There’s a market at the bottom of the economic pyramid valued at $5 trillion dollars.  But the real allure of this market, at least for me, is the opportunity to help its 4 billion people access healthcare, educational and basic living services.  How can businesses access this market and how can they do it without exploiting the market’s individuals?

This question led me to Unmesh Brahme who focuses on how companies can become involved in base of the pyramid (BoP) business as a way to alleviate poverty. But what really sold me on Unmesh as an interviewee for Cause Capitalism is his combined experience in international corporate social responsibility and cause marketing (he set up Ogilvy & Mather’s and HSBC’s sustainability programs in India) and emerging economies through work with Oxfam and the World Bank.

Unmesh gave a fantastic interview, sharing a cause marketing campaign he led that took place on farms rather than supermarket shelves, offering up entry points to the BoP market for businesses and speaking about his shifting perspective on sustainability, CSR and management education. It’s absolutely worth a listen.  Right-click and download for the MP3 or click the player below.

Download audio file (Cause-Capitalism_Unmesh-Brahme.mp3)

I’ve highlighted specific points below, which I hope will draw you into the larger conversation.

• Unmesh led an interesting campaign with Castrol in India. By asking Castrol, What’s your brand problem? he realized that they lacked brand saliency with farmers during draught times (Castrol sold motor oil for farm machinery). Instead of investing in TV, print or radio advertising, Castrol used its marketing budget to help farmers conserve rainwater.  The outcome was increased brand awareness and preference among rural communities and increased water supplies.
• Until recently, Unmesh thought that the true mark of a sustainability company would be its elimination of a CSR department.  Conversely, he now he sees the need for an executive level CSR/sustainability function (on par with a CFO) to advocate and influence social responsibility, particularly when it may conflict with short-term profit.  In one word, this role might be described as a ‘challenger.’
• CSR should be removed from corporate communication or community affairs to be more operational, to influence internal decisions rather than external perception.
• Companies looking to engage BoP markets need to understand the purchasing power of these markets and align their services with local income levels.
• Critically, if companies see BoP populations as only a market to sell to, they’ll likely exploit it.  They should first look closely at local social and environmental needs and then develop relevant products (affordable housing vs. televisions, for example).
• Unmesh suggests answering these questions as you consider creating a BoP business or product:
  • Can consumers pay for your product/service over a sustainable period of time?
  • Is a community-based ownership model a viable solution?
  • How has the community approached the relevant issue (electricity and water supply, housing, healthcare, etc.) over time?
  • What’s the community’s level of social/environmental acumen?
  • How can local NGOs and the government support and contribute?

If you like this interview you can thank Unmesh on Twitter like this.

About Unmesh Brahme
Unmesh is the founder of U:Reciprocal Sustainability Group and the co-founder of Climate Civics Institute, an initiative he developed as a Yale World Fellow.  He set up HSBC’s microfinance and climate portfolio in India as senior vice president of corporate sustainability.  Before that, Unmesh ran Ogilvy & Mather’s CSR program, where he worked with USAID, Unilever and Castrol.  You can follow Unmesh on Twitter at @UnmeshB and read his blog.

BoP figures taken from World Resource Institute.

Microsoft has something up its sleeve.

A roiling, innovative and effective CSR strategy, which, even among CSR wonks, has gone largely unnoticed.

Over the past weeks I’ve had the opportunity to speak with several executives in Redmond, Washington, and Buenos Aires, Argentina, helping to shape Microsoft’s corporate citizenship strategy.  Admittedly, I went into these conversations expecting an exchange drenched in PR-ese and trumped up sound bites. Instead, I got an inside look at how Microsoft uses technology and partnerships (with global NGOs, governments, vendors and employees) to drive social change that left me impressed and eager to share some of Microsoft’s techniques.

When I spoke with Dan Bross, Senior Director of Corporate Citizenship, I had two immediate questions:

1) Why hasn’t Microsoft been more vocal about its citizenship programs (from skills training for unemployed Americans to mobile banking in Africa to public cellphone booths in Haiti)? And,

2) What can other companies learn from Dan’s experience building Microsoft’s corporate citizenship program?

Microsoft formalized its corporate citizenship initiative in 2003. Over the past seven years Dan says, “We have chosen to use resources to develop and improve programs, rather than talking about them.”  Fair enough. It’s a sound strategy to build the community clinic before cutting the ribbon. Based on my conversations and recent media, it seems it’s ribbon-cutting time as Microsoft looks to raise awareness for its programs and serve as a guide for other companies.

So what can you and I learn from Dan’s experience forming Microsoft’s corporate citizenship strategy?

• Understand your company’s values, mission, products and services.
  “Very clearly and early on, we determined that we could make the biggest difference in addressing societal challenges in the areas of skills training, workforce development and education,” says Dan.
• Tap appropriate internal stakeholders to co-create the program.
  Since Microsoft’s efforts would focus on skills training, workforce development and education, Dan reached out to colleagues in community affairs and the education and partner groups (which oversee skills training and work with Microsoft’s 700,000 global business partners, respectively) to provide feedback and insight from their work.
• Look at opportunities and challenges to determine what to prioritize then develop a timeline.
  Dan and his colleagues developed an annual, two-year and four-year execution plan.
• Focus on the outcomes.
  Take workforce development. Dan says it’s easy to count the number of people trained or number of downloads of Microsoft’s curriculum under its Elevate America program, “But what those metrics don’t tell us is the outcome associated with the training that someone may take. Did he or she get a job? Was it a better job? How long did he or she keep the job? Did it pay better than the previous job? We need to understand these outcomes so we can improve the program.”  Measurement is tough. Even Microsoft, a company that has a combustible level of combined IQ and resources is partnering with the academic community to look for more effective ways to measure outcomes.
• Develop citizenship/CSR heads in each office (if applicable).
  Microsoft has citizenship leads in each of its 110 subsidiaries. Based on Microsoft’s global priorities, these leads develop programs that meet the needs of their local communities. Jorge Vega Iracelay, who directs Microsoft’s citizenship initiatives in Argentina, prioritized job creation through skills training and access to computers. Jorge and his team are working with the national governments, more than 100 NGOs and over 300 suppliers to meet their goal of creating 45,000 employment opportunities and bridging the digital divide by bringing computer access to 38 million Argentineans by 2015. Dan says this approach allows for flexibility; headquarters provides the strategic guidelines, but there’s room for each subsidiary to approach local issues uniquely.

Across functions and regions, Dan was able to thread together a comprehensive corporate citizenship program that guides initiatives in 110 countries and touches 85,000 employees. When you look at the breadth of programs that Microsoft has, of which I’ve just named a few, you realize how impressive this task was. Still, Dan admits it wasn’t without its missteps.

“We did not fully appreciate the interest our employees had in this work [when we formed the program] in 2003.  And quite honestly, we did not fully communicate [our citizenship initiatives] as aggressively or as thoroughly as we should have.  Over the past seven years we have devoted increasingly more resources to share how our citizenship work joins with our business goals and objectives.  Now, we regularly hear from employees who aren’t shy about sharing how they think we can be doing a better job with our citizenship efforts.”

The offer:

As part of a publicity push for its carbon-neutral ENVIRONMENT Papers line, Neenah Paper launched a sweepstakes to win an eco-trip for two to the Osa Peninsula in Costa Rica and a chance to ”go hard core and experience conservation in the heart of some of nature’s most fragile environments.”  The lucky winner is promised the “opportunity to help make the world a better place.”  Just your contact details are required to enter.

Neenah is also awarding three $100 gift certificates to randomly chosen participants who take a five-question quiz “designed to test their environmental awareness.”

The glitch:

I can almost hear the light bulbs flicker as marketing conceived the contest. From some height, a trip to an eco-resort connotes care for the environment. The winner’s tour of Neenah’s joint reforestation project to preserve old-growth forests will underscore the company’s commitment to sustainability.  And bases will be covered with the purchase of carbon credits to offset trip emissions.

But the train derailed when Neenah’s marketing team split marketing from mission. Because the trip is a publicity ploy dressed in hemp, it has a lot of holes.

Some holes are more superficial; I don’t equate a resort stay to going “hard core” and there’s no explaination of what the “oppportunity to make the world a better place” means for the winner (a carbon-neutral jeep ride through the forest doesn’t cut it). While other holes indicate lack of an authentic commitment to environmental preservation.  Most notably, although the contest announcement and microsite are the perfect opportunity for Neenah to talk about its preservation work, there’s no mention beyond the project’s name and partners. I want to know how is Neenah helping preserve this area? What’s the project’s specific goal? How is Neenah evaluating and reporting success?

Finally, the quiz that’s “designed to test environmental awareness,” focuses only on the environmental qualities of Neenah’s ENVIRONMENT paper. That’s not environmental awareness, it’s product knowledge.

What I would do if I ran Neenah’s marketing team:

1. Offer more. Instead of paying for two random individuals to stay in a resort, I would offer a group of influencers–students–the chance to compete for the trip by creating awareness campaigns, fundraisers or school projects in support of conservation.  Once in Costa Rica (and downgraded to more rustic accommodations) the group of high school or college students would physically contribute to the project, observing firsthand the fragility of the endangered environment.
   ..
   The outcome would be an educated, mobilized and impacted group of individuals who’ve already demonstrated their environental compassion (and raised visibility for my company, Neenah) through their contest submissions.  And now, my company has a cohort of people who have been touched by the brand and have internalized the company mission. This cohort of brand evangelists and potential conservationists comes with a network of family, friends, fellow students and teachers–call it a customer base. (I never said it wasn’t marketing).
2. Undress it. (This is the point on transparency.)  I don’t cover marketing and publicity motives in false opportunities to help the world. It’s fine to hold a sweepstakes and offer an eco-trip, but it’s not a valid sustainability initiative. I would call the quiz what it is: questions about the environmental attributes of a new line of paper.  Now, not disguised as an environmental awareness quiz, it’s a great tool to promote the product’s sustainable qualities.
3. Be explicit. A top rule in cause-related marketing is to be explicit about the program.  I would communicate how Neenah is supporting conservation efforts (if with money, how much and for how long), what the company’s intended impact is, what it’s accomplished so far and how it’s measuring success.
4. Involve the nonprofit partner.  It’s a good move to include your nonprofit partner. It usually means there’s legitimate commitment to an issue. Plus, I can leverage a combined network to promote the program and potentially offload some of the planning and programmatic logistics.

And you? I’ve had fun conceptualizing this campaign, but what would you do differently?

In this 7-minute clip, Better World Books President and CEO David Murphy talks about the company’s fiduciary commitment to its nonprofit literacy partners and how it received funding, initially with an SBA loan and later through Good Capital, a social investment firm. Right-click and download for the MP3.

Download audio file (Cause-Capitalism_David-Murphy.mp3)

Distributing books Tanzania, 2006. (L to R) Michael Retzer, then-U.S. Ambassador to Tanzania; Pat Plonski, Executive Director of Books for Africa; David Murphy, President and CEO, Better World Books (Courtesy of Better World Books)

Better World Books has several rare characteristics. It’s a for-profit social venture with a true triple-bottom line. It gives stock options to its nonprofit literacy partners. And it’s received $4 million in equity investment in a round led by Good Capital.

Better World Books collects and sells used books online to fund literacy initiatives worldwide through its five nonprofit partners, Books for Africa, Room to Read, Worldfund, the National Center for Family Literacy, and Invisible Children. Books are shipped carbon neutral with offsets from Carbonfund.org, and those that don’t sell are kept out of landfills through a certified recycling program. Today, Better World Books collects tens of thousands of books per day, given to the company by college students, libraries and other individuals.

The company promises 8-10% of its revenues, not profits, to its literacy partners. President and CEO David Murphy explains that Better World Books makes a fiduciary commitment to its partners so that when a book sells “it’s a liability on our balance sheet, regardless of whether we make money or we don’t.”  Beyond this, which is the basis of Better World Books’ mission and its origin, the company wanted its partners to be able to share in its success.  So with Good Capital’s encouragement and guidance, Better World Books created a mechanism to give stock options and a board seat to its literacy partners, turning them into shareholders and giving them a voice in the company.  David and co-founders Xavier Helgesen and Christoper Fuchs diluted their own options to creat the pool.

Each year the five organizations are evaluated on how well they met their objectives and supported Better World Books; they receive additional grants for high performance, which they can use without restriction.

By turning its nonprofit partners (which many companies would think of as just charitable beneficiaries) into shareholders, Better World Books ensured that its social mission brought an economic value to the business, which would preserve the mission in the case of a buyout. Kevin Jones of Good Capital who helped structure the deal calls it “mission insurance.”

At the time of this post, Better World Books has diverted 33, 951,415 books from landfills and raised $8,446,480.37 for literacy and education by selling used books.  And it’s profitable, earning more than $48 million in revenue and growing at 30%.

If you like this interview you should thank David on Twitter like this. You can follow Better World Books at @BWBooks.

As a sign of their technological and business prowess, iTeleport employees volunteer one day every week with the Khan Academy, a non-profit working to provide top-level education for free to anyone with access to a computer.

It’s not a marketing or publicity ploy and it’s not a recruitment tool (directly, at least).  iTeleport founder Jahanzeb Sherwani explains that it’s bravado.  By giving up a day of work, he and his employees make a statement to themselves and to their competitors (market stalwarts GoToMyPC and LogMeIn) about just how good their operation is. Of course, they also benefit from the creativity and inspiration that comes from working on diverse projects.

While an important outcome of volunteering for Jahanzeb and his employees is self-esteem, it’s clear that he’s also working within a larger framework. iTeleport’s three values are technology, self-growth and “hackers with a heart.”

Jahanzeb’s story captivated me because it’s honest and refreshing. In a market where companies are structuring and publicizing large-scale EVPs (which I think, unequivocally, is great), it’s memory-catching to see that businesses and employees can have different relationships to volunteering and modes of exercising a social mission.