A World of Difference

Magic Carpet Ride

James Tufenkian decided at age 14 that his life's mission was to make a difference in the world. He thought he could achieve that by going into law, but Tufenkian's short time with a carpet wholesaler before attending law school intrigued him enough to toy with the idea of a carpet business. It wasn't until a graduation trip after finishing law school that he returned to the idea. After querying Kathmandu World Bank's Trade Promotion Center for someone knowledgeable in carpet weaving, he met Tsetan Gyurman in Nepal, a skilled craftsman and weaver who had been exiled from his homeland of Tibet. Equally impressed by Gyurman's exquisite carpet creations as by his efforts to employ street kids and Tibetan refugees in his textile business, Tufenkian, then in his early 30s, left a budding career in law. In 1986, he started Tufenkian Carpets, with Gyurman in charge of manufacturing.

Troubled by the working conditions in Nepal, Tufenkian put as much emphasis on treating and paying employees fairly as on attracting good weavers who could perform at advanced levels of craftsmanship. He established his business philosophy, called Necessarily Ethical Economic Development, or NEED, to set forth his objectives. Offering on-site housing, a profit-sharing program, and a medical complex serving employees and people in the area, Tufenkian also built a Montessori school for his employees' children, as well as a company water purification plant and waste treatment facility. These many acts of benevolence were only the beginning.

When Tufenkian saw the devastating effects of the fall of the Soviet Union, he resolved to help: "I sat in my expensive apartment in New York [City], thinking 'How [can] I enjoy the benefits of my business when Armenians have no electricity, no transport of goods?' It was impossible."

Visiting his ancestral homeland of Armenia in 1991, he brought several Tibetan craftsmen and revived ancient Armenian carpet weaving through his business, which now employs more than 2,000 people in Armenia and nearly 10,000 in Nepal. Tufenkian also started the Tufenkian Foundation, with about 15 different programs to benefit Armenian society; Armenian Forests, a nongovernmental organization to stop deforestation; and Tufenkian Heritage Hotels, with three locations open so far, to drive tourism to Armenia.

His showrooms in Hackensack, New Jersey; Los Angeles; New York City; and Portland, Oregon, display the fine works made by artisans in his facilities in Armenia and Nepal. Their work is sold in the very high-end market, which Tufenkian says easily absorbs the costs associated with the numerous programs and projects he supports.

Though his story is told in his company's catalog and on his Web site, the modest Tufenkian, now in his late 40s, shies away from overblown publicity. "The people who find out are proud to participate by buying the product," he says. As for his involvement, he declares, "It's made my life and work worthwhile." If entrepreneurs truly want to make a difference, they "have to make it a rule. This is part of my business."

One Percent Inspiration
One percent may not sound like much, but to Marc Benioff, 39, founder of Salesforce.com and co-author of Compassionate Capitalism: How Corporations Can Make Doing Good an Integral Part of Doing Well, it could equal much more. Urging other corporations to adopt his integrated philanthropy model of a 1 percent solution-donating 1 percent of the company's time, equity and profits to help the people and communities the business serves-he's used his own company as an example. Salesforce.com gives employees six days a year of paid time to volunteer and has used company profits to offer nonprofit organizations its CRM product for free.

Benioff fully integrated the Salesforce.com Foundation, a 501(c)3 charity, into his business from the start. Full-time foundation employees are found everywhere Salesforce.com does significant business, offering underprivileged children access to technology and media.

According to Benioff, the 1 percent solution can work for any business. "We scaled our foundation symmetrically, because the model dictates that the foundation grows parallel with the company," he says. "In today's world, you cannot be a leader in your industry without being a leader in your community."

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This article was originally published in the October 2004 print edition of Entrepreneur with the headline: A World of Difference.

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