The Gift of Giving

The Gift of GivingA business executive knows that every transaction which his or her enterprise makes must be directly or indirectly profitable. An expenditure of time, labor, and/or money which is not recompensed with at least equal value- money, or goods and services which will allow money to be made- is a foolish move. This is how businesses work.

Humans don’t work in the same way- we don’t coldly calculate the profitability of every action (many, yes, but not all). At times we do things simply for pleasure, and in many instances we help others with no mind for personal gain; however in reality neither of these types of actions is as anti-economic as it may seem. Our pleasure- of which there are many different types- may be regarded as our profits, and “giving” has the potential to be a very rewarding action.

Giving is that action which doesn’t fit into the quid pro quo model of thinking; however, even though when we give we don’t expect to gain anything in return, we often do receive benefits which are not easily quantifiable. The act of giving in itself can be a very rewarding experience, often referred to as the “gift of giving.”  It rewards us with that elusive currency of pleasure which no economic system is capable of evaluating. The joy which we can provide to others through an act or a material present is often well-worth the time, labor, or money which it costs us. We might not be able to economically verify this fact, but all human beings surely know it.

Beyond the immediate joy, giving also has more long-term effects. Giving creates stronger bonds between us and others, bonds which in the future may or may not produce fruit because, just as we are willing to give to others, others are willing to do the same for us. Furthermore, when our gifts go beyond simple one-time presents to long-term services which effectively strengthen those around us, we create an environment in which all, including ourselves, can flourish. This is the secret of prospering in a community- the good of others is also the good of oneself.

This is not a revolutionary idea- people with strong families, in well-off communities, with supportive friends, are more likely to succeed- and associations of people often follow the same principles. A basketball team wants to win its conference, but it also realizes that the strength of its conference is its fortune. A town may be happy to be economically superior to surrounding communities, but it knows that extreme poverty for its neighbors would sooner or later spell disaster for itself.  This reality means that the basketball team could find itself cheering on its archrivals against a non-conference team and that a town might offer services which are available to residents of neighboring towns as well. Do profit-oriented businesses follow the same rules?

The Boston Language Institute finds that giving can be a positive venture for all involved. The Institute offers free language classes to foreigners. Supervised trainees teach the classes for free, thus gaining valuable teaching experience which will help them construct a career while the foreigners learn English- without any monetary exchange. The classes are also a service to the community-at-large:  The improved communication skills of the students will be a boon not only for themselves but also for the people with whom they interact at work, at the supermarket, in their apartment building, and anywhere else. A stronger, more functional community can only be a good thing for businesses, which need clients who have the resources- money and time- to purchase goods or services from them. Businesses in Boston owe much of their success to the community itself. In the end The Boston Language Institute reaps the rewards from the seeds of giving which it sows.

The power of giving for businesses might be a hard argument to buy because it is not easily quantifiable, but truly smart businesses in the 21st Century will start to act a little more like humans, who realize that not each and every action can be repaid instantly and equally.

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Conscious Capitalism

Upon waking up from cryogenic freezing in the 1990s and discovering that the Cold War is over, the groovy title character of Austin Powers: International Man of Mystery exclaims “Finally those capitalistic pigs will pay for their crimes, eh?” before learning that capitalism has “won.” 20th century capitalism did in fact win an important showdown with communism and has been economically and politically dominant in the world ever since, but in today’s climate of financial uncertainty it is not so clear that it won the decisive battle.

To call our present economic system capitalism is just part of the story- the denomination more precisely refers to a parentage of economic systems which has gone through many reincarnations throughout the centuries. Significant changes in technology, infrastructure, politics, and culture have caused it to evolve from agrarian capitalism mixed with feudalism to Mercantilism, Industrial Capitalism, and Financial Capitalism, among other variants. Many business leaders and intellectuals believe that we are on the verge of a new tipping point in economics which will require a shift in our current variant of capitalism.

Conscious Capitalism is an ideology which promises to capture the essence of the new world order. A growing movement supported by eminent business leaders such as John Mackey of Whole Foods Market, Kip Tindell of The Container Store, and Doug Rauch of Trader Joe’s along with leading academics and intellectuals, Conscious Capitalism is “a philosophy based on the belief that a more complex form of capitalism is emerging that holds the potential for enhancing corporate performance while simultaneously continuing to advance the quality of life for billions of people. ” The underlying philosophy of the movement is that a successful business creates value not only for its owners and/or investors but for all people who in some way interact with the corporation.

Conscious Capitalism may sound a lot like Corporate Social Responsibility (CSR), which recognizes that beyond investors and clients, corporations have many different stakeholders– the employees, suppliers, community, environment that can in some way be affected by its actions- and assigns to corporations the responsibility to positively affect all of these stakeholders. But whereas CSR is a response to external pressures based on the idea that corporations grow rich at the expense of many others and therefore have an obligation to act in socially responsible way, Conscious Capitalism is an internal movement aimed at increasing competitiveness of corporations in the changing world. And it works: A study by David Wolfe, Rajendra Sisodia and Jagdish Sheth shows that companies oriented towards the creation of value for all of their stakeholders have had exceptional short and long-term market returns. Conscious Capitalism is not a pre-emptive move to avoid increased government control of large corporations, nor is it a publicity strategy to inflate a “do-good” image of corporations. It is simply good business.

The Conscious Capitalist corporation paradoxically achieves good profits by not having profits as its end goal; rather it sees profits as a means to achieving some other purpose- its Business Mission. The ideology of Conscious Capitalism elicits a final reflection- perhaps businesses don’t exist in order to make profits but rather profits are made so that businesses might exist. If Austin Powers were frozen for another 20 years he would probably wake up to find that the “capitalistic pigs” familiar to him are nowhere to be found. Of course only time will tell where the world is really headed, but smart- and successful- corporations are already on the path of Conscious Capitalism.

The Spirit of Giving

In order to thrive businesses must, of course, make a financial profit. However, the most successful businesses know that “profit” can be understood not merely in terms of financial gain but also in terms of general benefits to oneself and to the community. It is this broad definition of “profit” that people reference when they speak about a “profitable experience.”

When businesses give back to the community, they are truly creating a profitable experience for everyone involved. The community profits from the company’s support, and the company gains a respected position in the community, new business contacts, and an increase in employee morale and brand recognition. Quite often, these benefits also lead to increased financial profits for the organization.

Sometimes organizations are uniquely positioned to help in their community. In recent years, corporate philanthropy has moved beyond simply making financial contributions to charity. A recent ABC News story highlighted Google’s newest venture, Google Ideas, which puts its best and brightest minds in the service of increasing access to technology across the world. However, you don’t have to be a multi-billion dollar company to be an asset to your community. Even small businesses have products and skills that can aid food banks, social outreach programs, local governments, and educational initiatives.

Widening the understanding of “the spirit of giving” beyond just financial contributions can also help companies create unique, morale-building experiences for their employees. Giving employees and management a fully paid day to volunteer together to build a house for Habitat for Humanity can produce an infinitely more rewarding experience than the typical corporate retreat.

The presence of company representatives within the community also puts a human face on the organization, and a company’s charitable work can become an important part of brand awareness and messaging. Businesses often highlight charitable work in advertising and on their website. When employees are volunteering as part of a company initiative, they often wear logoed attire that indicates their affiliation. Consumers not only have an increased awareness of the corporate brand; they also build positive associations with it.

Additionally, employees can directly benefit from the volunteering experience by accruing new skill sets, which can make them more valuable members of their company and give them a permanent career advantage. A 2011 LinkedIn survey found that 41% of employers gave volunteer work equal consideration with paid work when evaluating the experiences of job candidates.

Finally, participating actively in helping the community provides a valuable forum for corporate networking. Many non-profits rely on services and financial contributions from a diversity of businesses. Working with these non-profits can help businesses forge valuable connections with other companies and begin the work of building consumer associations between brands. Collaborating in the service of a charitable cause can be the forerunner of more formal cooperative ventures.

In short, giving back to the community is a win-win proposition for everyone involved: the community gains from the services, products, or funds made available; employees enjoy increased morale and gain valuable skills; and companies profit from networking opportunities and increased brand recognition. Broadening the understanding of corporate philanthropy from a sole focus on financial contributions to a broader vision of community involvement can increase all of these benefits.