Feb
26
The Robber Barons of Social Change
Toward Freedom | Mark Engler and Arthur PhillipsTags: Business Ethics, Corporate Governance, Economics, Philanthrocapitalism
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I think I need to read this book: Small Change: Why Business Won’t Save the World by Michael Edwards. Read the review by Mark Engler and Arthur Phillips here.
Excerpt:
The Ben & Jerry’s story is but a small cautionary tale about the still-growing and already far-reaching field of “philanthrocapitalism.” This is the term that author Michael Edwards uses in his new book, Small Change: Why Business Won’t Save the World, to describe a wide range of activities. It includes Silicon Valley CEOs using “venture philanthropy” to fund new, business-minded nonprofits; stock market traders developing socially weighted investment funds; bankers extending microcredit loans to the poor; and “social entrepreneurs” aiming to simultaneously serve a “double bottom line” of positive public impact and shareholder return.The activities covered under the umbrella of philanthrocapitalism are diverse enough to offer exceptions to any generalization about the category. But its practitioners would almost uniformly describe themselves as “results-oriented,” implicitly critiquing the ineffectiveness of existing nonprofits and voluntary organizations. Their unifying idea is that business is more efficient and outcome-driven than government and civil society, and that unleashing market forces is the best means of addressing entrenched problems such as poverty, malnutrition, preventable disease, and poor education.
In Edwards’ words, “the basic message of this movement is pretty clear: Traditional ways of solving social problems do not work, so business thinking and market forces should be added to the mix.” During his nine-year tenure as a director at the Ford Foundation, Edwards saw the popularity of this argument skyrocket. He writes, “if I had dollar for every time someone has lectured me on the virtues of business thinking for foundations and nonprofits, I’d be a philanthropist myself.”
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Feb
3
Good Intentions
Wall Street Journal - Julian EvansTags: Business Ethics, Obstructionists, Sustainability
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Photo by Limbo Poet
The Wall Street Journal seems to take great delight in the idea that the corporate social responsibility “fad” might be passing. Hmm. An 8% reduction in corporate donations in 2008? By what percentage did sales fall in that year? More importantly, it’s been quite awhile since anyone advanced the idea that a company’s commitment to corporate social responsibility should measured simply by its donations. Read the article here.
Excerpt:
When the going gets tough, costly good intentions can go out the window. Company spending has been squeezed by the global recession and budgets for corporate social responsibility have suffered disproportionately.A survey of U.K. businesses by KPMG and Business In The Community found a third of companies cut their corporate social responsibility budgets in 2009. Corporate philanthropy has also been hit, with a study by the Giving USA Foundation revealing that charitable donations by U.S. companies fell by 8% in inflation-adjusted terms in 2008.
Perhaps this is not so great a loss. There is a growing feeling among company executives that marginal initiatives, which can so easily be dispensed, are not enough to alter corporate behavior. In a speech last year, Stephen Green, chairman of U.K. bank HSBC, said: “There has been a tendency to compartmentalize so-called corporate social responsibility activities as an adjunct to the mainstream business activities.” Mr. Green believes in replacing corporate social responsibility with a new focus on “corporate sustainability,” which, rather than being an add-on to a business. “is about the raison d’être of the company itself.”
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