Corporate Philanthropy 2.0
Apr 24, 2023
In 2006, Warren Buffett made an awe-inspiring pledge to donate 99% of his wealth “during his lifetime or at death.” He also challenged other rich Americans to pledge at least 50% of their wealth. While I applaud this positive peer pressure, I’d like to add a challenge: Don’t wait until “death do we part.”
We need to reevaluate the current model of philanthropy. Up until the last couple of decades, it was acceptable for companies to do “business as usual”—often exploiting people and the planet as they made their money and then donating to mitigate the damages they caused.
This model no longer cuts it. No donation can stem the tide of environmental degradation and unethical human labor while companies push for faster, cheaper production. In fact, recent studies show that businesses are primarily responsible for emissions, and 77% of companies believe there is slavery in their supply chain.
While there will continue to be a place for organizations to donate to worthy causes after making a profit, companies must look inward at ways to embed social good into their everyday practices. This strategy grows in impact as a company advances. Looking at your supply chain may be the lowest-hanging fruit to get started.
Here are four tactics you can start incorporating today.
- Prioritize Social Procurement Jump on the social procurement bandwagon at little or no cost to your company by purchasing goods or services from an entity that embeds social good into their business model. For instance, are you short on customer service employees? There are social impact staffing agencies that allow you to hire remote teams abroad and ensure they make above-average wages. Do you need catering for an upcoming event? Look for a catering company or restaurant that focuses on hiring refugees, former inmates and other displaced people. What about swag or corporate gifting? Consider purchasing handmade, high-quality items from artisans around the world. (Full disclosure: My company offers this service, as do others.)
From jewelry to coding, social procurement companies hire, train and employ underserved populations ethically and with dignity. The perks of procurement: You already have the budget set aside for these services, and now you can also feel good about empowering those around you.
- Supply Chain Audit The term “audit” makes most people anxious. However, if you are like the majority of companies that suspect slavery in your supply chain, this audit can help alleviate that fear—or at least provide a picture of what is happening.
Knowledge is power, and solutions exist to remove slavery from your supply chain. For example, organizations like Slave-Free Alliance provide auditing and consulting services to help companies become more resilient to labor exploitation. There are also organizations that utilize cell phones and blockchain to ensure that all ingredients sourced and persons employed are ethically treated.
For the budget approach, download the GRI Standards and start self-reporting on your company's impact on the economy, environment, and people. Or just look up specific topics, like child labor and recycling.
Seek Certifications My inner seventh grader cringes at this suggestion—it feels hall monitor-esque. But the adult me loves this approach. Purchasing products that are certified is a huge time-saver. And unlike being the hall monitor, it makes you the popular kid in business. For example, most of us know that a Fair Trade registration mark means a product-based company has undergone a rigorous certification process. In return, we can shop more confidently, knowing that its employees receive dignified wages and experience safe labor practices. Similarly, OEKO-TEX is a gold standard certification for textiles and leathers, and a USP Verification focuses on dietary supplements that are unregulated by the FDA.
Direct Trade Although direct trade is still as relevant today as it was during the Oregon Trail, it's often not considered. This is a form of sourcing where companies build relationships with farmers, artisans, miners and others who sell their projects directly to businesses. It’s regularly used while working with cooperatives that are too small for Fair Trade certifications.
While this option cuts the cost of working with a mediator, it doesn’t absolve companies from ensuring their employees are provided with an ethical work environment. Consider directly asking those you employ about their work conditions and livelihood. But remember, receiving a paycheck is only one piece of the poverty alleviation pie.
When inspecting your supply chain, start by creating criteria and surveying your employees. Consider setting up an internal vetting tool to ensure your products are truly good for people and the planet. Do surveys of groups you work with to determine things like livable wages, child labor, workshop safety, raw material harvesting and waste disposal. Do in-person verification, and incorporate ongoing education to bring the group's practices into compliance with your standards.
No time to create your own tool? Try the Poverty Stoplight—an assessment tool that lets individuals self-report on fifty poverty indicators. It serves over two hundred thousand people in forty-seven countries. Better yet, it uses best practices for personalized change and connects individuals to local resources that will help improve their lives. Or review the Global Multidimensional Poverty Index, which focuses on thirteen poverty indicators in developing countries. Use these indicators as the starting point for your survey efforts.
Among the above suggestions, there is bound to be something every business across any industry can do. It need not be a complete overhaul, but even small adjustments go far. Imagine if every company in the world made a 1% improvement in the way they source—this collectively could make a greater dent in global poverty than the largest aid organizations!
Commit today to a tiny change. Collectively, we can create a “rising tide that lifts all boats.”
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