New tools for change
"Social entrepreneurs are creating new business models and new tools for change," says Jed Emerson of the Generation Foundation.
Are big businesses using these new tools to change their practices for the better and how are non-profit organizations reacting?
One thing is clear, since the 1990s the non-profit sector has undergone enormous change.
"There have been lots of pressures on NGOs to change -- more competition for money from philanthropists or governments, plus there are just so many more challenges that we're aware of today," says Jerr Boschee, Executive Director of The Institute for Social Entrepreneurs.
As an expert on social enterprise he's seen more non-profits accepting that earned revenue is something they should be pursuing, giving up the idea that making money to do more good is an inherently bad thing.
Bangladeshi non-profit BRAC began as a relief and relocation organization after the trauma of the Liberation War of 1971. Since then it has transformed itself into the world's largest not-for-profit organization employing nearly 100,000 people across the globe aiming to alleviate poverty. It's also 80 percent self-funded.
"There's nothing wrong with philanthropy or government aid, but it's a bit like a two-legged stool, what we're trying to do now is add the third leg in the form of self-sufficiency," said Boschee.
BLENDING VALUE
Mixing business models with social values is a concept Jed Emerson has pioneered. But how are traditional companies changing the way they're run and realising the potential of this "blended value?"
Through corporate social responsibility (CSR) companies have seen the value in being seen to be doing good, but will they ever be as committed to social projects as much as profits?
This isn't an issue in the same way it is for non-profit organizations, but social values will have to come first for the long term good of traditional corporations, says Jed Emerson.
"Companies actually get a competitive advantage over other businesses by doing right. The corporations that are too busy looking at the numbers are going to get whacked over the head by those that are able to assess trends and issues such as Aids and climate change, because these issues have an enormous impact on how a company performs."
CHANGING ATTITUDES
The idea that companies will invest in communities and social projects as much as product development might seem fanciful, but there are signs that corporate attitudes are changing.
"It's the sales and business strategists of these companies that are leading these changes, not their marketing departments," says Emerson.
"Every business decision can also be a social decision and that blended value is what other businesses can achieve as well," says Rick Aubry of Rubicon.
General Electric (GE) has been pursuing green product development with its Ecomagination line. Last year it generated $10 billion in revenue for the company.
Their website would have you believe they are a company that is more interested in solving the problems of climate change than making profits and GE's CEO Jeffrey Immelt has often stated that sustainability is the new bottom line of business.
It may be easy to be cynical about the socially responsible and environmental projects of corporations, but Emerson thinks we also have to look at companies in ways other than just being good or bad.
"We have to look further than just a black and white version of a corporation that is just in existence to make money," says Emerson.
Home Depot, the world's largest home improvement chain with over 1,800 stores in the U.S. unveiled a new green labeling program earlier this year, while GE's ongoing Ecomagination strategy promotes the company's efforts to develop products to address climate change.
"It's obvious they're not doing it because they're greenies, but because it's the right thing to do to make money," says Emerson.
"Wal-Mart, America's largest corporation and the company we love to hate because of dubious labor-practices, has re-evaluated its transportation strategy to be more efficient and less carbon heavy.
"These aren't revolutionary, more evolutionary, but these are the types of changes that will stand the test of time," says Emerson.
What do you think? Are companies changing for the better and non-profits are becoming more effective? Send us an email and have your say.
Money is and always will be the driven force of economy. So, the big issue is to teach companies to do things using less energy and consequently increasing their profits.
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