If you caught my poll earlier this week asking what areas you find meaningful in the cosmos of business and social responsibility, you know that I’ve been thinking hard about how to make the biggest impact.  On one hand, there’s the CSR approach, which I’ll generalize as reaching more people but having less direct impact on the recipient individual or cause; on the other hand, there’s the direct aid approach, which (hopefully) improves an individual’s life more than a cause marketing campaign, but affects and influences fewer people.

In my worldview, social enterprise lies somewhere in between. But there’s a lot of ‘in between’ to suss out, understand and test.  Not only do we work with fickle terminology, there’s also a dearth of insight into what works in the long-term.

R. Todd Johnson’s excellent piece, “Is Philanthropy Killing Africa” opens up gaping questions. Do we prioritize immediate solutions (which, in international development means saving lives) or long-term self-reliance for Africans?  Johnson questions whether NGO efforts and buy-one-give-one products like shoes, flashlights and computers, are killing the African economy and entrepreneur. He ratchets up the complexity level by bringing tax- and donor -subsidized products (such as water pumps) into question. The negative result of this approach (which isn’t even a pure charity as it still requires an individual to purchase the pump) is “killing the market for future indigenous entrepreneurs attempting to sell water pumps at a profit and locking a potentially valuable distribution channel in a non-profit, making it difficult for other for-profits to use,” in his view.

Johnson’s depiction is Escher-like. It’s hard to grab a hold of one sure thing and follow it to a solution. But with four billion people living without basic services…and consumers and companies who want to engage (yes, that’s a jump, but I feel strongly that it’s true and part of the solution)…we have to try.

Image credit: Jake Lyell Photography

Yesterday I wrote about some of the ways that small startups with limited resources can create a social mission.  Today, I came across a tool that makes it easy for your company to try out a buy-one-give-one model called B1G1.

Traditionally, buy-one-give-one refers to like products. TOMS Shoes and Sunnight Solar are great examples. Every time you purchase a pair of shoes or a solar flashlight, an identical item is donated to an individual. B1G1 uses the term more liberally  to include any type of donation triggered by a purchase.

Here’s how it works. After signing up, your business can choose from more than 600 projects to support (clean water, sanitation, education, housing, etc.), which are searchable by region, organization or cause.  Decide how much your company will donate each time a (particular) product is purchased. At the end of the month, you tally up eligible products and B1G1 will process the donation for you. There are no transaction fees but there is a fee to use the software.

There’s been a recent crop of e-commerce philanthropy platforms recently that are marketed as plug-and-play philanthropy for retail sites (Benevity is another that iStock Photo is working with). Some are better than others, but as a whole, because they are set up as for-profit companies they charge business too much for the service in relation to the micro-donation amount they encourage from the business or consumer.

The upsides of B1G1:

• The concept is worthwhile. Portals that make it easy for a company to systematize giving is positive.
• Businesses can pretty easily use the platform to test out what engages their employees and consumers. If they are supporting several organizations and regions at once, B1G1 simplifies the accounting and funds distribution.
• 1,258,761 giving transactions have been made through March 2010.  The site measures donations through what they achieved, the number of children educated or meals provided, for example.  I’d like to see the total amount donated in addition to the impact of the donation.
• It can be an efficient tool, but can’t be your company’s only effort.  Twitter is a tool to help a company communicate, but it’s not its entire communication strategy.

The downsides of B1G1:

• It simplifies a social mission.  B1G1 or a similar platform should only be one tool in the toolbox.  There’s tremendous benefit from engaging with the communities or causes you’re supporting. In interviews and articles, I spend a lot of time talking about how to find and structure partnerships between your business and nonprofit organizations because the deeper these relationships are, the greater the benefit for the business, the nonprofit, consumers and the community.
• Your business is vetoing the option to get support from the nonprofit. B1G1 offers to write about your company as part of its service, but when you don’t engage directly with the nonprofit, you miss out on the publicity and customers they drive to your business.

• The system relies on the companies to report on how many products they sold that triggered a donation. There’s no accountability.
• It costs money.  $395 for small businesses with 15 or fewer employee and unspecified prices for larger businesses. While 400 bucks isn’t a lot to spend on a program, it’s disproportionate to the encouraged donation amount of 1 or 2 cents per product.
• It’s easy to overrepresent your do-gooding. This is the hardest point for me to articulate because it’s a perception I have rather than a direct figure I can point to.  B1G1 doesn’t push for real impact. The site seems marketed as a way for a business to check off an ethical obligation because a) it’s shown that customers like this, and b) as a business, you’ll like it too.  While I agree with these points, I take issue with the lack of information on the site. I can’t find a business listed that shares how much it’s donating per an action or purchase.  If you market your company as supporting others in need (even with something as innocent as a link on your website), you better follow through…with more than a couple of dollars per month.

It’s tempting to use a tool like this–particularly if you’re small and strapped for time and money–as a quick solution (even if you are giving substantial amounts). I encourage you to develop other partnerships and programs (either within your company or with your suppliers or consumers) in addition to using B1G1 or a similar platform.

AT&T’s commercial featuring TOMS Shoes was so publicly enjoyed that AT&T introduced a 60-second version of its 30-second spot. The commercial profiles TOMS Shoes–a for-profit company that donates one pair of shoes to a child in need for every pair purchased–and founder Blake Mycoskie who uses his AT&T Blackberry to conduct business from around the world (More bars in more places).

This was a genius branding move for AT&T, which garnered attention and customer goodwill simply by making a commercial about a do-gooding business. I’d even wager that AT&T acquired new customers by painting an aspirational picture of AT&T users as entrepreneurial and altruistic. For no more than the cost of a commercial, AT&T netted public acclaim, engaged customers and forked a bite of the corporate social responsibility-flavored pie.

So is this good or bad? Did AT&T pull off a cause marketing coup by setting a precedent for companies to claim credit for social or environmental stewardship without lightening their pockets or putting nail to hammer? Or did AT&T provide an indirect route to shoeing more children by introducing TOMS Shoes to a national, prime time audience?

From a business perspective, the impact is exceedinly positive for both AT&T, TOMS Shoes and TOMS’ beneficiaries, which is a key criterion on which cause marketing is judged. Could AT&T have done more? Always. Did the company put together a commercial that was handily self-serving. Yes, which is a principle role of business. I argue that in addition to profit, another role of business is social impact. To gauge just what impact the commercial had, I contacted TOMS.  Mycoskie shared that since the initial airing of the spot, TOMS has seen more awareness of its buy-one-give-one business model from an “incredibly diverse and extensive group of people.” There’s been increased consumer demand for the shoes which has encouraged stores “across the country to carry a larger variety of TOMS, helping to solidify TOMS ability to give 300,000 pairs of new shoes to children in need around the world.”

What’s not measured in the number of shoes bought (and therefore donated) since the commercial’s launch is the ripple effect of more companies adopting a buy-one-give-one model and an increased awareness among consumers that they can make a social impact by virtue of their product choices. Since its launch in 2006, TOMS Shoes has inspired other social enterprising businesses like LJ Urban, WeDrink Water Bottles and SunNight Solar. Buy-one-give-one is an appealing model to consumers and is gaining traction as a viable business model.

I did a quick Twitter search to glean real time reaction to the commercial. Overwhelmingly, the tweets were positive. I’ve included some below. What’s your take on AT&T’s commercial profiling of Blake Mycoskie and his One for One shoe business?

July 13-19 tweets

• TOMS are awesome. They come with AT&T service.
• If I were an impoverished youth, I’d prefer a shoe with support rather than those cheaply constructed trend-driven toms, at&t endorsed or not.
• I like AT&T more and more every time I see their #TOMS commercial with @BlakeMycoskie.
• TOMS at&t commercial! Ha. My first time ever seeing it. I want new toms =[
• i just saw a toms slash at&t commerical ..it made me think of you @xxxx// thanks! I own a billion pairs.

Recently, I had the opportunity to proselytize socially beneficial business models to a crowd of upstart entrepreneurs with varying levels of interest in social responsibility.

I spoke with upstart entrepreneurs about five ways they can incorporate cause into their business, regardless of its size. Although the methods range in their levels of commitment and implementation time, they all display action on the behalf of a cause.

1. BOGO: Buy-One-Give-One

   With a BOGO business (a company that donates an exact item match for every item sold) cause is at the core of the business model. BOGO businesses have dual objectives, to support and enhance their causes and to turn a profit (the latter, the distinguishing factor from a nonprofit).  Exemplary BOGO businesses are Nicholas Negroponte’s One Laptop Per Child, The BoGo Light by Sunnight Solar and TOMS Shoes.
   
   WHAT TOMS GIVES: Millions of pairs of shoes to children in need in South America and Africa.
   WHAT TOMS GETS: Recognition for pioneering the BOGO business model and a vocal following of die-hard fans.

2. Portion of Profits Donated

   The most common way companies engage in social responsibility. A company will pledge and donate a portion of proceeds to the community it serves.  In 1983, long before cause marketing was the term du jour, American Express ran a campaign to fund restoration of the Statue of Liberty. For every dollar spent on an Am Ex card, the company donated 1 cent toward restoration.

   WHAT THEY GAVE: $1.7 million toward Lady Liberty’s overhaul.
   WHAT THEY GOT: A 27% increase in card use and 47% growth in new card acquisitions.

3. Transparency and Call-to-Action

   Transparency is primarily effective when a company pledges to support a cause and publicly charts its progress. The one-two punch is the follow-up call-to-action, which motivates the customer to act on behalf of the same cause. Timberland cares about environmental stewardship and has for some time. But many customers to whom this might matter, were unaware. Only with the introduction of something called the Timberland Nutritional Label, however, did Timberland weld its cause to the consumer.  The Timberland Nutritional Label is affixed to the boxes of all 3 million pairs of footwear sold annually. It shows the buyer where the footwear was made, the amount of energy that went into making it and the amount of renewable energy Timberland uses.

   WHAT THEY GAVE: By calling itself out as a conscious company, Timberland held itself responsible in the public’s eye.
   WHAT THEY GOT: Sales grew 10% annually and stock prices doubled from 2006-2008.

4. Employee Volunteerism

   Paid time-off for employees to volunteer, either on a company-sponsored or individually chosen project. Imagine the culture of a corporation that truly values giving back, to the extent that it will trade temporary profit for employee satisfaction and loyalty and a tested public image of its commitment.
   
   WHAT THEY GAVE: One week of paid-time off and loss of productivity per employee.
   WHAT THEY GOT: Increased brand awareness and enthusiasm and employee satisfaction that translated to growth in sales.

5. Employee Incentives

   Inculcate your employees in your company’s mission not through processes, call scripts and company retreats, but through participation, collaboration and incentives. Burt’s Bees incentivizes employees and reinforces the company goal of environmental sustainability in several ways. Employees receive bonuses based in part on how well the company meets jointly established energy conservation goals, and plum parking spots are reserved for those that carpool or drive hybrids to work.

   WHAT THEY GAVE: Nothing really. No additional bonuses were given nor were extra parking spots created.
   WHAT THEY GOT: Employee buy-in, reduced energy costs, a strong culture of teamwork and conservation, brand authenticity as environmentally friendly.

Go Green Solar founder Deep Patel is a solar energy aficionado, social-good actor and reader of this blog.

Patel recently spoke about a plan he’s developing, which would bedeck the Hollywood sign with solar panels to capitalize on the sign’s solar energy real estate and drive energy back into Los Angeles’ grid-tie system. As I was talking with Patel afterward and learning just what a grid-tie is, he brandished an orange flashlight with a proud grin and announced his company as the lamp’s latest distributor. It was a BOGO Light from SunNight Solar. Patel had read my post on SunNight Solar’s Buy-One-Give-One (BOGO) business model, contacted its founder Mark Bent, and brokered a partnership to sell the solar-powered flashlights and under the Buy-One-Give-One sales model.

Here’s the shakeout: an active distribution channel for SunNight Solar, a dynamite product in Go Green Solar’s inventory, another individual with nighttime access to light, and a marvelous anecdote about the power of mission–and of blogging, for me.