I completely agree that this is the right approach. I think all the various groups (e.g. Business Fights Poverty) and activities (SoCAP ‘08) showcase the momentum in this space. Hopefully the world financial meltdown will not slow it down. Or maybe it is the catalyst to drive it faster as donor funding dries up. Again, thanks for your insightful comments.

Mark

I think the main difference that has to be taken into account is the kind of for profit business where utilities go directly to stakeholders opposed to those organizations where you make profits but they are re-invested in the company. I don’t believe that we should keep organizations that do not make profits because they are not sustainable, making money is good in many senses, is the distribution of it that causes problems.

I was thinking if it could be possible to create NGOs committed to make profits for the communities and that at the same time could take some of it (a very small percentage) to their investors or for other projects. I believe if we could find a way to make valuable monetary contributions to these kind of social institutions we could probably be looking not only at an increase in funding but at the same time these organizations will be pushed to be better at planning, accountability and in general they might have a better performance.

We know that specially NGOs fail to meet expectations mainly because the funding is not constant and because sometimes people that manage them do not seem to think that business practices might give the organization a better change to be sustainable.

I guess that is what I mean when I asked what kind of sustainable activities can be profitable?

Let me know if I’m explaining myself clearly.

Thanks a lot for your quick response and for sharing your experience and opinions with me.

Best regards,
jessica

Jessica, I would turn around your question. Can a focus on profit make nonprofit businesses more sustainable? I believe that is the crux of the argument around social and creative capitalism, social enterprises, and what not.

This effort is in its infancy. At the Social Capital Markets conference a few weeks ago in San Francisco, a question was asked “Is there any successful social enterprise out there besides microfinancing?”

There really isn’t with the exception of smaller efforts. (Check out OneRoof). The examples are thus limited. I do know that for profit companies like Intel, AMD, and Microsoft are serious about focusing on very poor communities with new products and services, and have had limited success at this point at the very bottom of the pyramid.

These companies do see the opportunity. I think it will differ industry by industry depending on the difficulties of tapping into the BOP in cost effective ways.

The real reason of the limited examples is that doing this is very hard. For nonprofits and for profits.

I think there will be slow but improved progress as the social enterprise movement takes off. For profit companies that have the least barriers to entry will be the first to begin offering products and services, and as these hopefully great better conditions, prosperity and infrastructure, other companies will follow suit.

Regarding your last question: “if you would agree for example to impose some serious regulations to companies in order to make them more sustainable and socially responsible,” I would NOT impose regulations in this case as it would only add extra burden/cost and unnatural behaviors that in the long run would hurt vs. help. Regulations are necessary to prevent hazardous externalities that pure capitalism brings (e.g. exploiting labor, pollution, etc.). But forcing companies to invest and focus in specific areas puts government bureaucrats in charge of enforcing business dynamics that will force companies to inefficiently manage their business in a less impactful manner.

The movement has begun, and I think more examples will be forthcoming. Currently the movement is in experimental phase.

Thanks for your comments and your interest.

Mark Beckford

I have been reading your blog. I think is great you want to share your experiences with the community. I was wondering if you could let me know a couple of things:

In your experience what kind of sustainable activities can be also profitable? because we know that most of the sustainable development projects are conducted via NGOS and governments but many companies (other than the ones investing in renewable energies) don’t seem to have the same interest in developing markets, specially if they are small and isolated communities. A very good example would be driving a Lorrie around a couple of communities that have abundance let’s say in coconuts. Many communities if not all are more than capable of producing vegetables or fruits that can be a good source of income for the community but also for the company that decides to invest. I also think that big supermarkets limit greatly the possibility of these communities since they only buy wholesale and under just in time conditions. If they were to accept small portions of the products that local communities produce both would benefit.

Simple example but again it seems that stakeholders just want to get as much money out of their investments and most of the time that could be re-invested in the company or more projects. Anyways, I hope you could give me your business man opinions and if you would agree for example to impose some serious regulations to companies in order to make them more sustainable and socially responsible.

Thanks,
Jess