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Making Good

Ways in which small companies are creatively leveraging their resources to attack various social problems.
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It's a myth that you have to be a big corporation or be awash in cash to make a powerful contribution to your community. Here's how small companies from coast to coast are creatively leveraging their products and skills -- and even their customers and suppliers -- to attack a variety of social problems

I'm not a socially responsible person. Yes, I recycle applesauce jars and soda cans. Yes, I throw the odd quarter into a homeless person's cup. But I don't spend a single hour of a single week doing something for someone who isn't an employer, a friend, or a family member. Yet I desperately want to. We all do.

But where to start? The very breadth and severity of the world's problems suggest that nothing less than full-time devotion to them will make a dent. As a small-company owner especially, how can you afford to give away money or hours when you're struggling to make your payroll? How can you come up with anything as powerful and effective as those well-known bulldozers of social responsibility, Ben & Jerry's and the Body Shop?

The truth is, small companies all over the country are inventing ways to give back to their communities. Their ideas -- often born of scarce resources -- are imaginative, fresh, and sometimes even daring. In the belief that every little bit helps, we've brought together several of their approaches to philanthropy as a guide to others who also have the urge to get more actively involved in the world around them.

We have purposely omitted some widely known examples -- companies like Greyston Bakery, which has created its own job-creation machine for welfare families in the Bronx, or Southern Kitchens Inc., in Minneapolis, which hires ex-convicts and other hard-to-employ people. Or Stonyfield Farm Yogurt Inc., in Londonderry, N.H., a business that was started to support family dairy farmers in New England. All those companies are highly effective, but they began life with a social mission. We focused instead on companies that started out with a business agenda and found a way to incorporate social purpose into that mission.

Making that journey is different for every company owner, but there are some common experiences. First, a company's altruistic activities mature, much as its business operations do. Companies that begin by simply giving away money tend to find that less satisfying as time goes on. Eventually, they want to add their personal imprint and amplify the effect that cash will have.

Second, doing good has its pitfalls. Just Desserts, a San Francisco bakery with a history of giving back, had one program fail because employees simply weren't interested in participating and another that threatened to collapse because of ineffectiveness -- the recipients weren't being rehabilitated. The Rumpp Co., a Body Shop franchise in Portland, Oreg., ended a program that involved employees' working at a shelter for battered women and children, because the employees found it too discouraging.

Finally, almost every company that successfully devised its own way of giving back was astounded at the ripple effect its drop in the bucket produced -- for employees and customers as well as their communities.

Here, then, are the folks who without much fanfare are making social responsibility part of their identity and, in the process, are making it easier for the rest of us to follow in their footsteps.

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Donate Your Product
Giving away your product may not be the most earthshaking of charitable activities, but it's a fabulous starting point for three reasons. It's simple to do. It links your business operations to your altruistic urges in a natural way. And it supports existing philanthropic organizations. That's important. Rather than reinventing the wheel, you can augment the effectiveness of an already well-developed program.

Laury Hammel, general manager and principal owner of the Longfellow Clubs, a $4.5-million health and recreation company in Wayland, Mass., is no late-stage convert to social responsibility. He is involved in 10 nonprofit foundations, 5 of which he founded, and also in a host of charities and community events. Even so, one of his company's most satisfying and enduring practices is to donate the use of its health-club facilities to kids with special needs. Hammel is about to celebrate the 16th year of the Handi-Racket Tennis Program, in which about 25 handicapped kids learn to play tennis weekly. Longfellow waives the court fees for the Saturday-afternoon sessions, and most of the tennis pros on hand are volunteers. Neither the kids nor the agency that runs the program and two similar ones in swimming and basketball is charged for use of the pool or the courts. Altogether, the three programs reach some 50 youngsters, about 80% of the children with disabilities in and around Wayland.

"The kids love coming out here," Hammel reports. "They never miss a day." The cost to Longfellow isn't enormous. Forgone tennis-court fees come to less than $3,000 a year. However, Longfellow's program requires gumption more than money. "We have to be committed to say, This is what we're offering, even if it sometimes gets in the way of what club members may want," Hammel says.

What could be more obvious than a bakery giving away its bread, muffins, and croissants to the homeless? Five years ago, when Saint Louis Bread Co. opened its doors, it decided not to discount its unsold goods at the end of each day but to donate the food to homeless shelters and food pantries in St. Louis. A modest charitable act, perhaps. But its effects have snowballed as the company has grown. Daily contributions from the company's 17 bakeries totaled some $700,000 retail last year -- almost 5% of the company's $15 million in annual revenues. And that's just one of three ongoing philanthropic programs that Saint Louis Bread conducts.

For Bill Seretta, president of Harper/ Connecting Point Computer Center, donating the machines and training services of his $7.5-million computer store is a way to contribute to the well-being of Portland, Maine. "Our business won't be healthy unless our community is healthy," he says. "I spend about 40% of my time in community proj-ects -- I see that as part of my job description." Seretta's company donates training directly to people who can use it, such as teachers and schoolchildren, and also to charitable efforts, such as auctions, which sell off Harper's classes to raise money. The company also has lent its computers for lengthy periods to an intrastate school program, a local theater, and a number of money-raising auctions.

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Involve Your Employees
The great appeal of getting your company involved in charitable efforts is that it enables you to magnify the effect of any good you do. Giving away your product is a prime example. Businesses, after all, have greater resources to draw on than individuals do. But social responsibility starts to become truly powerful when it harnesses dynamic resources, such as people, rather than static ones, such as money or products.

As an employer, you have a terrific opportunity to turn your employees into agents of change, whose growing sense of philanthropy will in turn influence others. Longfellow's philanthropy, for example, has proved contagious to its more than 200 full-and part-time employees. One of its aerobics instructors initiated a Dance for Heart event at the health club for the American Heart Association. Two others turned the club into a collection point for used coats and workout shoes, which were donated to the homeless.

Rhino Records, a young record company in Santa Monica, Calif., with annual revenues of $20 million, specifically rewards employees who engage in charitable activities. In one program, workers who contribute 16 hours of personal time per year in community service can take Christmas week off with pay. A second program kicks in for employees who exceed 16 hours of service. They can take equivalent time off, up to six days. Nearly all of Rhino's 100 employees participate in the first program and about half in the second, at a cost of about $20,000 a year to the company. The high participation rate is partly a result of the company's active promotion of social consciousness. It organizes monthly speakers on a wide range of social, economic, and political issues, such as the Los Angeles riots, old-growth forests, and Native American rights. Everyone who attends gets a free lunch.

While freedom of choice is Rhino's philosophy, it may be tempting to a company to channel employees toward a favorite charity. On one level it makes sense, too -- the more hours your company pours into a specific project, the greater effect you'll have. The question is, Do you want to dictate what your employees should care about? Many company owners solve that problem by giving employees the chance to work in both a cause of their own and a company-targeted charity.

Watering Inc., a publisher of automotive magazines in Bennington, Vt., has chosen that approach. One program is designed to improve parents' involvement in their children's education. Employees may take two days of paid vacation per year to go to school with one of their children. Childless employees can opt to accompany a neighbor's child or volunteer at a school. The downside of such targeted programs is that they don't inspire everyone to act. Only about 10 of Watering's 85 employees participate in the education program. But the company has 100% participation in another philanthropic initiative: it grants all employees $300 a year to give to the charities of their choice. In a separate program, Watering, which has annual revenues of $18.5 million, will match an employee's additional personal gift to a charity, up to $300.

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Attract Other Companies
Possibly the simplest and cheapest thing you can do to make a difference in the world is to be the first to take a stand on an issue, then involve others. For example, as part of his company's celebration of Earth Day, Longfellow's Hammel spearheaded an environmental task force at a local chamber of commerce. The group got 50 local businesses to sign a pledge to commit to following 10 environmentally sound practices and published it in the local newspaper.

Leveraging its reputation as an innovator for social change, Just Desserts, the San Francisco bakery, has persuaded 35 other companies to join with it to adopt an elementary school in a low-income area. "Some of the kids are malnourished, and many of them come from homes where they're abused," cofounder Elliot Hoffman says. "It's just a very poor environment for learning -- the next logical step from there is jail." Last fall the adopters got 100 volunteers to plant gardens and trees on the school grounds. In April about 700 volunteers, drawn mostly from the sponsoring companies, painted the school and refurbished 10 rooms, including classrooms, the gymnasium, the library, and the auditorium.

Serving as a role model is important when dealing with controversial or relatively unknown causes. Bill Seretta, of Harper/Connecting Point Computer Center, worried that his personal and corporate championing of a gay-and lesbian-rights bill in Maine would alienate some customers. Instead, Harper's public position seemed to validate the private opinions of other company owners. "I got a lot of positive response from other businesspeople," Seretta says. "They saw it as a brave thing to do."

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Leverage Your Company's Expertise
Lynn Gilbert Bignell was inspired to volunteer after reading The Day America Told the Truth, by James Patterson and Peter Kim (Prentice Hall, 1991), a book that paints a vivid portrait of America's social impoverishment. The question was, How could her executive-search company, Gilbert Tweed Associates Inc., make the biggest impact? Management-committee members considered and rejected allowing employees to volunteer on company time at a not-for-profit company. "Giving people time off doesn't leverage the talent we have here," she explains. "Certainly it has meaning, but it doesn't accomplish what we're capable of."

Instead, Bignell, cofounder Janet Tweed, and partner Stephanie Pinson decided to use their company's skills to enhance nonprofit operations. "Why send our 50 employees out as volunteers when Gilbert Tweed can teach nonprofit organizations how to recruit 500 better volunteers for themselves?" she asks. So the company ran a lottery for nonprofits devoted to health care or education. The winners would receive free executive searches for a high-level position; human-resources consulting services; or admission to one of the firm's seminars on selecting and retaining personnel.

The $5.8-million company, which is based in New York City, received more than 500 inquiries from organizations all over the country, including Alaska, and picked 20 winners. Bignell considers the lottery a far superior way to give back than the occasional pro bono work her firm used to do. "This is a much more concerted, proactive effort, as opposed to simply responding to a client that you couldn't say no to," she says.

Dough for Kids, one of Saint Louis Bread's philanthropic programs, also uses the company's expertise as a baker to help local public and private schools. In coordination with the schools, the company supplies students with $12.60 gift certificates for its products. The kids sell the certificates for $5 but reimburse the company only $2.50 per certificate. The schools' proceeds go toward equipment and supplies.

Gardeners' Supply, a mail-order company in Burlington, Vt., has ambitiously integrated company skills with social purpose. From the company's beginning, in 1983, says president Will Raap, "we had the goal of generating profits so those profits could further our mission of bringing the joys and rewards of gardening to more people." The company's oldest social program collects and composts grass clippings and leaves for free in the Burlington area; the program has been so successful the county now runs it, collecting 3,000 to 4,000 tons a year, and then makes the nutrient-rich compost available to gardeners. To reach its goal of recycling 30% of the community's total waste, the company also composts food scraps. The compost is used to grow produce for a local medical-center cafeteria. More than half the company's 120 employees participate in the composting projects or are members of the company's community farm, which enables families in the Burlington area to jointly own and work a garden and share in its produce.

Raap estimates that the direct costs of equipment, trucks, and staff associated with those and other philanthropic activities total $50,000 to $75,000 a year. The company, which has annual revenues of nearly $20 million, doesn't count the cost of the time its employees donate. Raap believes that using the company's special skills in community projects sharpens those skills. "When we're growing food for people or making compost, it gives us a better appreciation of how to help our community -- and customers -- learn to do the same."

Suzy Becker, owner of the Widget Factory Cards Inc., a greeting-card publisher in Concord, Mass., has only three full-time employees and annual revenues of less than $1 million, yet she has mapped out a sophisticated giving strategy that leverages Widget's expertise in communications while enlisting its network of suppliers and customers. Focusing on nettlesome issues that have surfaced in the personal lives of Becker and her staff, Widget runs an educational campaign every other year. Its first, called I Don't Put Up with Put-downs, showed people how to take a stand against prejudice. On the back of its greeting cards Widget printed a coupon that could be sent to the company with $1 for a booklet of practical advice and a button. That initial effort raised $7,000, which Widget donated to A World of Difference, a national diversity-education program sponsored by the Anti-Defamation League. This year's campaign will suggest ways in which people can become better-informed patients.

* * *

Enlist Suppliers and Customers
Becker has had far greater success in terms of dollars raised by calling on Widget's suppliers and business contacts to support her causes. When she first approached suppliers to become sponsors in the five-day, 500-mile bike rides Widget put together to benefit AIDS education, she was apprehensive. "I was hesitant," she remembers. "I thought, I'm asking them to do me a favor." In fact, she found they were eager to support both the cause and Widget itself. "People really want to feel like they can help a small company make a difference," she says. Together, the first two rides raised more than $75,000.

Music for Little People (MFLP), a mail-order and record company in Redway, Calif., works even harder to enlist suppliers and customers to contribute to a charitable cause. "One of the questions we ask a new or potential supplier is, 'Do you make donations or support any charitable activities that we can mention in our catalog?' " says executive vice-president Jimmy Durchslag. "We have limited space in the catalog. So if we have a number of suppliers who can supply the same product and one is more socially conscious than the others, it could tip the balance in its favor." The company also occasionally is able to persuade suppliers to join MFLP in supporting a cause by donating part of the profits on a product. Enhanced Audio Systems, an audiocassette producer in Emeryville, Calif., agreed to donate 25¢ of every one of its tapes sold through the catalog to the MFLP Foundation, which helps children and their families learn about the arts. Similarly, Colleen's Garden, a company owned by a Native American family in Marvin, S. Dak., sold its products at a lower wholesale price to MFLP, which donated the difference to Project Lakota, which benefits an Indian reservation.

The result is clearly visible to a customer perusing MFLP's catalogs. A good third of the audiotapes and compact discs function as fund-raisers for a range of charities. For example, every "Walk Your Talk" drum and T-shirt purchased from the company's New Year's sale catalog triggers a $1 contribution toward helping the Sinkyone Intertribal Wilderness Council preserve U.S. forests and tribal customs.

The advantage of that technique is that by involving suppliers and customers, you can bring some volume to the giving process. MFLP raised $28,352 during a year in which it had $9.3 million in revenues. Says Durchslag: "That money is committed whether we make money or lose money."

Yakima Products Inc., a car-rack maker in Arcata, Calif., and Hanna Andersson, a children's clothing mail-order company in Portland, Oreg., focus on the largest group they have influence over: customers. Unable to avoid using plastic and foam in packing its high-end roof-rack systems, Yakima created a way for customers to easily mail the packaging materials back -- free. The company reuses the foam and polyethylene-shell portions of the container and recycles the outer chipboard. Hanna Andersson asks customers to recycle its products, too. Any used piece of the company's clothing that isn't torn or stained can be sent back, and 20% of the returned item's original price will be applied to the customer's next purchase. The company has washed and donated 107,000 garments to needy children since sending out its first catalog, nine years ago.

Sebastian International, a maker of skin, hair, and makeup products, based in Woodland Hills, Calif., established Club UNITE (for Unity Now Is a Tomorrow for Everyone) to make philanthropists out of salon customers. Participants write a check for $10 to one of seven foundations that Sebastian has screened and immediately receive $15 in Sebastian products. As club members, they also get a passport of coupons for products and services worth up to $65. Since 1991 the company, which has some $100 million in revenues, has channeled more than $4 million to the foundations through Club UNITE and outright donations.

Allying your customers to your good cause makes it easy for them to feel they're making an impact on the world. If they already know and like your product, they'll often go out of their way to support your fund-raising drive. When Barry Steinberg, founder and president of Direct Tire Sales, a $6-million tire retailer in Watertown, Mass., ran a program allocating to the Jimmy Fund/Dana-Farber Cancer Institute 3% of every purchase made by customers who mentioned the company's radio ad campaign from August to December, customers streamed in. Direct Tire's program raised $14,800 in its first year and $21,060 in its second. Steinberg remembers one customer who didn't need tires but came in to buy a $300 Christmas gift certificate just so that 3% of his money would go to the cancer-research institute.

* * *

The Payoff
It may be crass to discuss the payoff of doing good. But let's face it, there are ramifications. When asked, company owners have a wide range of answers.

They are able to attract and retain employees longer. Their customers feel a more intense bond with them. They believe that what they put out in the world will come back to them. Only one of the dozens we interviewed talked openly about enjoying the good publicity that often arises from such programs. In the end, all the answers -- except that last one -- revolve around one factor: a social purpose injects humanity into the process of commerce. Business has been defined -- and perceived -- as soulless for so long that when people get a chance to express a bit of caring through their company, they love it.


PASS IT ON

Lewis Smoot believes in mentoring -- with a twist

The animating principle of Lewis Smoot Sr.'s socially responsible activities is that next to nothing is accomplished by giveaways. The way he sees it, if you give money away to people, you're not effecting a permanent improvement in their lives. His construction company, the Smoot Corp., based in Columbus, Ohio, acts as a mentor to struggling minority contractors. But it's not a cakewalk for the companies that are sponsored. "The success of our mentorship is tied to the profitability of the mentorship," Smoot says. A less exacting standard would rob the mentored company of the chance for long-lasting self-sufficiency.

Unlike many programs in which a successful company meets sporadically with one or more fledgling businesses, Smoot targets only one company at a time and develops a true working partnership. The Smoot Corp. is currently working with the Oscar Robertson Co. of Indiana, a small contracting business in Indianapolis owned by Oscar Robertson, a former professional basketball player and all-American from the University of Cincinnati, and Rodney Bynum. Though the region offers a lot of construction opportunities, the Oscar Robertson Co. lacked the administrative skills and financial wherewithal to bid on large jobs. Smoot has entered into a five-year partnership with the company, in which Smoot's professionals work alongside and train Robertson and Bynum's staff in a new, separate Indianapolis office called ORS. The Smoot Corp. also brings its superior financial position -- and bonding ability -- to the jobs the partnership bids on. Initially, Smoot will get 70% of the profits, and the Oscar Robertson Co. will collect 30%. The goal is to bring that ratio to 55% to 45% at the end of five years, with Smoot receiving the larger share to compensate for the computers and ser-vices it provides. Oscar Robertson is the second minority-owned company the Smoot Corp. has taken under its wing.

The catch to being a Smoot apprentice is that you are required to return the favor to another needy company. "When we're through with this contractor, it will have the responsibility to do the same with a young contractor emerging in Indianapolis," explains Smoot. "If I do one mentorship, and the person who works with me does one, and we continue that, then we will have far more successful entrepreneurs than we had before."


HARD LABOR

Elliot Hoffman puts ex-convicts to work

San Francisco bakery Just Desserts' social consciousness was inspired to take a new direction two years ago, when owner Elliot Hoffman took a walk in the San Francisco County Jail's 10-acre organic garden. Hoffman, having just finished a fairly depressing tour of the institution, gazed at the healthy plants and listened to one of the convicts talk about the garden. "Here's this big guy, who a few years earlier would just as soon have slit my throat, talking about how he wants to change his life," recalls Hoffman.

Working with Cathrine Sneed, the counselor who established the jail's garden, Hoffman turned the one-acre piece of dirt in back of his bakery into a working garden tilled by ex-convicts. On any given day 20 to 30 former prisoners or street people work there. They are paid a daily stipend drawn from grants and city funding. It's a commercial enterprise, also: Just Desserts buys strawberries from the garden, and a trendy restaurant buys its produce.

If it had stopped there, this social experiment might be a lovely story with some nice symbolism. But because Hoffman's project is so near his company and he and his employees rub shoulders with the gardeners every day, an unusual alchemy took place. "The ex-prisoners see and touch and talk with people like me every day," Hoffman says. "There's a lot of mutual respect. And they see people leading productive lives." He grew so confident about 6 of the garden workers that he hired them as full-time bakery employees.

Remembering one of his most recent hires, a woman who had done time for dealing marijuana, Hoffman says: "When she found out we wanted to hire her, she came over and gave me the greatest big hug. It really changes your perception of social justice, of the disenfranchised in this country. You begin to see that the people that have grown up in this environment might as well be on the planet Mars. Drugs is not a fun life. They want a job. They want a shot at a decent, productive life."

Just Desserts' garden project has propagated other proj-ects, too. The city of San Francisco has subcontracted the planting of 2,000 trees around the city to a rotating group of 10 of the company's garden workers.

Hoffman feels the wear and tear of balancing business, family, and community needs, but thinks companies are in a special position to act. "I really believe that business has to play a larger role in changing our society," he says. "Businesspeople, especially those in smaller companies, know how to get things done. We tend to think outside the box. We need to bring that creativity to our community. Disenfranchised people need on-ramps into society. Those aren't going to come from the federal government."

Last updated: May 1, 1993




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