Lesson: Double Bottom Line with Pamela Hawley

Step #2 Social Business: Leading with business principles

Greg Dees’ quote, "Entrepreneurs create value," is very special to me. It really simplifies and distills down the essence of an entrepreneur. Whether you're for profit, whether you're nonprofit, you are helping. Now "creates values," that sounds very much like a for-profit kind of language but you're really helping people and you're doing it in a strategic way and ideally in a way that scales. That value can be affecting one person's life but more likely it's the value that's scaling in affecting thousands of millions of people's lives. So I think that with value, how you define that, you have to look at the value of how you're transforming an individual, a community, a country.

I don't suggest that everyone who has a social venture company run it like a for-profit company. In fact I don't suggest that any of them run it like a for-profit company because for-profit companies, some of them are great, and some of them are not run well. What we do say, at least I encourage our team, is that we want to run with business principles because you're going to find great nonprofits, great companies, and bad nonprofits, and bad companies. So for me, it's to be effective, you do need to run with business principles but I don't want to judge. I look at it, there are lot of hearts out there. People are doing good work. I just know what works for me as a social entrepreneur.

Double and triple bottom line and even quadruple and quintuple bottom lines are happening all the time now and what they really do is they define that a company is not just about making money. We have that term in the financial world, the bottom line and the bottom line is the financial bottom line. That is not the only line that we've seen over this past decade and there are so many other lines that are so important that we measure, very, very important.

Now for example, the double bottom line could be that you are measuring sustainability and are your supply chains clean? Are the companies that you're working with, are they ethical? Do they preserve the earth or do they dump chemicals into the sea? That's the difference between looking at a positive versus a negative bottom line.

We have to be careful of that because right now in the stock market, companies are labeled as making money when they might be causing tremendous damage to our earth, so they're not really making money because someone has to go clean it up and usually it's the government or nonprofits. So what companies are being pushed more and we see this a lot with B corporations which rates companies along this line and they are a great group. You basically look at many different lines you measure that are equally if not more important and these are costs that are often not absorbed in.

There are HR Personnel bottom lines whereby you measure are people being used effectively, treated effectively that often leads to retention or good recruitment rates for companies. There is the sustainability bottom line where you're looking at what are the products you're creating and how much do they go back into the earth positively, how much it creates recycling or waste, and making sure you're whole supply chains are clean. There is another bottom line that has to do with just environmental stewards which is what are you doing as far as dumping chemicals or taking care of waste or recycling bars?

I know even Clif Bar has a situation where they have special ways to recycle the bars and everything in their factory is sustainable, the wrappers on the bars, everything, and they watch all of that. So you can actually define your own lines, which I think is great. So there's all these different kinds of lines.

To me, two of the most important that I really appreciate really are about people and about the earth. I like the word “development” so much more than “fundraising” because what you are doing is you are developing relationships long term, very similar to philanthropy. Fundraising and development is not about a one shot deal. I don't care whether you are the next Twitter or whether you're a small nonprofit trying to fund raise, always valuing the person above the money is absolutely imperative.

First of all think if you were in that position, you wouldn't want to be valued for your money first. No one does. But the second is that when you look at really successful relationships, they're always long term and they're always the best interest in heart. When I get involved in development, and when I am making an ask of someone, I really wait to cultivate that relationship with them and then second, I always make other requests that don't have to deal with money. Maybe they have some expertise in marketing, maybe they would like us to source some nonprofits for their children to give part of their allowance to.

You go that extra mile to serve them holistically. It's not just about getting money. It's about how else can you help them give of themselves, maybe they have ideas to give you. Treat people holistically so when you look at development as fundraising money, you really have to look about you're development of your relationships as a whole and treating people as that whole just as you would want to be treated.

NGO is a great term. It's non-governmental organization, which means it's not a part of the government and usually we use that term for nonprofits that are all over the world. In the U.S. we use the term nonprofits. Non-profits are a 501(c)(3) that means that when you give to them, you get a tax deduction. NOGs are international nonprofits and they are not associated with the government and you may or might not be able to get a tax write-off. It depends on whether they have the equivalency of a 501(c)(3) status, similar to our tax structure. It depends on whether you're giving from that country yourself or from here. So there's complexities in that way as far as getting a tax write-off but NGOs and nonprofits are the same sense in that they are here to serve the world.