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SOCIAL GOOD        SEPTEMBER 2011
TABLE OF CONTENTSExecutive Summary ...................................................................................... ...
SOCIAL GOODEXECUTIVE SUMMARYWith leaders of multinational organizations embracing socially responsible practices as good b...
SOCIAL GOODEXPERTS AND INFLUENCERS*                           David Belt                                                  ...
SOCIAL GOOD              5
THE END OF GOODWASHING         DRIVERS                                       TREND                                  MANIFE...
THE END OF GOODWASHING         TRENDCynical and savvy, today’s consumers expect greater accountability from nonprofits as ...
THE END OF GOODWASHING                                                                     Figure 1A: RISE OF CONSUMER CYN...
THE END OF GOODWASHINGAiming to build a more transparent marketplace, GoodGuide is a website that uses a staff of research...
THE END OF GOODWASHING• Starbucks Global Responsibility Report: Among the annual  responsibility reports that companies pu...
THE END OF GOODWASHING      SIGNIFICANCE/RELEVANCEIt’s no longer enough to simply claim virtuous actions after some token ...
THE RISE OF SHARED VALUE         DRIVERS                                        TREND                                   MA...
THE RISE OF SHARED VALUE          TRENDRather than simply doling out checks to good causes,                     “The conce...
THE RISE OF SHARED VALUE                    “We’ll see a growing recognition (at least among the most progressive companie...
THE RISE OF SHARED VALUE                                                                                                  ...
THE RISE OF SHARED VALUE  needs. The company runs similar agricultural programs  in other countries, including Russia and ...
THE RISE OF SHARED VALUEexample: The Brivo DR-F, a digital X-ray machine with a space-saving design, costs 30% less than p...
THE RISE OF SHARED VALUETHINGS TO WATCHBuy One, Give One AwayWatch for more companies to adopt the novel buy-one, give-one...
CREATIVE URBAN RENEWAL         DRIVERS                                       TREND                                  MANIFE...
CREATIVE URBAN RENEWAL         TRENDHuman environments will become increasingly important as the global population becomes...
CREATIVE URBAN RENEWALEnvironmental concerns: Public awareness surrounding environmental degradation is leading many to re...
CREATIVE URBAN RENEWAL• Macro Sea: This development company is bridging the gap between  the creative grassroots and the p...
CREATIVE URBAN RENEWAL                  “I believe this massive amount of data that’s being generated can be used to bette...
CREATIVE URBAN RENEWAL• Levi’s donations to a Rust Belt town: Braddock, Pa.—a town  hurt by the decline of jobs for the sk...
CREATIVE URBAN RENEWAL• “I Wish This Was”: In New Orleans, artist Candy Chang launched this project in late 2010, encourag...
CREATIVE URBAN RENEWALThe efforts must be substantial: This movement has roots in anti-consumerist notions, and skeptical ...
RIPPING A PAGE FROMTHE FOR-PROFIT PLAYBOOK         DRIVERS                                      TREND                     ...
RIPPING A PAGE FROM THE FOR-PROFIT PLAYBOOK         TRENDNonprofit organizations are increasingly adopting for-profit tact...
RIPPING A PAGE FROM THE FOR-PROFIT PLAYBOOK   MANIFESTATIONSSurge in public-private partnerships: Instead of simply donati...
RIPPING A PAGE FROM THE FOR-PROFIT PLAYBOOK                                                                               ...
RIPPING A PAGE FROM THE FOR-PROFIT PLAYBOOKVenture philanthropy funds: These nonprofits are like venture capitalorganizati...
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
Sosyal İyilik Raporu / JWT
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  1. 1. SOCIAL GOOD SEPTEMBER 2011
  2. 2. TABLE OF CONTENTSExecutive Summary ...................................................................................... 3Social Good .................................................................................................. 5 The End of Goodwashing ........................................................................ 6 The Rise of Shared Value ........................................................................ 12 Things to Watch: Buy One, Give One Away ............................................ 18 Creative Urban Renewal ........................................................................ 19 Ripping a Page From the For-Profit Playbook ............................................ 27 The Global Do-Good Generation ............................................................ 32 Things to Watch .................................................................................... 35 Gaming for Social Good .................................................................... 35 Beyond Slacktivism: Incentivizing Online Engagement ............................ 37 Donation Channel Innovation ............................................................ 38 Case Studies ........................................................................................ 41Appendix ........................................................................................................ 44 Learn More About Our Experts and Influencers .............................................. 45 Additional Charts .......................................................................................... 49 A note to readers: To make the report easy to navigate, we’ve added hyperlinks to the Table of Contents and Executive Summary, so you can jump immediately to the trends that most interest you. We’ve also added summary pages of each trend where, again, you can click items on the pages to jump to more information (or alternatively, you can read the material straight through). This is a report from JWTIntelligence. Go to JWTIntelligence.com to download this and other trend research.
  3. 3. SOCIAL GOODEXECUTIVE SUMMARYWith leaders of multinational organizations embracing socially responsible practices as good business strategy, nonprofitstaking a page from the for-profit playbook to drive results and a socially conscious generation coming of age, we’re seeingnew energy and increasingly innovative initiatives in the area of social good.This report explores how macro trends—including the call for radical transparency, rapid urbanization and advancementsin technology—are influencing social good initiatives across the globe. For instance, expect less “goodwashing,” morecreative strategies for urban renewal and corporations embracing “shared value.”• The End of Goodwashing: Cynical and savvy, today’s consumers expect greater accountability from nonprofits as well as brands involved in cause marketing—e.g., exactly where the money is going and what impact it’s having. More transparency will mean more focus on effecting real change and less “goodwashing.”• The Rise of Shared Value: Rather than simply doling out checks to good causes, some corporations are starting to shift their business models, integrating social issues into their core strategies. The aim is to create shared value, a concept that reflects the growing belief that generating a profit and achieving social progress are not mutually exclusive goals. By reconsidering products and target demographics, forging partnerships with local groups and improving productivity in the value chain, companies can become a force for positive change while enhancing their long-term competitiveness.• Creative Urban Renewal: Human environments will become increasingly important as the global population becomes more urbanized over the next few decades and cities boom. Brands will become key partners in enabling creative strategies for urban renewal—improving local environments, adding beauty or helping to bring communities together.• Ripping a Page From the For-Profit Playbook: Nonprofit organizations are increasingly adopting for-profit tactics, fusing social consciousness with business acumen and focusing on achieving visible change. The shift from blanket or black-hole benevolence to targeted giving and venture philanthropy places more emphasis on cause and effect, measurable results and return on investment.The four macro trends above represent the driving forces in social good today. In addition, this report outlines things towatch in this space, including gamification, new ways to incentivize online engagement and donation channel innovation.We also highlight a number of standout case studies from around the world.METHODOLOGYJWT’s “Social Good” report is the result of quantitative, qualitative and desk research conducted by JWTIntelligence inpartnership with EthosJWT, a unit specializing in brand strategy, ideas and activation for social change and societalbenefit.JWTIntelligence and EthosJWT interviewed experts and influencers from the nonprofit and corporate social responsibilitysectors and conducted quantitative surveys in the U.S., the U.K. and Canada. The surveys used SONAR™, JWT’sproprietary online tool, to poll 908 adults aged 18-plus from June 28-July 6, 2011. 3
  4. 4. SOCIAL GOODEXPERTS AND INFLUENCERS* David Belt MIT DAVID BELT, executive NATHAN EAGLE, founder VANESSA EDWARDS, director and founder, and CEO, txteagle head of corporate Macro Sea responsibility, WPP TIM FAVERI, director, KIM FINN, vice president STEVE LEWIS, CEO and sustainability and and managing director, co-founder, Living PlanIT responsibility, Tim Hortons, Inc. EthosJWT, Toronto IRA LISS, CEO and CHARMIAN LOVE, YAO-HUI HUANG, CEO, co-founder, AOK chief executive, Volans Win4Causes WALKER MORRIS, Malawi ALEXIS OHANIAN, co-founder, MILTON PEDRAZA, CEO, country executive, Clinton Reddit; founder, Breadpig Luxury Institute Foundation TONY PIGOTT, president KRISTINE SHINE, vice and CEO, JWT Canada; global president, PopSugar Media director, EthosJWT; co-founder, Brandaid Project *See Appendix to learn more about these experts and influencers. 4
  5. 5. SOCIAL GOOD 5
  6. 6. THE END OF GOODWASHING DRIVERS TREND MANIFESTATIONS }} Consumer cynicism More (and easier-to-digest) Expectation of radical labeling and reporting transparency (sustainability indexes, Tesco Cynical and savvy, today’s green labeling scheme, Starbucks Global consumers expect greater Reading the fine print Responsibility Report, accountability from nonprofits as Apple’s environmental well as brands involved in cause footprint, Patagonia’s marketing—e.g., exactly where “The Footprint Chronicles,” Social media Best Buy CSR and the money is going and what sustainability webinar) impact it’s having. More Competitive and transparency will mean more government pressures focus on effecting real change and less “goodwashing.” Benefit Corporations taking a holistic approach to More monitoring social good organizations and watchdogs Digitally enabled advocacy groups SIGNIFICANCE/RELEVANCEIt’s no longer enough to simply claim virtuous actions after some token efforts. As consumers learn all they ever wantedto know about the impact of their donations, volunteer efforts and cause-related purchases, brands and philanthropicorganizations will need to ensure their credentials are up to the scrutiny. This goes for internal operations as well aspartnerships. Better to acknowledge flaws in CSR programs and business operations—along with plans on how theseissues will be addressed—than to be found out by watchdogs or engaged individuals and have reputations smearedacross the media. 6
  7. 7. THE END OF GOODWASHING TRENDCynical and savvy, today’s consumers expect greater accountability from nonprofits as well as brands involved in causemarketing—e.g., exactly where the money is going and what impact it’s having. More transparency will mean morefocus on effecting real change and less “goodwashing.” DRIVERSConsumer cynicism: Today’s consumers have seen plenty of “goodwashing,” or dubiousPR- or marketing-driven efforts, such as BP’s $125 million investment to position itself asenvironmentally responsible prior to causing a catastrophic oil spill. So people are moreapt to question brands’ commitment to the causes they support: Just over half ofrespondents to our survey agreed with the statement, “I’m skeptical of brands that are Amy Phetaminealigned with charitable/social causes; their efforts seem somewhat halfhearted.”People have also seen nonprofits being taken to task—from Madonna’s Raising Malawito the foundation set up by Three Cups of Tea author Greg Mortenson—so they aresomewhat cynical about charities as well. For example, 88% of our respondents said they are “sometimes suspiciousabout how much of the money I donate actually goes to people in need, as opposed to management and administrativecosts.” (See figure 1a; for country breakdowns, see Appendix, figures 1b-d.) “Brands are becoming far more discerning about who to cooperate with in terms of institutions. Madonna had a problem with her charity, and so did Oprah. So before brands step in to sponsor a charity, it has to have impeccable credentials, have substance.” —MILTON PEDRAZA, CEO, Luxury InstituteExpectation of radical transparency: With the rise of Maximum Disclosure—brands telling consumers more abouteverything from calorie counts to carbon footprints—consumers are growing to expect greater transparency from thephilanthropic world as well. More than eight in 10 of our respondents agreed that “Brands that are aligned withcharitable/social causes need to do a better job of telling me how my donation is benefiting the cause.” And three-quarters of our respondents agreed with the statement, “Brands and companies don’t disclose enough informationabout their charity/social cause programs.” (See figure 1a.)Reading the fine print: People are putting more time and energy into research—they are increasingly apt to seek outmore details about programs and brands that attract their attention and discover additional information aboutenvironmental impact, business practices and more. Indeed, 55% of our survey respondents reported doing research tolearn how their funds are allocated before donating to a charitable organization; Millennials and Gen Xers are the mostdiligent cohorts, with around 60% in agreement. (See figure 1a.) 7
  8. 8. THE END OF GOODWASHING Figure 1A: RISE OF CONSUMER CYNICISM AND “My sense is that, with EXPECTATION FOR TRANSPARENCY (U.S., U.K., CAN) the younger generation, Percentage who agree with each of the following if they cannot read Millennials (18-33) Gen X (34-46) Boomers (47-66) things about your company on the Web, you have very little credibility in their eyes. … It is I’m skeptical of brands that are aligned with charitable/social causes, their efforts seem somewhat halfhearted I’m sometimes suspicious about 53% 49% 55% } 52% almost like they do not believe you unless they can read it for themselves and get comfort that someone out how much of the money I donate actually goes to people in need, as opposed to management and administrative costs 85% 87% 92% } 88% there has blogged or given the issue Brands that are aligned with the ‘Like’/thumbs up.” –TIM FAVERI, director, sustainability and charitable/social causes need to do a better job of telling me how my donation is benefiting the cause 86% 84% 83% } 84% responsibility, Tim Hortons, Inc.Social media: Facebook, Twitter and other social Brands and companies don’t disclose enough information about their charity/social cause programs 71% 77% 77% } 75%platforms have made it easy for anyone to become an I do background research to learnagent of social change. With a quick click, activists,watchdogs, thought leaders and average Joes can exactly how my funds are allocated before donating money to a charitable organization 45% 60% 61% } 55%disseminate their perspective to the masses, bringingvaried points of view to light and limiting anorganization’s ability to gloss over less flattering facts. I wish there was an easier way to see the direct impact my time/monetary donations have 86% 84% 83% } 84%Competitive and government pressures: Legal requirements and competitive pressures are forcing businesses aswell as nonprofits to more fully disclose everything from carbon footprints and labor practices to metrics charting acharity’s effectiveness.“We are being pushed by socially responsible investors and other stakeholders to measure the‘impact’ or ‘outcomes’ of our social/community programs. I think this will be a big area of interestand focus in the next few years.” —TIM FAVERI, director, sustainability and responsibility, Tim Hortons, Inc.More monitoring organizations and watchdogs: Third-party charitynavigator.orgorganizations are making it easier for people to find out moreabout individual charities and how they stack up. Guidestar,for instance, has aggregated information on more than 1.8million nonprofits and 6.6 million people in the sector withthe hopes of getting organizations to share their information more “openly and completely.” Charity Navigator evaluatesmore than 5,500 American charities based on their organizational efficiency and how well they sustain their programsover time, while the more stringent American Institute of Philanthropy (billed as “the pit bull of watchdogs”) is on amission to “educate the public about the importance of wise giving.” 8
  9. 9. THE END OF GOODWASHINGAiming to build a more transparent marketplace, GoodGuide is a website that uses a staff of researchers (chemists,toxicologists, nutritionists, etc.) to rate consumer products based on a wide range of criteria. Its mobile app allowsconsumers to scan products and get instant ratings to help them “Find safe, healthy, and green products,” as GoodGuide’stagline states. In 2010, GoodGuide announced plans to build a portal where manufacturers can learn how to boost their ratings. goodguide.comDigitally enabled advocacy groups: Digital media ishelping advocacy groups reach a broader audiencewith messages about avoiding brands that useoffending ingredients, unsavory labor practices and soon. With so much information out there, these groupshelp simplify issues for consumers while pushingcorporations to keep it clean. The Rainforest ActionNetwork, for instance, relies on aggressive marketingcampaigns against practices perceived as harmingrainforests and natural resources; its mission is to getcompanies to “balance profits with principles, [and] to ran.orgshow that it is possible to do well by doing good.” MANIFESTATIONSMore (and easier-to-digest) labeling and reporting: Some of the world’s leading brands are making the environmentalimpact of their products and operations more transparent. At the same time, reporting is becoming more visually driven,making sometimes complex information more digestible.• Sustainability indexes: Since 2009, Walmart has been working with vendors to develop a sustainability index for all its products. The retailer sells so many products and has such an extensive global presence that the initiative could eventually be a tipping point for universal eco-labeling. IKEA recently announced a “Sustainability Product Score Card” for its products, saying that by 2015, it aims to make the bulk of its home furnishing products more sustainable than predecessor or competing products.• Tesco green labeling scheme: Under this government-led voluntary program, the U.K.-based retail giant is working to label the 70,000 products on store shelves with carbon emissions data. So far Tesco has labeled more than 500 products. 9
  10. 10. THE END OF GOODWASHING• Starbucks Global Responsibility Report: Among the annual responsibility reports that companies publish, which include updates on progress toward CSR and related goals, some stand out for their ability to make the information more digestible. Starbucks, for example, uses a visually driven format to reveal its progress in the areas of coffee purchasing and farmer support, community involvement, cup recycling and energy and water conservation; this is viewable under the Responsibility tab of the company’s website.• Apple’s environmental footprint: Apple’s website reveals its greenhouse gas emissions and outlines the environmental footprint of all its products in a visually appealing way.• Patagonia’s “The Footprint Chronicles”: The outdoor-gear brand details the environmental impact of its products, listing “the good” and “the bad” for each (e.g., the Nano Puff starbucks.com/responsibility Pullover jacket’s water-repellent finish contains a “synthetic chemical that is now persistent in the environment”).• Best Buy CSR and sustainability webinar: In mid-2011, Best Buy took a brave leap into transparency by hosting a discussion of its annual sustainability report with a live audience via Livestream and Twitter.Benefit Corporations taking a holistic approach to social good:While capitalism in the past century blossomed around theidea of increasing shareholder value, a new crop ofcorporations known as Benefit Corporations (or B Corps)operates under recently adopted legal provisions that make apple.com/environmentit easier to put sustainability and accountability at the centerof the business model. B Corps can legally consider allstakeholders when making decisions, not only stockholders.To become a B Corp, companies must be certified by B Lab, a nonprofit that evaluates a business’s operations and legalframework to ensure that doing good is ingrained in the DNA. There are nearly 450 B Corps across North America andthe EU—including Method and Seventh Generation—and they generate $2.18 billion in revenue across 54 industries,according to bcorporation.net.“The answer is not to play ‘gotcha’ at the back end. The answer is getting in front of the problemand preventing situations in the first instance.” —TIM DELANEY, president, National Council of Nonprofits, “Can You Know Where Your Charity Dollars Go? Not Easily,” npr.org, May 6, 2011 10
  11. 11. THE END OF GOODWASHING SIGNIFICANCE/RELEVANCEIt’s no longer enough to simply claim virtuous actions after some token efforts. As consumers learn all they ever wantedto know about the impact of their donations, volunteer efforts and cause-related purchases, brands and philanthropicorganizations will need to ensure their credentials are up to the scrutiny. This goes for internal operations as well aspartnerships. Better to acknowledge flaws in CSR programs and business operations—along with plans on how theseissues will be addressed—than to be found out by watchdogs or engaged individuals and have reputations smearedacross the media. POTENTIALWith consumers on high alert, claims must be solid: Consumers will see through “goodwashing” and similar practices.And transparency is essential too. It’s likely that simply being open will matter more to consumers than the specificinformation revealed.As more corporations spell out their CSR credentials and nonprofits more clearly illustrate their mission, it will becomeincreasingly important to practice Visual Fluency—that is, convey complex information in an easily digestible way. People intoday’s attention-scarce economy prefer a graphic synthesis of information to an avalanche of data and reading material.Watch for more businesses to follow the lead of companies like Best Buy, which is opening up a two-way dialogue aboutits CSR reporting; Patagonia, which divulges the shortcomings of its products in addition to their green credentials; andStarbucks, which lets consumers easily check the company’s progress toward self-imposed CSR goals. Such efforts willhelp companies differentiate themselves from the cacophony of CSR messaging.Meanwhile, brands with the cleanest credentials can ramp up efforts to educate consumers about why they should careand apply competitive pressure on organizations that have been slow to adopt the “Do no evil” creed or are still practicingold-school philanthropy.Brands that don’t become more responsible for their social impact and act more sustainably will lose ground. 11
  12. 12. THE RISE OF SHARED VALUE DRIVERS TREND MANIFESTATIONS }} New opportunities in emerging markets Rather than simply doling out checks to good causes, some corporations are starting to shift Reconceiving products to their business models, Pressure to cut costs and address social issues carbon emissions integrating social issues into (Campbell’s Nourish, their core strategies. The aim is Philips’ “Sustainable to create shared value, a concept Energy Solutions for Blurring lines between Africa,” GE’s Vscan) that reflects the growing belief business, nonprofits and government that generating a profit and achieving social progress are not mutually exclusive goals. By Reconceiving supplyLooming resource shortages reconsidering products and chains (Sabritas’ Educampo target demographics, forging project, Marks & Spencer’s “Plan A,” Walmart’s fuel- partnerships with local groups efficient trucks) Consumer expectations and improving productivity in the value chain, companies can become a force for positive change while enhancing their The Millennial outlook long-term competitiveness. SIGNIFICANCE/RELEVANCEBy putting shared value at the center of their strategy, brands can benefit their business, their customers and society ingeneral. Companies should identify needs and develop products, services and/or processes to meet them; invest in thecharitable, nonprofit and/or NGO space; and seek ways to reduce fuel consumption, which reduces costs and emissions.In the long term, these strategies can expand companies’ market presence, insulate them from shocks in the supplychain and improve the way they are perceived by consumers. 12
  13. 13. THE RISE OF SHARED VALUE TRENDRather than simply doling out checks to good causes, “The concept of shared value can be defined assome corporations are starting to shift their business policies and operating practices that enhancemodels, integrating social issues into their core strategies. the competitiveness of a company whileThe aim is to create shared value, a concept that reflectsthe growing belief that generating a profit and achieving simultaneously advancing the economic andsocial progress are not mutually exclusive goals. By social conditions in the communities in whichreconsidering products and target demographics, forging it operates. Shared value creation focuses onpartnerships with local groups and improving identifying and expanding the connectionsproductivity in the value chain, companies can become a between societal and economic progress.”force for positive change while enhancing their long-term competitiveness. —MICHAEL E. PORTER AND MARK R. KRAMER, “Creating Shared Value: How to reinvent capitalism—and unleash a wave of innovation and growth,” Harvard Business DRIVERS Review, January-February 2011New opportunities in emerging markets: As businesses seek “We have observed thatnew sources of revenue in emerging markets, they are comingto see that they can generate opportunities for growth if they companies that choose to takehelp to address some of the endemic problems they find (for on a more proactive approachexample, by creating relevant products and services and in the form of ‘socialinvesting in sustainable manufacturing processes). In Africa, for innovation’ are capturing much greaterexample, where an estimated 560 million people live withoutelectricity, new solar-powered technologies offer a cheap way to competitive advantage. This competitiveprovide families with lighting. advantage is rooted in an ability to create new products and services that deliver socialPressure to cut costs and carbon emissions: Companies aredeveloping more sustainable,low-cost manufacturing and transport and environmental impact alongside financialpractices as they seek ways to both reduce costs and fall in line with impact, gain access to new markets, engagepressures to cut carbon emissions. These practices,and others and retain their internal talent, as well asfocused on stewarding natural resources,can be both economical build brand differentiation in the market.”and effective,cutting pollution and improving local living conditions. —CHARMIAN LOVE, chief executive of social innovation consultancy VolansBlurring lines between business, nonprofits and government:Corporations are partnering with governments and nonprofits—from academic institutions to development organizations—inalliances that advance the objectives of all parties. As part of The Cocoa Plan, Nestlé, for example, has partnered with NGOs,governments and private companies in an effort to help cocoa farmers run profitable farms, improve production, respect theenvironment and better their local communities. We’re also seeing more social business enterprises—organizations thatcomprise both for- and nonprofit components—such as Waste Concern, which promotes recycling and waste management inBangladesh, and Terracycle, which helps to collect waste in more than a dozen countries and upcycles it into sellable products.As Michael E. Porter and Mark R. Kramer wrote in Harvard Business Review earlier this year,“The principle of shared value creationcuts across the traditional divide between the responsibilities of business and those of government or civil society. From society’sperspective, it does not matter what types of organizations created the value. What matters is that benefits are delivered by thoseorganizations—or combinations of organizations—that are best positioned to achieve the most impact for the least cost.” 13
  14. 14. THE RISE OF SHARED VALUE “We’ll see a growing recognition (at least among the most progressive companies) of the opportunities associated with sustainability and a greater commitment to creating ‘shared value’ for business and society. In terms of implementation, partnerships are often essential because of the complex nature of the challenges being addressed.” —VANESSA EDWARDS, head of corporate responsibility, WPPLooming resource shortages: In today’s globalized Figure 2A: CONSUMER EXPECTATION FORenvironment, demand for resources is growing RESPONSIBLE BUSINESS (U.S., U.K., CAN)exponentially, and experts are sounding warnings about Percentage who agree with each of the followinglooming shortages. In Africa, for example, political instabilityand antiquated farming techniques mean volatile supply Millennials (18-33) Gen X (34-46) Boomers (47-66)chains and greater risk for companies. Corporations aretrying to ensure the long-term viability of key resources by 84%improving living conditions and providing communitieswith new, more sustainable technologies. Brands and big corporations should take responsibility for improving the world 89% 87% }87%Consumer expectations: Consumers care about socialresponsibility and expect corporations to care as well, asour data shows: 87% of respondents across the marketssurveyed agreed that “Brands and big corporations Companies need to do more good, not just less bad 88% 88% 93% } 90%should take responsibility for improving the world.” I believe brands are ableMoreover, 90% felt that “Companies need to do moregood, not just less bad.” (See figure 2a; for country to be both powerful/ profitable and kind to the world at the same time 88% 88% 92% } 90%breakdowns, see Appendix, figures 2 b-d.)The Millennial outlook: Millennials, who tend to be optimistic, entrepreneurial and socially engaged, are entering thebusiness world and bringing this mind-set with them. This globally connected generation wants to effect socialchange and use intuitive, commercial strategies to do so. (See “The Global Do-Good Generation,” page 32.) MANIFESTATIONSReconceiving products to address social issues: Global brands are developing products and services tailored to addressissues prevalent in the markets where they operate.• Campbell’s Nourish: Distributed in Canadian groceries, Nourish is a single-serving can of soup designed to provide a complete daily serving of three key food groups at a low cost. Campbell’s considers the product both a commercial opportunity and a way to address hunger and food security issues. Additionally, the company donated 200,000 cans of Nourish to Food Banks Canada. Campbell’s has developed partnerships with nonprofits such as the World Food Programme and local governments, and is considering rolling out Nourish in other markets.• Philips’ “Sustainable Energy Solutions for Africa”: As part of this solar-focused effort, Philips is partnering with the Dutch government in a bid to provide affordable, sustainable energy solutions to some 10 million people across 14
  15. 15. THE RISE OF SHARED VALUE lighting.philips.com 10 sub-Saharan African nations by 2015. The Solar Home wfp.org System, for instance, is a low-cost, highly efficient light for Projects that create shared value “sidestep homes and small businesses. Its solar-charged battery pack the age-old debate about whether business powers two LED lamps, and a full day’s charging in the sun is good or evil. ... They just want to solve can provide more than five hours of light. A cheap, lightweight social problems in the most effective way solar reading light is designed to help children complete their they know how, and engaging business homework at night or allow people to read in the evening. know-how, resources and the profit• GE’s Vscan: GE started selling this smartphone-sized imaging motive turns out to be an important part tool, which brings ultrasound technology to physicians’ of many solutions.” pockets, in 2010. The device has an hour’s worth of battery life, allowing medics to diagnose patients in the field—most —LESLIE R. CRUTCHFIELD, JOHN V. KANIA, and notably in crisis zones where access to power is limited—and MARK R. KRAMER, “Do More Than Give: The Six along bedsides. With a price tag just under $8,000, the Vscan Practices of Donors Who Change the World,” offers a considerably cheaper alternative to standard as reprinted in Fast Company, March 2011 ultrasound machines, which can cost upward of $100,000.Reconceiving supply chains: Faced with rising manufacturing andtransportation costs—especially as the price of oil increases—businesses are starting to reduce packaging and reconfiguretheir logistics systems, steps that both save money and lowercarbon emissions.• Sabritas, Educampo project: As part of efforts to improve the sustainability of its corn supply, Sabritas works with farmers close to its factories in Mexico, in collaboration with the Mexican Foundation for Rural Development. The PepsiCo- Vscan Primary Care Online Brochure owned snack brand provides seeds, fertilizer, water usage guidelines and agrochemicals to help farmers increase their yields. Between 2008 and 2010, the project helped close to 300 small families, and the average corn yield more than doubled. Meanwhile, PepsiCo was able to lower transportation costs while ensuring access to the type of corn best suited to its 15
  16. 16. THE RISE OF SHARED VALUE needs. The company runs similar agricultural programs in other countries, including Russia and China.• Marks & Spencer, “Plan A”: The British retailer Marks & Spencer has committed to the lofty goal of becoming the world’s most sustainable major retailer by 2015. The company reported that in 2010/2011, this ongoing initiative contributed to a net benefit of £70 million for M&S. Among other strategies, the retailer switched its delivery fleet to 50% bio-diesel fuel and implemented a “‘green’ business travel policy to reduce CO2 emissions caused” by travel. It is currently upgrading its refrigeration pepsico.com systems in stores, leading to a reduction in greenhouse gas emissions.• Walmart’s fuel-efficient trucks: Walmart is working to double its truck efficiency by 2015 (based on a 2005 baseline), switching to fuel-efficient tires, recalibrating engines and adding aerodynamic elements to truck carriages. It has also replaced two-thirds of its nearly 7,000-truck fleet with fuel-efficient tractors and used detailed analysis to shorten its route network, by 49 Walmart Stores million miles. In 2010, these initiatives helped the company cut its fuel costs and save almost 40,000 metric tons of CO2 emissions. SIGNIFICANCE/RELEVANCEBy putting shared value at the center of their strategy, brands can benefit their business, their customers and society ingeneral. Companies should identify needs and develop products, services and/or processes to meet them; invest in thecharitable, nonprofit and/or NGO space; and seek ways to reduce fuel consumption, which reduces costs and emissions.In the long term, these strategies can expand companies’ market presence, insulate them from shocks in the supply chainand improve the way they are perceived by consumers. POTENTIALThere are more than 3 billion low-income consumers worldwide, according to estimates by Nestlé, and as globalpopulation growth explodes, this number is set to spike. By creating products and services to meet the needs of thissegment, brands have a huge opportunity to expand outside developed markets. And by investing in emerging markets,brands can create a virtuous circle, where employed locals become aspiring middle-class consumers.Brands can innovate by scaling down existing offerings into lower-priced versions. GE’s two-year-old Healthymaginationproject, for instance, which aims to lower the cost of health care, has already birthed several economical devices. One 16
  17. 17. THE RISE OF SHARED VALUEexample: The Brivo DR-F, a digital X-ray machine with a space-saving design, costs 30% less than premium systems andis also more energy efficient than typical film-imaging systems.Brands should consider how to best educate shareholders about the potential of these kinds of ventures. This can bedone by emphasizing the importance of a long-term business strategy, highlighting learnings about new areas forproduct development and making incremental changes to corporate practices. At the same time, expect a new group ofshared value auditors, which will develop new metrics that assess companies’ performances in terms of social impact andshared value generated. “Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success. It is not on the margin of what companies do but at the center. We believe that it can give rise to the next major transformation of business thinking.” —MICHAEL E. PORTER and MARK R. KRAMER, “Creating Shared Value: How to reinvent capitalism— and unleash a wave of innovation and growth,” Harvard Business Review, January-February 2011 17
  18. 18. THE RISE OF SHARED VALUETHINGS TO WATCHBuy One, Give One AwayWatch for more companies to adopt the novel buy-one, give-one away model pioneered by TOMS, which donatesone pair of shoes for every pair it sells (more recently the company expanded into eyewear). This strategy offersconsumers a powerful incentive to become customers while also contributing to the greater good. sirrichards.com betterworldbooks.com warbyparker.comWarby Parker: To help low-income people with vision problems increase their earning potential, Warby Parkerdonates one pair of eyeglasses for every pair sold. So far, the company has given away more than 50,000 pairs topeople around the world.Sir Richard’s Condom Company: This company claims to offer the “first ever buy-one, give-one condom.”For every condom sold, it donates another to a country in need to help meet the world’s unmet demandfor condoms.Better World Books: In August 2011, this online bookseller—which seeks to improve literacy rates by collecting anddonating books to partner organizations—began donating a book for each one purchased on the site. 18
  19. 19. CREATIVE URBAN RENEWAL DRIVERS TREND MANIFESTATIONS Creativity bubbling up }} (ArtBridge, Guerrilla Fastest urban boom in Gardening, Greenaid, Macro history Sea, Detroit’s Imagination Station and Loveland, Favela Painting project)Government stagnation and lack of funding Human environments will Techie urbanites leveraging become increasingly important data (SeeClickFix, Give Empty retail space as the global population a Minute, Roadify, Code becomes more urbanized over for America) the next few decades and cities Environmental concerns boom. Brands will become key Brands supporting partners in enabling creative Creative Urban Renewal strategies for urban renewal— (KFC, Apple, Kia, Dulux DIY ethic improving local environments, Paints, Planters, Levi’s, BMW Guggenheim Lab) adding beauty or helping to bring communities together. “We vs. me” mind-set Giving new life to dead space (Absolut Stairwell Gallery, Wasted Spaces, “I Wish This Was”) Brand involvement in community is expected Corona’s “Save the Beach” project SIGNIFICANCE/RELEVANCEBrands will be key partners in enabling creative strategies for renewal, taking local CSR initiatives to the next level.Brands can show their creativity, innovative spirit and community-mindedness by tapping into the “urban hack” mind-set. 19
  20. 20. CREATIVE URBAN RENEWAL TRENDHuman environments will become increasingly important as the global population becomes more urbanized over thenext few decades and cities boom. Brands will become key partners in enabling creative strategies for urban renewal—improving local environments, adding beauty or helping to bring communities together. DRIVERSFastest urban boom in history: With cities booming, there’s never been a more pressing need to rethink them. In thedeveloping world, people are drawn to new opportunities in urban centers, which are adding an average of 5 millionpeople per month, according to UN-HABITAT. In Asia, Foreign Policy estimates, about half the population (1 billionpeople) will migrate from the countryside to urban centers by 2030. Meanwhile, the U.S. is seeing “bright flight,” withyounger, educated Americans reversing the trend among their parents and grandparents to leave cities for the suburbs;among first-time home buyers, 77% say they want to live in urban areas.Government stagnation and lack of funding: Despite government stimulus funds earmarked for infrastructure, manyofficials cite lack of money as a key barrier to infrastructure investment—a reality that is leading to citizen frustration.Nearly seven out of 10 respondents agreed with the statement, “My local community is in need of a lot of care, and thecity government has been slow to act”; discontent is even higher among British Millennials, with three-fourths inagreement. (See figure 3a; for country breakdowns, see Appendix, figures 3b-d.)The private sector can boost the speed and effectiveness of government projects to upgrade infrastructure.Governments in emerging markets “have plans to have private companies take a larger role,” according to a Bank ofAmerica Merrill Lynch study on investing in emerging market infrastructure.Empty retail space: As so many chains have declared bankruptcy and closed stores, developers have been forced toconsider repurposing excess retail space for activities other than shopping. They are recognizing the importance ofutilizing these spaces, which, if done correctly, can encourage foot traffic and maintain the vitality of urban areas. “The whole idea of dead retail space is pretty prevalent in the downturn. Artists used to go in and take over warehouse spaces. Now warehouse spaces—at least in cities—are often expensive. So maybe the next move is to David Belt take over some of these huge areas of strip malls that are so inexpensive or dead malls and create art studios. … I think people would love to take some of these spaces and turn them on their heads. … A lot of what happens in art these days is about appropriation, so if there was a way to rethink junk space and let the community use that, without too much money or intervention, [brands] could create an interesting place for [people] to go that’s sort of the anti-mall.” —DAVID BELT, executive director and founder, Macro Sea, a development firm that uses everyday objects to create unexpected interactive urban projects 20
  21. 21. CREATIVE URBAN RENEWALEnvironmental concerns: Public awareness surrounding environmental degradation is leading many to rethinkurban spaces.DIY ethic: People are losing faith in big institutions and governments, becoming more motivated to implement theirown, often unorthodox ideas for change. Indeed, 82% of our survey respondents agreed with the statement, “It’s betterto take local community projects into your own hands rather than waiting for big institutions or city governmentaction.” This figure jumps to 88% among British Millennials. (See figure 3a.)“We vs. me” mind-set: There’s a growing belief in Figure 3A: CONSUMER DESIRE FOR BRANDcollectively driven positive change, both among INVOLVEMENT IN LOCAL COMMUNITY (U.S., U.K., CAN) Percentage who agree with each of the followingprofessionals (designers and architects, developers, Millennials (18-33) Gen X (34-46) Boomers (47-66)urban planners, etc.) and everyday folk driven tobetter their environs.Brand involvement in community is expected:Renewed interest in local provenance andcommunity building has spotlighted the impact a My local community is in need of a lot of care and the city government has been slow to act 68% 67% 67% } 68% It’s better to take local communitymultinational corporation can have on communities.As a result, consumers are beginning to hold theseorganizations to a higher standard. Our survey projects into your own hands rather than waiting for big institutions or city government action 81% 83% 83% } 82%found that 84% of respondents agreed with the Brands and large corporations have 82%statement, “Brands and large corporations havea responsibility to improve the local communitiesin which they do business.” And nearly seven in a responsibility to improve the local communities in which they do business 83% 86% } 84% I wish a brand or company would 76%10 respondents said they felt that big businessand corporations should be more involved whenit comes to supporting charitable, social help by making substantial investments to improve my local community 80% 80% } 79% Members of my local communityand/or environmental causes in local 75%communities. are willing and able to roll up their sleeves and work on projects that will improve our town; we just need the tools and leadership to do it 80% 75% } 77% MANIFESTATIONSCreativity bubbling up: So-called urban hackers, artists, environmentalists and nonprofits have traditionally dominatedthis movement, challenging the status quo by re-creating spaces. Often, the ideas involve simple ways to beautify spaces.• ArtBridge: This nonprofit public arts organization is working to turn overhead construction scaffolding in New York into showcases for emerging local artists.• Guerrilla Gardening: This U.K.-based group uses the motto “Let’s fight the filth with forks and flowers!” and says it’s for “anyone interested in the war against neglect and scarcity of public space.” The movement is picking up adherents in the U.S.• Greenaid: In Los Angeles, this grassroots environmental campaign makes “candy machines loaded with ‘seedbombs’” for people to toss into unused plots of land. 21
  22. 22. CREATIVE URBAN RENEWAL• Macro Sea: This development company is bridging the gap between the creative grassroots and the private-sector approach, utilizing materials (oftentimes junk) and space in unexpected and visceral ways. One project turned Park Avenue in midtown Manhattan into a “lo-fi country club that featured dumpster swimming pools, cabanas, bocce ball and barbecues.”• Detroit’s Imagination Station and Loveland: In the wake of Detroit’s decline, a wave of artists have hijacked the city, turning it into a center of urban and artistic experimentation. The Imagination Station, a nonprofit group of artists and designers, aims to “reclaim” ruined properties, creating community centers and public art spaces. Loveland is a “micro real estate and entertainment fundraising startup,” with “inchvestors” from around the world invited to buy a square inch of property in Detroit; an online community then decides what should be done with the physical space. The project Antonia Wagner aims to “provide a fun, game-like ownership experience while creating entertainment fundraising, community collaboration, and social mapping tools that work at any scale.”• Favela Painting project: European artists Haas&Hahn have been beautifying Brazilian slums since 2005. The organization behind this, Firmeza Foundation, “supports the creation of striking artworks in unexpected places. It collaborates with local people to use art as a tool to inspire, create beauty, combat prejudice and attract attention.”Techie urbanites leveraging data: Empowered by technology, urbanites are setting out to improve real-time access toinformation, often bypassing city agencies, by making data mobile, collaborative and social.• SeeClickFix: This service allows anyone to report and track nonemergency issues such as downed trees, broken streetlights and potholes anywhere in the world. In April 2011, it launched a Facebook app, awarding “civic points” for each community-related effort done through SeeClickFix. The Facebook platform includes gaming elements, showing users how they stack up against friends and the SeeClickFix community.• Give a Minute: Currently operating in Chicago, Memphis, Tenn., and San Jose, Calif., Give a Minute is akin to a virtual community board; it provides a platform for people to share ideas on improving their city youtube.com/LocalProjects with community leaders, who respond to the best submissions.• Roadify: This SMS-based service—currently operating in parts of Brooklyn—compiles user-generated data to provide real-time status updates on parking spots and public transit.• Code for America: This new nonprofit similar to Teach for America and supported by Yahoo! and Microsoft, among others, taps Americans’ newfound sense of DIY civic reform. This year 20 idealistic techies are partnering with four U.S. cities—Boston, Philadelphia, Washington and Seattle—to create efficient and saleable Web-based solutions that address core civic problems and will help make cities “more efficient, transparent and participatory.” The goal is to help bring American cities into the 21st century while bridging budget gaps created by the recession. 22
  23. 23. CREATIVE URBAN RENEWAL “I believe this massive amount of data that’s being generated can be used to better design cities, to build better disease surveillance models, to do things that ultimately are going to improve the lives of billions of people.” MIT —NATHAN EAGLE, founder and CEO, txteagle, which creates opportunities for mobile subscribers in the developing world to generate income via their phonesBrands supporting Creative Urban Renewal: With local municipalities strapped for cash, multinational brands arepartnering with local city agencies to fund urban improvements.• “Re-Freshed by KFC”: In the absence of government funding, KFC donated money to help fill some of the potholes in and around Johannesburg, South Africa, and sponsored pothole and road repairs in five U.S. cities; the repairs were stamped “Re-Freshed by KFC” with a nonpermanent stencil. BizCommunity.com• Apple’s transit station renovation: Before opening a Chicago store, Apple spent $4 million renovating a nearby transit station that was in terrible condition; it now has a new façade and park-like plaza, with Apple granted advertising rights.• Kia’s “Drive Change” campaign: In Canada, Kia built its “Drive Change” campaign around renewal projects, with spots showing Kia teams making over two rundown spaces each in the course of a day.• Dulux Paints’ “Let’s Colour Project”: Taking a cue from nonprofits such as Publicolor and Favela Painting, Dulux Paints embarked on the “Let’s Colour Project” in March 2010, supplying material and organizing communities in Brazil, France, the U.K., South Africa, Turkey, India and the Netherlands to help paint schools, homes and public spaces.• Planters’ community parks: Throughout 2011, Planters is sponsoring the creation of peanut- shaped community parks, dubbed Planters Groves, in four U.S. cities as part of the nut brand’s “Naturally Remarkable” campaign and a national tour to promote sustainability. The parks are prnewswire.com constructed on unused land with recycled materials, and local volunteers come together alongside Planters employees to work on them. 23
  24. 24. CREATIVE URBAN RENEWAL• Levi’s donations to a Rust Belt town: Braddock, Pa.—a town hurt by the decline of jobs for the skilled blue-collar worker— is the beneficiary of Levi’s Creative Urban Renewal project. The brand, which showcases Braddock locals in its national “Go Forth” campaign, agreed to fund a refurbishment of the Braddock town community center and to support an urban farm that provides inexpensive produce to residents.• BMW Guggenheim Lab: Some efforts focus on simply generating ideas and bringing people together. BMW teamed youtube.com/LevisReadyToWork up with the Guggenheim Foundation to build a “lab” that will spend six years traveling through nine cities worldwide, serving as “a public place for research, experimentation, and the sharing of ideas about major issues affecting urban life.” The project launched in New York in August 2011. “Just to put [your brand’s] name on a banner isn’t so interesting, but to take a leadership role where they’re raising money for a community garden or where David Belt they’re providing a creative space for people to interact with—that’s pretty empowering because it gives people the tools. “I feel [brands] don’t have to accommodate that many people in order to have a tremendous impact and influence and get a pretty big bang for their buck, because if they have the right people in there the word really gets out and the ripple effect is felt.” —DAVID BELT, executive director and founder, Macro Sea, a development firm that uses everyday objects to create unexpected interactive urban projectsGiving new life to dead space: Developers and DIYers are repurposing excess retail space for activities otherthan shopping.• Absolut Stairwell Gallery: This initiative was created as part of the Dead Space Living Artists initiative, which converted neglected spaces in Sydney into “culture pockets”; each month a staircase leading up to a popular bar displayed works from emerging artists.• Wasted Spaces: This London-based nonprofit “transforms vacant properties and other unloved [oftentimes retail] spaces into exciting art experiences,” placing smiley-face graphics on an abandoned storefront, for instance, and creating a public art installation that utilizes commands from Twitter users to power an image projected wastedspaces.org onto a wall. The organization also held an open call for ideas on intermediary uses for an abandoned shopping center. 24
  25. 25. CREATIVE URBAN RENEWAL• “I Wish This Was”: In New Orleans, artist Candy Chang launched this project in late 2010, encouraging community members to tag abandoned buildings with stickers detailing how the space could be better used. Corona’s “Save the Beach” project: Launched in 2009, this project was created to clean up the litter on one European beach each year. The initial year more than 120,000 people voted via the “Save the Beach” website, for Capocotta beach in Rome. In 2010, Corona—in partnership with JWT Madrid—decided to push the concept even further. To call attention to the litter issue in a unique way, it created a beach hotel made out of garbage, symbolizing what vacations will be like in the future if people continue to litter on beaches. The German artist HA Schult, known for his work with trash, designed the building, which included more than 12 coronasavethebeach.org tons of litter picked up from European beaches. The hotel began to receive bookings in the first few hours. This year, the cleanup took place in Litorali di Augusta in Sicily, Italy. SIGNIFICANCE/RELEVANCEBrands will be key partners in enabling creative strategies for renewal, taking local CSR initiatives to the next level. Brandscan show their creativity, innovative spirit and community-mindedness by tapping into the “urban hack” mind-set. POTENTIALAt a time when CSR and more traditional marketing efforts are meshing, Creative Urban Renewal projects present waysfor brands to both help communities/neighborhoods and craft an image as innovative, original and cool. These projectstend to be sustainable, fun, educational and interactive—key areas/attributes for brands. Our research suggests thatconsumers would be open to brand-sponsored community renewal projects, with 79% of respondents agreeing with thestatement, “I wish a brand or company would help by making substantial investments to improve my local community.”(See figure 3a.)With today’s “we vs. me” mind-set and DIY ethos, there is ample opportunity for brands to partner with professionals,residents and nonprofits to spearhead innovative ideas and solutions. In our survey, 77% of Americans, Britons andCanadians agreed that “Members of my local community are willing and able to roll up their sleeves and work on projectsthat will improve our town; we just need the tools and leadership to do it.” (See figure 3a.) By creating opportunities foractive participation in the revitalization of a space, brands can further generate goodwill by giving citizens a sense ofownership over the project and pride in their achievements.Large corporations can also leverage their economic weight on behalf of communities and side with citizens to spur localgovernment action. 25
  26. 26. CREATIVE URBAN RENEWALThe efforts must be substantial: This movement has roots in anti-consumerist notions, and skeptical consumers willquickly smell empty gestures. Additionally, with 89% of survey respondents in agreement, local citizenry must be involvedin the decision-making process before brands or big corporations embark on projects to improve a community. (SeeAppendix, figure 3e; for country breakdowns, see Appendix, figures 3f-h.) “Unfortunately, we’re still in the phase of insincerity. The next evolution of this is when some of those companies actually say, ‘Look, we need to do this because it makes great business sense for us, because it creates a meaningful environment in which to be employed.’ The more we push on creating change and improving quality of life for people through what we do best, which is technologies and business models and investments, the more comes to us. And the more that comes to us, the more we can reinvest. And it creates an acceleration of not only our business ethic and our business model, and our business, but also it starts to have real tangible, measurable impacts on people.” —STEVE LEWIS, CEO and co-founder, Living PlanIT, which builds large integrated technology platforms for managing city operations 26
  27. 27. RIPPING A PAGE FROMTHE FOR-PROFIT PLAYBOOK DRIVERS TREND MANIFESTATIONS }} Surge in public-private Nonprofit organizations are partnerships (Walmart and increasingly adopting for-profit Treasure Coast Food Bank, tactics, fusing social IBM and Turkish nonprofit A race for funding Toplum Gönüllüleri Vakfi, consciousness with business HP and mothers2mothers, acumen and focusing on micro-volunteering) achieving visible change. The Desire for self-sufficiency shift from blanket or black-hole benevolence to targeted giving Surge in social enterprises and venture philanthropy places (Me to We, Breadpig)Donor insistence on results more emphasis on cause and effect, measurable results and Venture philanthropy funds return on investment. (Acumen Fund, International Finance Corporation) SIGNIFICANCE/RELEVANCENonprofits and other socially focused efforts will need more than good intentions to stay viable as supporters seekmeasurable change. Indeed, with the rise of social enterprises, we’ll see a more open-minded attitude toward the meansthat organizations use to achieve their ends, as long as that means real-world impact. 27
  28. 28. RIPPING A PAGE FROM THE FOR-PROFIT PLAYBOOK TRENDNonprofit organizations are increasingly adopting for-profit tactics, fusing social consciousness with business acumenand focusing on achieving visible change. The shift from blanket or black-hole benevolence to targeted giving andventure philanthropy places more emphasis on cause and effect, measurable results and return on investment. In the next few years, CSR and social change initiatives will evolve “from traditional development models of aid provided with an undetermined end-game for sustainability to a business-plan approach with a quantifiable baseline, benchmarks, outcomes and timeline for sustainability.” —WALKER MORRIS, Malawi country executive, Clinton Foundation DRIVERSA race for funding: With more organizations vying for less money, nonprofits need impressive numbers to get theattention of donors and show why they’re the better investment.During the recession, nonprofitsfound themselves in crisis whendonations diminished and revenuestreams dried up. (According to a2010 report by The NonprofitResearch Collaborative, 37% of2,500-plus organizations surveyedreported a decrease in fundingduring the first nine months of theyear.) At the same time, moreorganizations require funding—in the U.S., for example, the numberof registered nonprofits grew bynearly 380,000 between 1999 and2009. There’s an excess of choice:86% of respondents said they are tableatnyoverwhelmed by the number ofsocial causes and charities out there.Desire for self-sufficiency: Since private donations, grants and government funding often carry stipulations as to how theycan be used, nonprofits are increasingly looking for ways to develop their autonomy. By creating steady self-generatedrevenue streams, they gain the flexibility and security needed to allocate funds as they see fit.Donor insistence on results: Today’s well-informed consumers expect total transparency from the nonprofits they support(see “The End of Goodwashing” on page 6 for more): They want to know not only how funds are spent but also exactlywhat kind of impact those funds are making. 28
  29. 29. RIPPING A PAGE FROM THE FOR-PROFIT PLAYBOOK MANIFESTATIONSSurge in public-private partnerships: Instead of simply donating funds as part of their CSRefforts, more corporations and professionals are lending their know-how, boosting the ability ofnonprofits to achieve their goals. • Walmart and Treasure Coast Food Bank: In 2009, Florida-based Treasure Coast Food Bank leveraged Walmart’s famed logistical stophunger.org expertise to determine how to deliver more meals each week with their existing resources. Members of the Walmart distribution facebook.com/wlamart team helped the food bank build its warehousing capabilities, improve storage and more rapidly sort food; they also developed new truck routes to facilitate more frequent food deliveries. The food bank was able to increase its culinary partners from 140 to 200 and doubled the number of meals it serves weekly.• IBM and Turkish nonprofit Toplum Gönüllüleri Vakfı: In Turkey, IBM volunteers partnered with the educational nonprofit Toplum Gönüllüleri Vakfı (Community Volunteers Foundation), using the company’s “Share project management skills” solution to help develop and teach a children’s literacy program. This and similar efforts are coordinated via IBM’s On Demand Community portal, which allows IBM volunteers to combine their skills and IBM’s technology. Since its 2003 launch, 170,000 IBM employees have logged more than 12 million hours of volunteer service via the site.• HP and mothers2mothers: As part of a new partnership with mothers2mothers—a South African group that works to prevent HIV- positive mothers from transmitting the virus to their children—HP is using its database, cloud and mobile technologies to digitize the organization’s patient records. This will allow mothers2mothers to share patient information across regions, helping counselors provide better education and support services, and eventually m2m.org enable staff to collect and share basic data via mobile phones.• Micro-volunteering: A new crop of organizations connects skilled volunteers with nonprofits in need of relevant services, such as logo design, accounting help or membership catchafire.org development strategies. Examples include Catchafire and Sparked, both for-profits, and the nonprofit Taproot Foundation. 29
  30. 30. RIPPING A PAGE FROM THE FOR-PROFIT PLAYBOOK metowe.comSurge in social enterprises: Entrepreneurs are startingphilanthropy-driven organizations based around for-profitmodels.• Me to We: Harnessing for-profit strategies to achieve socially responsible objectives, this retailer was launched by the founders of Free the Children with the sole purpose of creating a steady revenue stream for the charity. It sells environmentally friendly and socially conscious apparel, self-empowerment books and music, and also coordinates adventure travel trips, donating half the profits to Free the Children and investing the other half back into the business. In 2010, Me to We donated $1 million in cash and in-kind contributions. youtube.com/MeToWe “With innovation as the driving force, Me to We is redefining how to do business, with big ideas that push the boundaries of social entrepreneurship. As a social enterprise, Me to We is a revenue- generating business with a twist. We measure our bottom line by the number of lives we change. We calculate our return on investment by our social and environmental impacts.” —Me to We annual report, 2010• Breadpig: This organization sells products such as magnets, clothing and posters at a profit then donates the proceeds to its nonprofit “allies,” which include Room to Read and the San Francisco SPCA. One of its objectives is to forge long-term relationships that include collaborative projects. Since it was founded in 2008, Breadpig has raised and donated more breadpig.com than $186,000. 30
  31. 31. RIPPING A PAGE FROM THE FOR-PROFIT PLAYBOOKVenture philanthropy funds: These nonprofits are like venture capitalorganizations—they provide seed money to nascent businesses—except theyinvest exclusively in socially responsible enterprises. Once a company hasdeveloped, it must repay this investment, but interest rates are low; all returnsfrom investments are directed back into the fund.• Acumen Fund: Acumen provides loans or equity—but not grants—that acumenfund.org typically range from $300,000 to $2.5 million, describing this funding as “patient capital.” To be eligible for support, organizations must provide low-income consumers with access to water, health care, housing, agricultural inputs or alternative energy. In 2007, for example, Acumen invested in Jamii Bora, a Kenyan microfinance organization that supported the construction of 750 low-income homes outside Nairobi; the organization repaid in full by 2010.• International Finance Corporation: Part of the World Bank Group, the IFC supports sustainable economic growth in emerging markets by providing private-sector investment and advisory services. The organization will support only projects that, among other things, have good prospects of being profitable, benefit the local economy and are socially and environmentally sound. In fiscal year 2010, the IFC committed $18 billion to 528 projects across the globe. Average returns on assets and capital ranged from around 3% to 10%. SIGNIFICANCE/RELEVANCENonprofits and other socially focused efforts will need more than good intentions to stay viable as supporters seekmeasurable change. Indeed, with the rise of social enterprises such as Me to We and Breadpig, we’ll see a more open-minded attitude toward the means that organizations use to achieve their ends, as long as that means real-world impact. POTENTIALWe’ll see more partnerships and collaborations between for- and nonprofits, allowing charities to leverage considerableresources. Organizations can even outsource the implementation of a project while handling the rest of the responsibilities.ColaLife, for example, turned to Coca-Cola to help in its mission to deliver hydration packs to impoverished communities indeveloping countries, since the company has one of the world’s most advanced distribution networks. ColaLifemanufactures the packs and prepares them for shipping, while Coca-Cola aids the cause by providing access to itsdistribution network; the scheme is being tested in Zambia.Such relationships offer benefits to both parties: Brands can earn CSR points (at a relatively low cost, in some cases), whilenonprofits become more efficient and effective. 31

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