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STRATEGY

Profits with a Purpose

Roger Hamilton founded XL Group as a way of uniting entrepreneurs around the world with one common goal -- giving back. Why being profitable can also be good for society.
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This January, 50 entrepreneurs from across the nation will travel to India on a social mission to help alleviate poverty in some of the country's poorest villages. The Pioneer Club, as the group is called, is being headed by Roger Hamilton, founder of the global social enterprise network XL Group, which seeks to unite entrepreneurs worldwide around the common goal of giving back.

In conjunction with The Hunger Project organization, Hamilton and his group of entrepreneurs will work to empower the elected leaders of villages throughout India -- many of whom are women -- and help them gain greater access to resources they need to enact change amongst their populations.

On a much broader scale, Hamilton and his organization, the XL Group -- XL stands for "Extraordinary Lives" -- aims to inspire entrepreneurs to realize their potential to facilitate change in their own communities. The organization, founded in 2001 in Singapore, has expanded rapidly in the past few years and now has a growing presence in cities across North America.

In addition to opening new networking centers across the globe, Hamilton teaches at the Entrepreneur Business School in Bali, puts out a monthly magazine that reports on the latest happenings in the social enterprise community, and runs an XL radio broadcast. In between his many commitments, Hamilton sat down with Inc.com to talk about why he is so dedicated to social enterprises and what it means to lead an "extraordinary life."

What was the idea behind taking a group of American entrepreneurs to India to alleviate poverty?

Because the XL network is connected to social entrepreneurs all over Asia Pacific, we saw that a really powerful way to effective giving was taking a group of entrepreneurs who could see first hand what was happening in India. We connected with the Hunger Project because the CEO of the Hunger Project in Australia is one of the members within our network.

And what the Hunger Project does is it contributes not just money but also time to train the women in India in the most impoverished villages towards taking elected roles where they can really affect change. We will be training 50,000 women who have elected roles and whose decisions affect 15 million people in India, which is about 8 to 10 percent of the extreme poor in the country. The trip that we're all going to make in January is coinciding with the 60th commemoration of Gandhi's death.

What will you actually be doing on the trip to India?

What actually happens is with the funding that The Hunger Project has, they are able to put their grassroots people on the ground in these villages and they are already working there on a permanent basis supporting the women with resources and training them to become self-sufficient.

In terms of the 50 people we are taking -- every one of us are entrepreneurs -- we all come from different industries, and it's everything from biotech to retail to technology.  Every one of us comes with different skill sets, and by coming through for this 10 day trip, we will meet with industrial leaders and political leaders of India and then actually be on the ground where the work is happening. We will get involved in the educational process ourselves.

My goal is from this initial group that we call the Pioneer Club, there will be a series of different entrepreneurs within the group who will take on mentorships and sponsorships in all different villages in addition to what we are already contributing. This is not just a one time trip, but something that will be the beginning of ongoing projects, not just in India, but in Africa and in other locations around the world as well.

What do you want entrepreneurs to get out of the experience of going to India?

It's interesting, because when you have a group of entrepreneurs who know how to come up with innovative solutions to problems in their local markets, when they have the opportunity to see challenges that they might not have been aware of and they see how they can actually make a difference somewhere else, it's incredible how quickly change happens.

I'll give you an example of that. When the tsunami happened and it affected so much of Indonesia and Thailand, while all the aid agencies were busy collecting money and seeing what kind of relief they could be sending, there were already entrepreneurs and business groups on the ground sponsoring different villages and finding solutions on the ground for what the [victims] needed. They could actually affect change very, very quickly.

Rather than waiting for the handouts, the entrepreneurs were really looking for the right tools to just get the communities going again. There are a lot of great examples of what happens when entrepreneurs get on the ground and make a difference.

What do you think are some of the common misconceptions about social entrepreneurship?

I think that when you look at some concepts of social entrepreneurship, the idea some people get is that it’s about non-profits looking for ways to be more entrepreneurial, or it's entrepreneurs who are running businesses where they simply give their profits to charity.

Then someone like Muhammad Yunus [founder of Grameen Bank] comes along and wins the Nobel Peace Prize [in 2006] and he's a great example of what a true social entrepreneur is. It's not a matter of him making a profitable business so he can just give money away. What he's actually doing is connecting with people and turning them into entrepreneurs, and as a result, taking millions of people out of poverty in Bangladesh.

So definitely there are misconceptions of the idea, one of them being that the whole form of what a social enterprise looks like is something which exists primarily to do good. It's not. It's there to do good, but it's also there to be profitable as well so that it can compete alongside profit-making ventures for capital, for the right customers, for the right partners, and to be sustainable.

I think there's a second part to the misconception, which is that a social entrepreneur is someone who runs an enterprise that is not as competitive or as profitable as someone who is just out for the money. I think what we're seeing more and more nowadays is that really is a myth.

So what would you say to entrepreneurs who are hesitant about contributing to a social cause because they feel that it would involve too much time?

I think that true wealth flows from information, and the more information that you have about your market, or the more information you have about your competitors and what they're doing, then the more effective you can be at being able to respond to challenges.

I think in exactly the same way, if there's anyone who's hesitant as to whether or not they should be connecting themselves with a greater cause within their business, then the way to empower themselves is really through information -- and it is by connecting with the right networks and the right people already out there who are proving that the things that they're doing work. From that information, entrepreneurs can now navigate through the challenge because they are much clearer as to what it is.

There are certainly a lot of causes in America and there's a lot of American companies who are focusing their efforts in America. But there are more and more companies that are also seeing they can make a huge difference overseas in some of the markets where they would like to do business, which includes especially China and India. There is nothing better than for an American company that is doing business with India, for example, to discover that they are not simply there to make a profit and do business but they're actually putting something back into that community as well.

When you started the XL Group in 2001, what did you hope it would accomplish, and do you think it has done so?

We had this mission of World Wide Wealth, which was really the idea of creating wealth and contributing wealth. So it wasn't simply a matter of donating to charities, but seeing the world more as a plumbing system. If you think of the more traditional ways of giving through charities or through donations, that's almost the bucket mentality where you're taking a bucket of charitable giving and you're passing it on to a person who needs it until they need more, and then you give them another bucket.

What we saw -- just from the way that entrepreneurs are connecting around the world -- we had the opportunity to turn those buckets into a plumbing system that was permanent. The late Anita Roddick, who was the founder of The Body Shop, was one of the first to say that if you have a cause-based business, you have the opportunity to find profitable ways for consumers to be able to give directly through their consumption to the causes they believe in. And I think we're going to see more and more of that. 

So our goal when we started was to really grow this vision of World Wide Wealth around the world, and one part of that was we set up something called the Billion Dollar Challenge. The idea of that was we would be able to measure the different entrepreneurs around the world who wanted to be part of a social enterprise network and we'd be able to get them to donate at least 10 percent of their profits to charity. We're up to $53 million in pledges that have come through that program.

How are you getting the word out about social entrepreneurship to business owners in the United States?

The way that we have grown all around the world is through connecting regularly with entrepreneurs in all different countries. We basically start up in a city and we have events that take place every single month and we bring in the top entrepreneurs and top speakers who are there to pass information on and share ideas with entrepreneurs in every city. We just started that in Los Angeles earlier this year and in the coming year, we'll have a presence in 20 different cities in the U.S., and all sorts of American entrepreneurs will be able to connect with our entrepreneurs in India, in China, in Australia, and all over the Asia Pacific.

And what we hope will happen is two things. First of all, the entrepreneurs in America -- just like they have all around the world -- would find the right connections to be able to increase and grow their own business, and the second thing is they would be much more in touch with the different causes that are currently taking place around the world as well as ones that our social entrepreneurs are getting involved in.

We have over 1,500 events throughout the year, so there are at least five to six events happening every night of the week, and these happen all around the world at a local level with entrepreneurs sharing their ideas and initiatives with each other.

Last updated: Dec 12, 2007




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