a href="http://philanthropy.com/blogs/innovation/a-star-turn-for-community-development-finance-institutions/232">this project</a> in our Mission: Innovation blog.)</p>
<p><iframe width="640" height="360" src="http://www.youtube.com/embed/Muh6I1TnVg4?feature=oembed" frameborder="0" allowfullscreen></iframe></p>
<p>Both companies are demonstrating how other companies can use their  resources, expertise, and size to help solve an underlying social issue,  not just write checks or produce some flashy, fleeting marketing  campaign.</p>
<p>What do you think about what Chipotle and Starbucks are doing? Does it mark a change in how companies give?</p>
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		<title>Purpose Is a Terrible Thing to Waste</title>
		<link>http://philanthropy.com/blogs/profit-and-purpose/purpose-is-a-terrible-thing-to-waste/26775</link>
		<comments>http://philanthropy.com/blogs/profit-and-purpose/purpose-is-a-terrible-thing-to-waste/26775#comments</comments>
		<pubDate>Wed, 08 Sep 2010 14:00:00 +0000</pubDate>
		<dc:creator>Anne Mai Bertelsen</dc:creator>
		
		<guid isPermaLink="false">http://philanthropy.com/blogs/profit-and-purpose/purpose-is-a-terrible-thing-to-waste/26775</guid>
		<description><![CDATA[<p>Nonprofits won't attract the talent they need unless they do more to spur innovative cultures and pay employees better wages.</p>]]></description>
				<content:encoded><![CDATA[<p>When I was young, I wanted to follow in my father&rsquo;s footsteps and make a difference. My father, an architect, was very involved in social causes as a founding member of the Committee of 1,000, which worked to help children orphaned during the war in Vietnam.</p>
<p>But, unlike my father, I wanted social good to be my vocation, not my avocation.</p>
<p>Armed with a couple of degrees&mdash;and corresponding student debt&mdash;I wanted to offer my passion, my purpose, and my endless supply of ideas and energy to a nonprofit. But the low pay&mdash;and the fact that many groups had organizational structures that thwarted innovation&mdash;forced me to give up my dream of a nonprofit career. I instead explored working in the for-profit world.</p>
<p>The world has changed significantly since my early-career decision. But most nonprofits still offer below-market salaries and remain maddeningly inhospitable to innovation.</p>
<p>If nonprofit organizations want to attract the best and brightest, and really solve social problems, they need to do more on both fronts. &nbsp;</p>
<p><strong>Living Wages</strong></p>
<p>While salaries for CEO&#8217;s of major nonprofits can be sizable, salaries for most nonprofit employees are modest compared with those that for-profit companies offer. This is especially the case for the best-educated employees who graduate from the top schools. Using 2007 data, the <a href="http://www.bls.gov/opub/cwc/cm20081022ar01p1.htm">Bureau of Labor statistics</a> found that managers in the private sector earned 22 percent more than their nonprofit counterparts.</p>
<p>Nonprofit organizations need to find ways to close the compensation gap to tap into the passion and purpose of potential employees. One option is to borrow from academe, government, and private think tanks by creating sponsored fellowships and tie those fellowships to innovation.</p>
<p>Charities could raise money to fund an individual or group of individuals to brainstorm new approaches to addressing the organization&#8217;s cause. Give the fellows the resources and access to all the information they need to think and act creatively, dissect the problem, and develop a new set of solutions.&nbsp;</p>
<p><strong>The Innovation Void</strong></p>
<p>Most nonprofit organizations have not institutionally embraced innovation; they lack a dedicated group whose sole focus is to brainstorm and develop creative new solutions or breakthrough approaches.</p>
<p>Instead, nonprofit organizations are structured and managed to optimize costs, minimize overhead, and attract new donors.</p>
<p>In the business world, leading companies like Apple, Google, GE, and IBM have made innovation a core pillar of corporate growth strategies.</p>
<p>In the case of Apple, CEO Steve Jobs helped return the company return to its culture of innovation by investing in new ideas &mdash;whether they be products or business models. &nbsp;Those innovations helped propel Apple from a computer company to a company&nbsp;that sells&nbsp;a huge&nbsp;digital entertainment library of music, books and video and a family of devices (iPods, iPhones and iPads) that can access that library.</p>
<p>Like Steve Jobs, IBM CEO Samuel J. Palmisano believes growth is intrinsically tied to innovation:</p>
<p>&#8220;The way you will thrive in this environment is by innovating&mdash;innovating in technologies, innovating in strategies, innovating in business models,&#8221; Mr. Palmisano told business leaders this year.</p>
<p><strong>Investing in Innovation: Patience Required</strong></p>
<p>Innovation doesn&rsquo;t always pay off immediately. In fact, many times, it requires patience and capital to generate ideas that over time may turn out to be breakthroughs. Other times, it can spawn ideas that are just dead wrong but provide learning all the same. The marketplace, after all, is full of failed innovations. &nbsp;</p>
<p>But it is also full of successes. For example, <em><a href="http://www.nytimes.com/2010/08/13/health/research/13alzheimer.html?_r=1">The New York Times</a></em> reported last month about a 10-year data-sharing collaboration among scientists, drug companies, and Alzheimer&#8217;s activists to uncover new information about the disease and its progression. That collaboration is now paying off with a new understanding of the disease and some promising drug trials that could help treat it.</p>
<p>Fostering innovation doesn&rsquo;t have to require huge investments. In fact, the private sector has used the Internet and its customers to create innovative solutions for their companies.</p>
<p>Companies like Starbucks and Dell are using the wisdom of their customers to brainstorm ideas for solving social problems.</p>
<p>The private sector has also entered the social-good space with contests that provide money to organizations that are working to address problems. The best of these contests&mdash;like the American Express inaugural Members Project in 2007 and Pepsi&rsquo;s Refresh Project&mdash;look for innovative ideas to fund and rely on the public to help them identify those ideas. &nbsp;</p>
<p><strong>Taking the Lead</strong></p>
<p>While the private sector has been the early mover, nonprofit groups are infinitely better qualified to frame these innovation challenges. They understand social problems. They know which strategies work&mdash;and which ones don&#8217;t. They can bring together supporters, staff members, volunteers, and donors.</p>
<p>All of these constituencies have a vested interest in creating and nurturing innovative solutions to complex problems.</p>
<p>The <a href="http://www.challenge.gov/">federal government</a> is using similar groups to uncover new ways to share data, enhance public access to government information, and reduce fraud and waste. It&rsquo;s an approach that foundations like the <a href="http://www.xprize.org/">XPrize Foundation</a> and the <a href="http://www.newschallenge.org/">Knight Foundation&#8217;s News Challenge</a> have used to focus attention on underserved areas.</p>
<p>Finally, investing in innovation has the added benefit of positioning an organization as an exciting place to work.</p>
<p>This is particularly important for tapping into the passions of the millennial generation. Like their baby-boomer parents, they are interested in pursuing meaningful careers that offer intellectual challenge and the opportunity to generate new ideas, according to a recent <a href="http://millennialsinc.com/">study</a>.</p>
<p>As nonprofit groups look to the future, finding ways to offer more competitive salaries and opportunities to be innovative will help attract a new wave of people with passion, purpose, and ideas to lead the change the world needs.</p>
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		<title>In a Connected Society, Corporations Must Focus on the Social Good</title>
		<link>http://philanthropy.com/blogs/profit-and-purpose/in-a-connected-society-corporations-must-focus-on-the-social-good/26469</link>
		<comments>http://philanthropy.com/blogs/profit-and-purpose/in-a-connected-society-corporations-must-focus-on-the-social-good/26469#comments</comments>
		<pubDate>Thu, 26 Aug 2010 15:49:25 +0000</pubDate>
		<dc:creator>Scott Henderson</dc:creator>
		
		<guid isPermaLink="false">http://philanthropy.com/blogs/profit-and-purpose/in-a-connected-society-corporations-must-focus-on-the-social-good/26469</guid>
		<description><![CDATA[<p>Savvy corporations understand that how a company makes its profit matters and what it does to solve broad social problems is what determines shareholder value.</p>]]></description>
				<content:encoded><![CDATA[<p>&#8220;The Case Against Corporate Social Responsibility,&#8221; by Aneel Karnani, associate professor of strategy at the University of Michigan, appeared this week in a special supplement of&nbsp; <em><a href="http://online.wsj.com/article/NA_WSJ_PUB:SB10001424052748703338004575230112664504890.html" target="_blank">The Wall Street Journal,</a></em> produced in collaboration with&nbsp;<a href="http://sloanreview.mit.edu/executive-adviser/articles/2010/3/5231/the-case-against-corporate-social-responsibility/" target="_blank">MIT Sloan Management Review</a>.&nbsp;</p>
<p>In the article, Dr. Karnani argues that corporations that focus on social responsibility will &#8220;delay or discourage more effective measures to enhance social welfare&#8221; and characterizes these efforts as a tax on shareholders.<em><br /></em></p>
<p>With all due respect to Dr. Karnani, the argument he put forth is wrong. Moreover, his essay has exposed the futility of an ideological debate pitting the free market against the common good as if they were wholly separate entities. &nbsp;</p>
<p>This is not a hypothetical conversation. The world is full of real problems that threaten the corporate sector.</p>
<p>We face unconventional threats and irregular enemies, and we spend enormous sums at home and abroad for a semblance of security in which to conduct business. &nbsp;</p>
<p>While we may have averted a financial catastrophe, we are plagued by high unemployment, our natural resources are under siege, and our social safety nets are clearly stressed. And there are those who argue that our institutions&mdash;government, media, educational organizations, and even corporations&mdash;are not up to the task of solving these grave problems.&nbsp;</p>
<p>Dr. Karnani&rsquo;s argument relies on an obsolete framework that assumes the free market requires managers to maximize profit and create enduring value for shareholders regardless of the corporation&rsquo;s social impact. While this has defined the debate for the previous century, it will not and cannot define the future because of one undeniable fact: profit and shareholder value are not created in a vacuum.</p>
<p><strong>The Changing Roles of Institutions</strong></p>
<p>The proliferation of online and mobile communication offers myriad new tools and channels through which to debate social issues. These tools, however, do not solve problems on their own. &nbsp;</p>
<p>To understand and address the complex challenges that exist in the world today, we need a new framework of thinking and approach. &nbsp;</p>
<p>We need to recognize that the ubiquity of technology and the increasing speed at which information travels does not just shift how we communicate, connect, and collaborate but it also fundamentally changes the nature and work of the institutions that exist within our society. &nbsp;</p>
<p>The tools that empower a more active, engaged global citizenry can create new opportunities to solve old challenges when combined with reorganized and refocused institutions. &nbsp;</p>
<p>We are witnessing the rise of a more nuanced, multidimensional marketplace that is breaking monolithic entities into groups of networked individuals.</p>
<p>People and organizations that choose to ignore this reality and cling to their ideology will be doomed to fail. The one-to-one conversation is not between artificially constructed corporate brands and the collective populace, it is between corporate brand ambassadors (internal and external) and individual consumers. This shift requires a new framework and new approaches to profit, enduring value, and social responsibility.</p>
<p>Dr. Karnani&rsquo;s case and two other recent high-profile editorials in <em><a href="http://www.washingtonpost.com/wp-dyn/content/article/2010/07/16/AR2010071604070.html" target="_blank">The Washington Pos</a><a href="http://www.washingtonpost.com/wp-dyn/content/article/2010/07/16/AR2010071604070.html" target="_blank">t</a></em> and <em><a href="http://online.wsj.com/article/SB10001424052748703724104575378831827395038.html" target="_blank">The Wall Street Journal</a></em> assailing corporate social responsibility efforts fail to recognize this fundamental shift. But they aren&rsquo;t alone. Most corporations, nonprofit groups, and government entities are trying to solve the world&rsquo;s problems using structures and systems designed on past experiences, not present and future possibilities. &nbsp;</p>
<p><strong>New Ways to Determine Value</strong><em><strong><br /></strong></em></p>
<p>Dr. Karnani&#8217;s argument also fails to realize profit derived from extracting value at the expense of employees, customers, and the greater social good leads only to profits in the short term, not enduring value over the long term. &nbsp;</p>
<p>Now that employees, customers, shareholders, watchdogs, and government regulators all have access to easy-to-use media tools and ubiquitous access to the Internet and handheld devices, it is much more difficult to hide from the glaring spotlight that can erase shareholder value overnight. Corporate leaders need to embrace the cleansing properties of sunlight and find new ways to create profit and enduring value for shareholders.</p>
<p>Dr. Karnani and I do share common ground on one fundamental point: Corporate social responsibility is a vague concept.</p>
<p>Like so many other worthy, and necessary, elements of corporate life in the digital age, the terminology related to corporate social responsibility has become unclear. Such a variety of practices have been lumped under the same umbrella concept that it is difficult to understand what is, and is not, part of the conversation.</p>
<p>Historically, corporate social responsibility programs, along with corporate philanthropy, government affairs, and cause-marketing activities, have been sequestered in different silos within corporate structures. They have been kept away from operational decision making, seen instead as a marketing opportunity or a reputation management necessity. This type of approach and thinking is inherently flawed&mdash;especially when the world is no longer about controlled messages and imagery.</p>
<p>Earnest concern for the common good is not a dangerous illusion; it is the cost of doing business in a connected society. &nbsp;</p>
<p>In the broadcast era, the distance between the boardroom and the kitchen table was much greater and shielded managers from the scrutiny of the community. In a connected society, how a corporation makes its profit and how it helps address wider social problems matter. The more connected we become, the more aware those who make profit possible are aware of who is adding to the social burden, who is ignoring community problems, and who is working to create solutions for them. &nbsp;&nbsp;</p>
<p><strong>The Financial Opportunity of Creating Social Good</strong></p>
<p>Characterizing corporate social responsibility as a tax on shareholders misses its true financial opportunity for corporations.</p>
<p>Effective corporate social responsibility recognizes the importance of strengthening and buttressing the community, which makes profit and enduring value possible. &nbsp;</p>
<p>The savvy corporations understanding their refocused role will not settle for lip service and lukewarm commitments. Rather, the vanguard will raise the standards of success to new heights, thereby opening the doors to exponential growth of profit and shareholder value.&nbsp;</p>
<p>For taking on their redefined role, the connected society will reward savvy corporations with sustained growth fueled by the attraction and retention of talent, intellectual property spun off from efforts to solve vexing social issues, capital influxes from socially responsible investment funds, increased value of the brand, and the invitation to enter new, burgeoning markets in need of their products, services, and social commitment. &nbsp;</p>
<p>Like the real problems facing the world, these growth factors are not hypothetical. They are real opportunities. Just ask IBM about the $3 return on investment it gets for every $1 invested in corporate-citizenship initiatives.</p>
<p>Do all corporations need to be socially responsible in a connected society? No, just the ones that want sustained profits and increased shareholder value.</p>
<p><em>Scott Henderson is managing principal of&nbsp;</em><a href="http://causeshift.com/" target="_blank"><em>CauseShift</em></a><em>, a consulting company with offices in Boston and New York. He has worked with Procter and Gamble, Unicef, and </em><a href="http://wecanendthis.com/" target="_blank"><em>wecanendthis.com</em></a><em>, a yearlong effort to spark innovation in efforts to fight hunger.&nbsp; He is publisher of the blog&nbsp;</em><a href="http://rallythecause.com/" target="_blank"><em>rallythecause.com</em></a><em>&nbsp;and writes the Profit and Purpose blog with his partners, Anne Mai Bertelsen and Brian Reich.</em></p>
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		<title>Let&#8217;s Find a New Way to Recover From Crises</title>
		<link>http://philanthropy.com/blogs/profit-and-purpose/lets-find-a-new-way-to-recover-from-crises/26169</link>
		<comments>http://philanthropy.com/blogs/profit-and-purpose/lets-find-a-new-way-to-recover-from-crises/26169#comments</comments>
		<pubDate>Thu, 12 Aug 2010 17:14:04 +0000</pubDate>
		<dc:creator>Brian Reich</dc:creator>
		
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		<description><![CDATA[<p>Why the nonprofit world and other institutions need to find new ways to deal with disasters and other crises.</p>]]></description>
				<content:encoded><![CDATA[<p>In a <a href="http://philanthropy.com/blogPost/Lessons-From-the-Gulf-Oil/26107/" target="_blank">recent post</a>, I discussed how companies, charities, and individuals fell short in their response to the Gulf of Mexico oil spill.</p>
<p>Today I&#8217;d like to discuss how we can take a totally new approach&mdash;one with a different focus and a more ambitious, and important, list of goals in mind.</p>
<p>Nonprofit organizations, corporations, and individuals could have mobilized to do something that no single institution is equipped to do&mdash;deal with a major crisis by sharing the information people need to take real action. They could have developed reasonable alternatives to old, tired methods taken by government and other leaders.&nbsp;</p>
<p>How might you put together such a powerful collaborative effort, based on the problems caused by the oil spill? Here are some of the key steps: <strong></strong></p>
<p><strong>Launch an independent effort</strong> to assess the response to the oil spill, focusing on areas that President Obama&#8217;s commission won&#8217;t. This commission has serious limits in terms of its scope and focus. The commission is similar to ones appointed following 9/11, the explosion of the Space Shuttle Challenger and the Three-Mile Island disaster. If history is a guide, this new commission will fail to develop any public recommendations on how to better handle future crises. Nor will there be public hearings that discuss future solutions. <br /><strong></strong></p>
<p><strong>Include a different set of experts and innovators</strong> to research and analyze the situation and tap into the broad base of individuals who are interested in fixing these issues. In short, do everything the commission does&mdash;conduct hearings, interview experts, solicit public input, and publish a final report&mdash;but do it better. <strong></strong></p>
<p><strong>Embrace transparency </strong>by conducting the operations in full view and sharing information.&nbsp; <strong></strong></p>
<p><strong>Fill in the gaps</strong> that exist in the presidential commission&#8217;s work and give serious consideration and thoughtful support to ideas that might otherwise be dismissed.&nbsp; <strong></strong></p>
<p><strong>Break new ground</strong> by acknowledging the mistakes that created this crisis and figuring out how to learn from them.&nbsp;<strong></strong> <strong></strong></p>
<p><strong>Look forward </strong>at the ways we can prepare better for future disasters and put the nation on a reasonable and achievable track of ending our dependence on oil. <strong></strong></p>
<p><strong>Share the findings </strong>on every conceivable platform available, in formats that average (read: non-wonky) people can easily consume and actively share and mash up.&nbsp;</p>
<ol> </ol>
<ol> </ol>
<p>Not only is this approach assured to provide a different set of insights and a valuable new way of thinking about how to respond to the oil spill but each step will serve as another critical piece of an evolving discussion.</p>
<p>As the data and lessons from the crisis are consumed and put to use, new innovations and models will be created, tested, and explored. As a result, the process of completing the work and publishing the findings will be just as important as the final result.</p>
<p>We all know that rhetoric and reality in this kind of situation are not in complete alignment. The nation will never be 100-percent fossil-fuel independent&mdash;so we should seriously consider what a future that involves the use of oil (and therefore drilling and prospects of future spills) should look like.</p>
<p>As technology advances, it&rsquo;s more than possible to find ways to improve the machinery we use to explore, find, and extract oil.</p>
<p>And if we are ever going to assess and mitigate the damage, we should find better ways to accurately track how we measure it.</p>
<p>The money being raised by nonprofits does not solve the problems that have been created. And the lessons that we are learning are not setting us up to address future challenges in different or better ways.</p>
<p>Creating a parallel effort to promote solutions will produce more than just another report: This kind of effort will help set off a powerful new wave of thinking about how to address causes and respond to disasters.</p>
<p>Those who take on this responsibility to lead will set the tone for others, making it far easier for future generations to tackle even the most complex issues.</p>
<p>And, of course, everyone who failed to realize the opportunity to innovate, or to accept the responsibility to act, will now have even greater motivation when the next situation arises.</p>
<p>Will your organization take up this challenge?</p>
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		<title>Lessons From the Gulf Oil Spill</title>
		<link>http://philanthropy.com/blogs/profit-and-purpose/lessons-from-the-gulf-oil-spill/26107</link>
		<comments>http://philanthropy.com/blogs/profit-and-purpose/lessons-from-the-gulf-oil-spill/26107#comments</comments>
		<pubDate>Tue, 10 Aug 2010 01:13:00 +0000</pubDate>
		<dc:creator>Brian Reich</dc:creator>
		
		<guid isPermaLink="false">http://philanthropy.com/blogs/profit-and-purpose/lessons-from-the-gulf-oil-spill/26107</guid>
		<description><![CDATA[<p>Why the Gulf of Mexico oil spill represents a missed opportunity for nonprofit groups and companies to change the culture of disaster response.</p>]]></description>
				<content:encoded><![CDATA[<p>The oil spill in the Gulf of Mexico is over. The well has been capped.</p>
<p>There is no way to quantify the full extent of the environmental or economic damage&mdash;now, or possibly ever. But already we know that the response to this catastrophic event has not delivered the kind of radical shift in how we deal with disasters and respond to crises that was needed.</p>
<p>Why not? Simply put, the organizations and people who shared ideas, proposed solutions, and took action were doing so in their own self-interest. For example:</p>
<p>&bull; Nonprofit organizations raised millions of dollars for people hurt by the oil spill (and in the process expanded their own e-mail lists). But their efforts aren&rsquo;t really helping to rebuild the economy of the Gulf. &nbsp;</p>
<p>&bull; Cause-marketing campaigns helped to brand corporations as philanthropic and committed to serious issues. But the money they have contributed pales in comparison with other issues. And their commitments have come with strings attached. &nbsp;</p>
<p>&bull; Thought leaders and innovators have given speeches and penned editorials proclaiming the ways the Internet and technology can be used to organize and mobilize resources in response to the spill, but the ideas have not been backed up by meaningful, measurable actions.</p>
<p>Much has been made of the our connected society&#8217;s potential power&mdash;the availability of social platforms, the speed of information, and the increased commitment of people to promote social good.&nbsp;</p>
<p>But, as the oil spill showed, we aren&rsquo;t doing much to tap that potential. We are doing more and more of the same old things.</p>
<p>Responding to crises in the digital age demands different ideas and new voices&mdash;not applications of the same old concepts with a new wrapper, or the same kinds of limited thinking that has set our society up for even greater challenges in the future.</p>
<p>On Thursday I&#8217;ll discuss some possible new approaches. But in the meantime, I&#8217;d love to hear your thoughts.</p>
<p>What are some ways that we can use new tools to break the patterns that have limited our ability to respond to crises and disasters? Post a comment to share your thoughts.</p>
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