YakShaving

Lately I’ve been falling into the “too much work to have time to post” trap, which is exactly I was scared about when I started this thing. Incidentally, this is the same reason that Bill Gates didn’t start a blog.
I’m going to make a conscientious effort moving forward to be a more frequent poster, don’t fret.

Ohhh let me preface this one with IANAP– I am not a philosopher.
There was an interesting article- Charity begins at Homo Sapiens, about the overwhelming generosity of human beings after the tsunami disaster that shook Southeast Asia early in 2005.

Altruism is a concept which has been discussed against the backdrop of social enterprise. It is becoming largely relevant as many non profit “charitable organizations” are attempting to transition into profit-seeking models. Altruism is loosely defined, but most agree that it means “serving others through placing their interests above one’s own”.

I remember I had an interesting discussion with my friend Sachin about the topic of altruism. He argued that everything humans do that we consider to be charitable in the traditional sense is actually selfish in nature. Giving to charity or painting a homeless shelter evokes a certain feeling of innate worth in a human being. As humans, we are constantly looking to maximize our utility (Mill/Bentham). In addition, performing an altruistic activity in turn breeds societal recognition. Altruism, then, serves little more than to fuel our egos. Additionally, any truly altruistic tendency we may have probably emerged out of learnings (or should I say teachings?)–religious/moral from our parents.

This is what led me to this article from HBSweek, Motivation and the Cross-Sector Alliance. It points out that alliances between NPOs and corporate counterparts can have multiple motives. The line between existing for the welfare of others and for one’s own benefit is getting blurred.
Michael Porter, in another article, points out that when social activities lack a strategic dimension, Milton Friedman’s well-known criticism that philanthropy has no place in business, suddenly seems to take on more credibility.

If you are a business with competitors continually trying to maintain or gain market share, you are not incented to be philanthropic. On the other hand, let’s say you’re a company that has much to gain from an altruistic cause– such as a fervent audience of consumers: Ben & Jerry’s Ice Cream created a campaign called Lick Global Warming, and in the past, “One Sweet Whirled”. Now that, to the environmentally aware, socially conscious consumer, is pure goodness– and a specific reason to buy Ben & Jerry’s ice cream. I used to buy B&J’s for the sole purpose of environmental support though their ice cream certainly has a price premium and there exists no discernible taste difference from other brands. For profit organizations can align themselves with consumers using emotional links to causes that have already been created- a far more powerful message than traditional B2C advertising could ever achieve, IMHO.
Sometimes, it has nothing to do with increasing market share- It has everything to do with mitigating the risk associated with being aligned negatively in the public/regulatory eye. The examples given in the HBSweek article are Shell Oil post-Greenpeace and Exxon post-Valdez.

my opinion: Traditional for-profit companies should align themselves only to strategic social causes when they believe it will improve their market share or build consumer rapport– and also, to test initiatives in new markets that are socially + economically profitable ventures (e.g. microfinance).