Tag Archives: business model solutions

photo-2

Creating Shared Value

When most people think of “social justice,” they think of grassroots non-profit organizations with big dreams and small budgets. These people want to change the world from the ground up and are fighting against “the man” to do it. Social justice is reserved for the altruistic who believe that their lives should be devoted to helping those less fortunate than themselves, expecting little or nothing in return.

My social sustice experience is extraordinarily different from anything described above, and is rarely associated with social justice or social entrepreneurship at all. And, although it is recently making headlines most people don’t even know that it exists, and even fewer know that it serves as the engine behind many organizations in today’s social sector.

I’m talking about “corporate social responsibility,” or “CSR,” for short. CSR involves large for-profit companies “giving back” by giving money in the form of grants, in-kind donation, or giving time through employee volunteer programs. Many of this country’s largest companies give away millions of dollars a year and thousands of hours of volunteer time to help non-profit organizations all over the globe solve pressing social issues. And notably, many of these large companies approach the social sector with a keen business eye, which helps organizations run more efficiently and successfully.

Through the Fellowship in Jewish Social Entrepreneurship, I work as an intern at Alcoa Foundation. You might not have heard of Alcoa, but it’s actually one of 125 largest companies the United States, and you’ve certainly come in contact with it. Alcoa mines most of the aluminum that we use every day. If you’ve ever been in a building made with aluminum, driven a car that has aluminum, flown in an airplane, or even had a drink from a can of soda, you’ve certainly come in contact Alcoa’s product. Alcoa Foundation is also one of the biggest corporate foundations in the world, with an endowment of over $530 million. In 2012, Alcoa Foundation donated over $25 million to NGOs around the globe. Alcoa’s 61,000 worldwide employees donated 800,000 hours of their own time volunteering in their communities.

The numbers are certainly impressive, and every day during my internship I come in contact with people and organizations that have been affected by the work of Alcoa Foundation. I have come to take great pride in the work that Alcoa does to promote volunteerism and community service, and see the company as a truly responsible citizen in the for profit space.

Of course, we have to ask why. Why do companies that exist for the purpose of making money and delivering to shareholders, just give it away? Over the course of my internship, this has been the question that plagues me every day. On the one hand – and this is where things get tricky – corporations participate in philanthropic and social efforts in order to maintain what we call a “social license to operate.” Customers will associate positively with brands that are publicly giving back to their communities. And these companies aren’t shy about their own giving back. At Alcoa, for example, the Foundation features prominently on the front page of the website, even though their CSR work is such a tiny portion of what the company does. Still, Alcoa wants anyone who comes to the website to instantly see that they “give back.” Consumer-facing companies (that is, companies who sell to the general public, unlike Alcoa which only sells to other companies), create television commercials and print ads that display their philanthropic efforts.

Every year, corporate foundations get their name into the social sphere by attending benefit dinners (and paying handsomely for them), complete with their logo in the ad book. Corporations understand that they have a poor reputation – especially after the recent recession – and they use philanthropy to bolster this reputation. This depiction of CSR is cynical, and grim. Sometimes, it makes me question what I do.

But there’s an upside, and this has been my greatest takeaway from my work at Alcoa Foundation. Even if there is a PR side to CSR (and there certainly is), at the end of the day, corporations give billions and billions of dollars to charity every single year. There are a number organizations I can think of (but cannot disclose) that would simply be unable to do the work they do without the help of Alcoa Foundation. Non-profit work on any level simply cannot exist without the support of donors, corporate or personal.

This is why I am extremely proud of the work that I do at Alcoa Foundation. My social justice work involves wearing a suit and tie and working on Park Avenue. My social justice works for “the man,” not against him. And although people question the altruism of the work I do, I undoubtably engage in tikkun olam, repairing the world, one organization, one project, one employee, one dollar at a time.