On Corporate Social Responsibility

What’s the most inspiring story of entrepreneurship that you’ve heard in 2006? For Guy Kawasaki, the answer does not involve two guys in a garage who sell their company to Google for $1.6 billion. No way… his answer is a woman who runs a soccer-ball factory in Kabul, Afghanistan.

Have been looking into my bookmark folders and rediscovering links…

The New York Times covers the rise of "philanthropreneurs" - the new breed of successful businessmen who turn to profit-driven philanthropy:

""More and more people are asking who else is going to finance doing good if government isn’t," said Alan Abramson, director of the nonprofit sector and philanthropy program at the Aspen Institute, a public policy think tank in Washington. “These guys have firsthand knowledge of the market’s power, and they’re asking themselves why they can’t make money and tackle some of the problems once addressed primarily by government at the same time.”

It sounds simple, but the idea of such hybrid philanthropy is upsetting long-held conventions. These new philanthropists view the current foundation model, built on the fortunes of earlier industrial titans like Carnegie and Rockefeller, as hidebound and often ineffective. They have an urge to change the world, and argue that in some cases only the speed of capitalism is fast enough."

 Not all are impressed by Philanthrophy 2.0:

 "“I come at this from at least a wonderment of what are the advantages the melded or hybrid model brings,” said Mark Rosenman, a professor at the Union Institute and University in Cincinnati and an expert on nonprofit matters. “Though I have no problem with philanthropy and socially responsible business being joined, I do have one with a for-profit enterprise being called philanthropy.”

“I see no clear reasons to begin to develop corporate structures that need to consider themselves more closely aligned with philanthropic purposes,” Mr. Rosenman added."

Thanks to the Nobel Committee’s recognition of Muhammad Yunus and the Grameen Bank, microfinancing is now getting the attention it deserves. The New Yorker profiles the various approaches to microfinance. As with many projects that start out well-intentioned, some microcredit institutions are reconsidering altruism in favour of profit-driven, commercially-sustainable models.

The debate is about much more than purity of motives. The Yunus faction worries about “mission drift,” saying that, as the drive for profitability increases, only the so-called “less poor” (as opposed to the very poor) will qualify for loans. “On the one side, there are the people saying, essentially, We want to be Citigroup for poor people,” said Jonathan Lewis, the C.E.O. of MicroCredit Enterprises, which provides loan guarantees from wealthy donors to institutions that serve mainly the poorest women. “But, on the other side, we’re saying, We didn’t start this to become a bank. We started this to end poverty. So we’re going to experiment with all the different ways, profitable or not, that we can work with our constituencies—who are our customers, not our shareholders. If your core mission is to provide a channel out of desperate poverty, it creates a different set of questions than if your mission is to create a global market in microfinance futures.”

Read the full article here.