Consumer Dollars Can Make Change
Written by Jan Jaben-Eilon Tuesday, June 05 2012
Aficionados of wine can now not only choose where to buy their reds and whites, but they can also vote on the charities to which those companies will share their profits. That’s the idea behind Atlanta-based Cultivate Wines whose goal is to make quality, delicious wine affordable to all, while at the same time supporting nonprofits that help others.
Cultivate Wines is using an increasingly popular corporate model that sets aside a percentage of its profits to give to nonprofit organizations, oftentimes encouraging customers to help choose which nonprofits to support. In the case of Cultivate Wines, visitors to its website can vote for one of some 30 charities after watching short videos on each. Recently the top vote getters were nonprofits that support films about Africans, advocating for orphans around the world and the homeless. Former winners include nonprofits that help children in Africa, Haiti and the United States.
Launching its “Give” program last year, Cultivate Wines is now giving $100,000 per quarter: $50,000 to the organization that received the most votes and $10,000 each to five runners-up. According to a spokeswoman, “We give 10 percent of our revenue to nonprofits that support education and basic human needs. Nonprofits apply on our website, we vet them, and then we put them up on the site for voting. Anyone can vote, and we do it by quarter. So each quarter, we put up the nonprofits for voting, people can vote once per day and at the end of the quarter, we give away the money to the winners.”
Cultivate Wines is one of many companies that are now based on “connected capitalism,” a belief that for-profit companies with a socially responsible mission have potential to change the world.
Mike Hannigan, president and co-founder of Give Something Back, California’s largest private office supply, compares the idea to Newman’s Own, the food company created by the late actor Paul Newman, which directs all its profits to charity. More than $330 million has been given to thousands of charities since 1982. In its first year in 1991, Give Something Back donated $500, but in its second year, it granted $2,000. Last year the company gave out $500,000.
Give Something Back’s model is somewhat different than Cultivate Wines. Employees and customers are allowed to vote for the nonprofits that will receive financial support from Give Something Back, and it does so on a regional basis. For instance, 15 percent of the company’s sales from the Sacramento regional office go to 501(c) nonprofits in the Sacramento community. Regional ballots listing the vetted community nonprofits are provided to the regional customers. Many of the recipients are grassroots organizations, Hannigan says. Local food banks have been popular; three years ago it was animal welfare.
As of the first of the year, a new California law became effective that will encourage other companies to move to a “connected capitalism” model, says Hannigan. The new legal category of “Benefit Corporation” allows companies to adopt policies “that create a material positive impact on society and the environment” as part of their legal charter. The new law provides corporate officers with a legal “safe haven” from being successfully sued by shareholders who argue that the company’s social policies diluted the value of their stock. Other states are adopting this new model, which replaces the traditional corporate mandate that says the interests of shareholders must take priority. Hannigan says the new law allows Give Something Back to go after outside capital while protecting the company’s social mission.
Both large and small companies are contributing some or part of their profits to nonprofits close-by and around the world. Atlanta’s neighborhood café, Souper Jenny, donates 10 percent of its profits to three area charities, which customers vote on by placing gold coins in one of three baskets to determine the percentage each organization receives.
Another company that is making a name for itself is C4 Belts – the latest “must-have” fashion accessory for millennials. Now available in more than 100 stores, this company allows consumers to not only customize their own environmentally friendly belt – from a selection of 20 different buckles and 20 different colored plastic belt straps – but they also to direct proceeds from each sale to one of four nonprofits. Beneficiaries currently include Boys & Girls Clubs, Human Rights Campaign, Project Kaisei or Kiva.
Since 1946, consumer giant Target has given five percent of its income to its communities. Today that equals more than $3 million a week. In the past year, Target has chosen three areas on which to focus: education, environmental sustainability and health and well-being.
Companies believe that it makes good marketing sense to contribute their profits to nonprofit organizations. Customers, they say, want to buy from companies that are aligned with their personal values.
Businesses and people all over are grasping onto the idea of "connected capitalism:"
The jewelry company Same Sky offers HIV-positive women in Rwanda the opporunity to provide for themselves and their families with the creation of beaded necklaces and bracelets.
One in three American mothers stuggles to provide diapers for her baby, so Huggies launched its national “Every Little Bottom Counts” to donate diapers to babies in need.
Emily-May Richards says enrolling in The Atlanta Women’s Foundation Women on Board Program proved to be beneficial for her community and her personal growth.
Jan Jaben-Eilon was a founding staff writer of the Atlanta Business Chronicle. Since then, she has been the international editor of Advertising Age magazine and has written for such publications as The New York Times, International Herald Tribune, Washington Journalism Review, and Consumer Reports. She is the author of soon-to-be-published (There is) Life After Cancer. Jan and her husband have homes in Atlanta and Jerusalem.
