May firms engage in CSR, beyond the law? An affirmative though conditional answer seems appropriate. Can firms do so on a sustainable basis? Outside of monopolies and limited niche markets, the answer is probably negative. Should they carry out such beyond-compliance efforts, even when doing so is not profitable? Here – if the alternative is sound and effective government policy – the answer may not be encouraging. And the last question – do firms generally carry out such activities – seems to lead to a negative assessment, at least if we restrict our attention to real cases of “sacrificing profits in the social interest.”
But definitive answers to these questions await the results of rigorous, empirical research. …
Back in January, the BusinessWeek SmallBiz team asked readers to collaborate on its first annual roundup of the most promising social entrepreneurs in the U.S. The idea was to track down trailblazing companies, in operation for at least a year, that aimed to turn a profit while tackling societal problems. Over 200 impressive nominations streamed in, representing a range of industries and target markets.
McKinsey’s Social Sector Office, here’s a report on The Economic Impact of the Achievement Gap on America’s Schools:
The report finds that the underutilization of human potential as reflected in the achievement gap is extremely costly. Existing gaps impose the economic equivalent of a permanent national recession—one substantially larger than the deep recession the country is currently experiencing. For individuals, avoidable shortfalls in academic achievement impose heavy and often tragic consequences via lower earnings, poor health, and higher rates of incarceration.
What in the world does a comment about national security and civil liberties have to do with business or social enterprise? “In my study of highly successful leaders, I feel the most common theme, the most universal characteristic, is a form of thinking characterized by President Obama’s sentence,” Martin said. “Given a choice between two unsatisfactory outcomes,” a stellar leader finds a third way. He doesn’t choose. Instead, he “has the capacity to find a solution superior to either of the available options.”
Jacqueline Novogratz tells a moving story of an encounter in a Nairobi slum with Jane, a former prostitute, whose dreams of escaping poverty, of becoming a doctor and of getting married were fulfilled in an unexpected way.
Staying Late: Comparing Work Hours in Public and Nonprofit Sectors
Results indicate that managers in the nonprofit sector tend to work longer hours compared to state managers and that work hours are mitigated by external organizational ties, perceptions, and work histories.
D.light, a company cofounded by Sam Goldman, who spent four years in the Peace Corps in Benin before earning a master’s degree in business from Stanford University, is an example. Mr. Goldman started D.light with the mission of replacing millions of kerosene lamps now used in poor, rural parts of the world with solar-powered lamps.
Having used kerosene lamps himself while living in Benin, Mr. Goldman learned firsthand of kerosene’s problems — it is expensive, it provides poor light and it is extremely dangerous. When the son of his West African neighbor nearly died after suffering severe burns from spilled kerosene, Mr. Goldman said he realized he wanted to create a venture to solve both the social and economic problems caused by these lamps. His time in Benin also convinced him, he said, that only as a business could a project become large enough to reach the great number of people who use these lamps as their primary source of light.
“We could have done it as a nonprofit over a hundred years, but if we wanted to do it in five or 10 years, then we believed it needed to be fueled by profit,” he said. “That’s the way to grow.”
Social entrepreneurs are people who want to bring about non-routine projects, collaborations, or organizations where they didn’t previously exist in order to solve a perceived social problem. This is very different from working within an existing organization and using its official resources to bring about a particular result. An example might be a community activist who conceives of a storefront operation providing financial advice to local homeowners facing foreclosure. In order to bring this about, he or she needs to secure financial commitments from some potential partners, recruit expert volunteers from others, and gain cooperation from community neighbors to trust and use the service. And, finally, the project needs to deliver a reasonable percentage of its promised benefits — some number of troubled mortgage holders need to be successful in retaining their homes thanks to the service.