A World of Difference
For these entrepreneurs, social responsibility is the essence of their businesses. Here's how they're changing the world for the better.
"I am not an Athenian or a Greek, but a citizen of the world." -Socrates
Though Socrates expressed this idea more than 2,000 years ago, his words offer a glimpse into the future, where our global village is pulled tightly together through technology. But in creating a prosperous planet, one commodity has remained abundant: humanity. With the socioeconomic and political climate turbulent and in need of helping hands beyond appointed leaders, civic responsibility has now been embraced not only by individuals, but also by businesses.
The role of businesses in civic responsibility-actively working in communities for positive change-blows past charity donations and in-house recycling programs as businesses take an aggressive, hands-on approach to making change happen in their communities. Despite the tarnished image some business leaders have sustained in recent years, there are shining examples of those who work to build successful communities as well as successful businesses.
The most recent Cone Corporate Citizenship Study illustrates exactly how active a role Americans expect companies to play in society. Of those surveyed, 78 percent felt companies had a responsibility to support causes, and 84 percent said they decide which companies they want to see doing business in their communities based on companies' commitment to social issues.
Whether businesses enact community programs out of genuine concern isn't always clear, but there are benefits regardless, says Nancy Adcox, community relations chair of Raleigh, North Carolina's National Association of Women Business Owners chapter and founder of motivational training firm Xanzia Inc. One major benefit of starting service programs is enhancing employee morale. Says Adcox, "Employees have the need to search for meaning in their lives and to know they make a difference in the world."
Tony Massengale, director of the Center for Civic & Community Capacity Building in Pasadena, California, focuses on teaching civic standards and political competency to government/public agencies, philanthropic foundations and a broad spectrum of nonprofit groups. He has joined forces with civic business project Minnesota Active Citizenship Initiative (MACI) to promote civic organizing to all citizens and organizations as an approach for civic renewal. "Everyone has to ask themselves, What can we do to improve the quality of life for those on the margins?" he says. Massengale has found young entrepreneurs in particular to be sincere and enthusiastic about being civically responsible. But it's not just startups taking strides-the desire to have a profitable venture and help communities is widespread, regardless of what stage the business is at.
Something Good in Store
Kowalski's Markets, based in Woodbury, Minnesota, started in 1983 with the good values set forth by founders Mary Anne and Jim Kowalski. They built the business on the principles of great customer service and plenty of community-minded good deeds-but they never instituted a written policy.
All that changed in 2000, when the Kowalskis got a call from Peg Michels, co-author, with Massengale, of MACI's Civic Organizing Framework, a set of principles, standards and strategies that explains how MACI works. Michels, who had previously worked with Mary Anne in another civic/political organization, believed Kowalski's Markets fit well with the ideals MACI was trying to promote. Mary Anne was interested in MACI's organized approach to what she and her husband, 59 and 58, respectively, had done informally in their business. Her interest led to the Kowalskis not only collaborating with four other businesses on a MACI curriculum for teaching civic leadership to business leaders, but also using Kowalski's Markets as the pilot for the curriculum.
Employees of Kowalski's Markets were introduced to the principles, standards, teachings and language of the MACI curriculum in 2001. "We designed [a curriculum] we thought would be practical and would work," says Mary Anne. "Can you do this in business-be ethical, have integrity and think through things in a civic manner, know everything you do affects everybody else?"
The Kowalskis had an opportunity to flex their civic muscle when they purchased four store locations in 2002. One of the stores was located in Minneapolis' Camden neighborhood, a lower- to middle-class community unlike their typical upscale customer demographic. Rather than sell the property, the Kowalskis decided they had an obligation to provide a neighborhood grocery store to that community since the former tenant had failed to do so, and the civic experiment began.
The Kowalskis shared their vision of a community institution and their desire to create a neighborhood market during a Camden community meeting. Though the store had already opened, the Kowalskis offered residents of the neighborhood the power to name it and spend all the store profits as they wished. The Kowalskis promised a clean, safe store with good lighting and security, and removed cigarettes and lottery tickets from all their stores. In the spirt of partnership, the Kowalskis asked the community to show support by shopping there. The residents shocked the couple by stating they would rather have the store prosper and remain than take any profits, and the residents felt using the Kowalski's name would attract more stores and restaurants to the area. Pledging a three-year commitment, the couple promised that if they decided to sell the store due to a lack of profits, they'd sell it only to someone who would keep the community at heart.
Members of the Camden community placed voter-style placards on their lawns and businesses urging others to "shop your neighborhood grocer." While Kowalski's gives its usual sponsorships and donations to athletic teams and church groups in the area, it's also active in community festivals and publishes a "recipe of the week" in the local paper. Though the location has cash flowing in, it hasn't yet been profitable. The other eight Kowalski's Markets have helped push projected 2004 total sales to between $115 million and $125 million. However, the Kowalskis still see the Camden store as a success because it has fostered a sense of community. City council member Barbara Johnson says Kowalski's well-kept storefront has increased the attractiveness of the community. "It's considered an amenity. Realtors use it to promote homes, and it has definitely increased property values. It's been a great thing for us."
"[We wanted to see] if you can engage the rest of the community to take a civic look at things," says Mary Anne, "and [show them] that citizenship takes the work of the people, not just businesses going in and saving the world. It takes the customer, the individual, the citizen."
Some entrepreneurs are driven to build businesses helping others do good. While friends headed off to lucrative jobs during the dotcom heyday in 1999, UCLA students Ryan Ozimek, now 27, and Grey Frandsen, 26, were on a humanitarian relief trip to the Balkans during the Kosovar wars. Witnessing firsthand the problems the nonprofit community faced due to a lack of technology, the pair combined Ozimek's technology and policy skills with Frandsen's international and nonprofit experience, and founded PICnet Inc., a technology consulting firm for nonprofits.
PICnet's goal is to empower the missions of nonprofits through technology, by offering services including Web development and online application design. With offices in Washington, DC, where many nonprofits dwell, PICnet has aided organizations such as the Cystic Fibrosis Foundation and Relief International.
Frandsen (who's since left the company but remains on the board of advisors) and Ozimek don't mind that they've taken a different path than their peers. "Many of them [don't] get joy and passion out of their work on a day-to-day basis," observes Ozimek. "If you've had any kind of success, you should give back to help those who are less fortunate get to the same level you're at."
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."
Words From the Wise
Sometimes, getting involved with the community is just as rewarding for the entrepreneur as it is for the people she helps. Growing up, Michelle Rathman didn't have an easy life. Her mother abandoned her and her three sisters when Rathman was 4 years old. Rathman left her home and her abusive, alcoholic father and lived on the streets at a young age.
Now, as the owner of St. Charles, Illinois-based marketing/PR firm Impact! Communications Inc., founded in 1989, Rathman shares her story with inner-city youths. She provides insight and advice in hopes of enabling them to make good choices. Rathman's challenges have continued; now she's divorced and raising two teenagers. Nevertheless, she was compelled in 2000 to launch the service end of her business, calling the work "philanthropreneurship." For every client she represents-many of them authors and speakers-she tries to create a program using her client's expertise that serves kids or communities in some way. "I had been through cancer [and] a whole bunch of life-changing experiences, and it's something in my heart I'd wanted to do for a long time," says Rathman, 37. "I just thought 'It's now or never.'"
One particularly powerful program is "How Do I Love Me?" Geared toward fourth- to 12th-grade girls, this two-hour program is the marriage of her "philanthropreneurship" concept and an organization she had already created, called Wise Women, made up of professional women who want to mentor girls. Rathman and a few Wise Women go into classrooms and teach girls what it means to love themselves-covering mind, body, spirit and style-with each area covered by an appropriate "wise woman." Segments include 20 ways to boost self-esteem; nutrition and exercise; 10 things Rathman has learned; and a fashion showcase of chic, age-appropriate clothing. Rathman has the school principal choose four or five girls (often homeless) to model the clothes, and she surprises them by letting them keep the outfits. Corporate sponsors pay for the clothing, but Rathman self-funds the program otherwise.
Getting kids to open up is a major accomplishment. Rathman recalls the day one girl whispered in the ear of the Wise Women nutritionist. "I knew this tiny girl had an eating disorder, and she told [the nutritionist] she did. She also said her brother died of asthma and [she] had no father at home. These are impoverished kids we're talking about."
Rathman hopes one day to build an online Wise Women network so girls can e-mail their questions or concerns, but for now, she's doing it one classroom at a time. "All these little girls coming up to you, holding you and not wanting to let go-it just melts my heart," she says.
Rathman has also created a program about what it means to serve vs. being self-serving, and another about the value of money. Since no one is paid to participate in these programs, Rathman recruits individuals she has met through business and personal avenues to be volunteers. She has also found clients are eager to participate in her civic endeavors. "I've found the people we work with want to serve. They just don't know how to get started. We can become a conduit to get something formulated for them and book them in the schools."
Though she has offered the programs strictly in the Chicago public school system, Rathman hopes to eventually go nationwide. Running her company, which has 2004 projected sales of $600,000, is a full-time job, but Rathman doesn't mind stretching herself thin to devote herself to both sides of the business. "Now I get it. I know why I'm still doing this work-so I can do this other thing I really want to do at the end of the day," says Rathman. "It's great to earn money, but bottom line, we're here to serve."
Take the First Step
These entrepreneurs have shown that from startup to well-established ventures, it's never too late to become civically responsible. If you want to make a positive change in your business and your community, Massengale advises, "the first step is to recognize you have power, influence, time and resources."
Identifying your resources will help you figure out how you can leverage them to do some good. First, ask yourself whether you are acting in a way that is civically responsible within your company, providing employees with livable wages and enacting policies that improve the quality of life there. Then, see what you can do to help your community. Massengale suggests collaborating with other businesses and organizations to make it happen. "It's a new way to conceive and carry out business, because it suggests partnerships with the folks that live in your business's community. And what you do now can have a positive long-term effect on yourself, your business and everyone you touch with your efforts."