Gift Hub

The Chronicle on Boverton Beaver's Bakery

As a reporter for The Chronicle of Philanthropy's Give and Take, you are sitting, knees crossed, and back straight, in a public relations event promoting a Double Bottom Line Social Venture Bakery in Detroit. From the window you can glimpse a prison looming like a fortress.  The meeting is run by a Harvard MBA employed by Beaverton Social Venture Foundation funded with money from a Wall Street Wizard,  Boverton Beaver, who made his billions buying and selling weapons manufacturing companies, including one that specializes in anti-personnel land-mines made to look like children's toys.  He also served as Assistant Secretary of the Navy, and as a lobbyist for a defense contractor. He was indicted for fraud, but found innocent via a hung jury after a prolonged trial costing millions to litigate.  He is best known for his trophy wife, a former Ms. Nude Miami Beach, now on the Board of a Conservative Think Tank, and for his contribution to the theory and practice of social venture philanthropy.

The bakery employs ex-cons and teaches them the skills needed to get a job: sweeping up, slicing bread, stoking the coal oven, running a cash register, and waiting on tables in the bakery's cafe.  The artisanal breads are sold to wealthy friends of the funder. The loaves come with a picture on the wrapper of an ex-con smiling ingratiatingly and holding out a loaf of white bread in his black hand.  The MBA is going over what she is calling "the balanced scorecard," showing how many ex-cons get jobs, what the bakery costs, what it earns, how much profit is makes, how much money it saves in social services.  She is working her way towards the line called, "Total Net Social Return on Investment," some staggeringly large number, supported by 200 pages of spreadsheets and several metaphors.  The cash on cash bottom-line shows that Boverton's Foundation is making 8% ("a Program Related Investment" as the MBA explains.) The Mayor who is active promoting "three strikes and you are out" legislation, and who owns a significant interest in the local for-profit prison business is next on the agenda, to give an award to his friend, and political funder, Boverton Beaver, for service to the community.

An ungainly Stranger, in a white leisure suit, neck open to the waist, bell-bottoms swinging, rises from the back of the room to say, "You know, my Fellow Friends of Philanthropy, I notice that all the ex-cons with brooms and other signs of servitude are  black or brown.  Talking to a few it was mostly crack that put them behind bars, and petty crimes.  Yet, I notice that you, Boverton Beaver, have a daughter in rehab. I am glad for her that her needs are met, and crimes, if any mitigated.  And you, Mayor, wasn't your wife at that clinic in the Hamptons?  Boverton, what is the double bottom line on those land-mines you manufactured, that now litter Afghanistan? How do you net money and mayhem? And those sweat-heart deals with your cronies in DC? What was the Social Return on that? Has anyone asked whether giving these penny-ante felons a crappy job after 20 years in the slammer, is tantamount to justice? Maybe we got the right bars and the wrong gaolers? Maybe we trade sides, Boverton, and you and our Mayor push those brooms? And the ex-cons make money, 8% cash on cash, on your back and they call it philanthropy?"

Of course the Stranger is hustled out by the Security Guards. "Don't tase me, Bro!," the Stranger exclaims, before he starts screaming.  As the door slams, the MBA swishes her fine mane of black hair and says, "Excuse me for the interruption. Where was I? O, yes, the balanced scorecard and our Social Return on Investment."

Suddenly, the Stranger, beaten, bloody, his white leisure suit torn, patches of it smoking, staggers back into the hall - "The scorecard? Balanced? Stacked, maybe, not balanced." Then the room goes black.  There are confused sounds of a crowd trampling on each other headed  for the Emergency Exits. When the lights come on, there you are, in the empty hall, wondering what you will write for the Chronicle. Something upbeat, something balanced, like that scorecard? Something noncommittal? Or a puff piece about Boverton Beaver? My suggestion is this: Ask your immediate supervisor for guidance. Keep your nose clean and your mouth shut. It is better to err on the side of caution, or like that Stranger, you might find yourself in small dark hole.  He will be lucky if they even let him out to push a broom some day in that bakery he defiled with speech so open in a world so closed. Remember, the most important thing in any piece about philanthropy is what you know damn well, and refrain from writing.   

The History of the Corporate Charter

KLD Blog:

One of the few certainties of history is that the great reforms of one era become the great causes for reform of a later era. General incorporation brought us problems few dreamt of.

As we address them, it is time to explore what a corporation’s public purpose should be. It is not too late to impose one.

When we perfect double bottom line book keeping it should be an easy matter to determine how much a corporation should pay in fines, restitution, and charge backs. We just have to demand a certain annualized return on the social bottom line and confiscate any assets needed to make up the difference. Of course, if the second bottom line is not measurable objectively then it is not a bottom line. That would get us into matters of public opinion. And public opinion is managed.

KLD on Corporate Social Responsibility

Welcome to KLD Blog

I am very pleased to introduce to you KLD Research and Analytics’ new Blog.  We will be posting news, commentary and updates on issues relevant to integrating environmental, social and governance data into investment decision making.

Thanks to Sean, himself an investment advisor,  for the pointer.  Seems that KLD is a serious organization that is willing to cut to the heart of the matter.  Should we beg companies to be good for the planet or force them? And how?

The Common Weal Under Construction in Dallas

Says here in the paper:

A new gated community slated for Dallas in what had been the Arboretum.  The Common Weal will offer vacation homes starting at $1.5 million. The developer, who recently sold a transnational chain of Entertainment Facilities, and is best known for her philanthropy, has pledged one percent of profit to serve soup on Sundays in Central Dallas.  One in every 100 homes will be donated to the Humane Society, so stray dogs can have a real home in which to raise their puppies.  A troupe of Gypsy Scholars will perform weekly in various masks to entertain the residents and add a touch of High Culture. 

Capitalism is not that bad, really.  Nice people doing good things.  I don't know why some people are always complaining. A few trees more or less is not going to make the world a better or worse place. Think of the homeless. They need that soup. Many stray dogs will be helped. Puppies deserve our love. Rather than looking for so-called root causes, maybe we should all give a little credit where credit is due.

Why The Rich Care About Inequality Up to A Point

Bill Gates via WSJ: Why the Rich Care About Inequality.  You could say that the article is at odds with the (alleged) creation by Microsoft of a backdoor into Windows for the National Security Administration. When none of us has privacy, including financial privacy, we are equal only as are prisoners who are montitored 24/7 by the unseen guards from behind smoked glass.  Hard to call markets free when the political authorities  can monitor the private conversations of all market players and then act upon that information in secret, preserved from public scrutiny by a rubic (figthing Terror) so all-emcompassing as to deny the right of citizens even to ask questions.  Yet, in reality, the Gates pieces does not contradit his practice:  The piece is all about maintaining social order, appeasing and co-opting dissent, that wealth might be preserved, not about freedom or equality.  Gates does much good, but the river of life as it wends its way from Eden is turbulent and muddy, with many a garbage bag, tree limb, and here and there, a floating body.  We should be glad that our betters, the wise and the good, are handling this for us.  I for one would like to see more cooperation between business and the state security apparatus. We're all in this together.

Why Evil Companies May Out-Perform

BeyondPhilanthropy reviews recent studies indicating that the most admired companies under-perform a portfolio of despised companies by, say, 3%.   Possible explanations:

• The market is efficient.  Investor disgust is priced into the stock. The more disgusting the company the higher the return it must pay to attract capital?
• Evil companies attract psychopathic CEOs. The sicker the puppy who runs a firm, the more money it generally makes?
• Companies that externalize their costs do better than companies that clean up after themselves. The greater the indirect costs shifted to the general public, the higher the profit?
• Evil companies are the natural allies of evil politicians. Together they collude to prosper at the expense of humankind?
• Evil companies are the snares set by Satan to tempt us with worldly gain?
• Evil companies are like the villains we love to hate, and hate to love. We like getting shafted?

Purity and Danger: Taboo Investments

In debating socially responsible investing with Lucy Bernholz, she has me at an unfair disadvantage; she knows what she is talking about, whereas I am just learning. What concerns me, all over America today, is our increasing retreat, each of us, into ideologically airtight communities. I have a friend here in Dallas who watches FOX news closely, in order to learn the talking points. He then writes strongly worded emails to colleagues and letters to the editors of what he calls "the liberal press," to set them straight. Recently he refused to visit Canada because he said, "I will not support a socialist economy with my money." As for his personal budget, he tries to spend it only Christian businesses. He has a dentist, doctor, roofer, yard guy, pool guy, all vetted for their Fundamentalist beliefs and practices. Business can make us more urbane, more cosmopolitan. It can help us overcome our doctrinal or tribal narrowness. It concerns me to see Lucy on a Jihad about social investing, when her conception of it is drawn from Jed Emerson and Calvert, rather than from, say, The Christian Coalition, or The Capital Research Center, who might very well develop their own "screens." Soon we will have doctrinal purity, cut along who knows how many tribal lines, with investment managers having to cater to the ideologues of who knows how many sects, each with their own sense of which companies are pure, and which impure. Purity and Danger is a good book too, as is Leviticus, with its many prohibitions. When intellectuals set themselves up as  priestesses, or priests, who will separate for us the clean from the unclean, I get nervous, because such conversations generally end with sacrifice, and I am often proposed (as in Lucy's recent post) as a good enough victim. 

Selfish Giving

Selfish Giving: Observations of a cause related marketer.

Blogging about the things I see, learn and do as the Director of Cause & Event Marketing at Boston Medical Center.

I like the site more than I expected I would, maybe because it is written from a nonprofit fundraiser's perspective, but "after such knowledge, what forgiveness?" For example,  Selfish Giving opines, re Starbucks successful resistance to unionizing:

Companies often question the bottom-line benefit of cause marketing, dismissing it as "branding" (i.e. nice but not necessary).  But just like any good marketing initiative, cause marketing helps a company make and save money.  Starbucks' solid reputation for corporate responsibility is one reason why baristas keep pouring for seven bucks an hour, consumers keep ordering three dollar lattes and union officials buy their coffee somewhere else.

So Starbucks is doing well by doing good selectively, and the barristas take it in the chops? The morals are many, I suppose, depending on where you stand.

Veneer(tm)

RTMark via UFOBreakfast:

The "transnational cowboy" days of venture capital are over. Today's cultural climate means increased attention to transparency, financial accountability, and public perception. However, these changes are met with increasingly fierce market competition. The contemporary consumer has more power than ever before. RTMARK's unique position allows us to aggregate capitalist tools and humanitarian ideologies in a process we call "Veneer™." Veneer™ is the utilization of pre-trend market indicators to fake corporate accountability, environmental protectionism, and social responsibility. RTMARK's assets, while valuable, are primarily a standing reserve of pre-trend market indicators.

What we need is a Veneer(tm) for social capital? How to monitor and monitize "citzenship"? Ask Abramoff?

Corporate Social Responsibility?

Corporations, conservative think tanks, and legislators push back against corporate social responsibility enforced by pension funds and other shareholder activists. As Candidia, our distingished Patron and Corporate Titan says, "Wealth Bondage will do whatever it pleases, Sweetie, if I have buy every think tank thinker and every politician from here to China. It is the Free Market, and if you don't like it, you can eat my pollution and die." What Candidia wants, Candidia gets. I have no problem with that, as long as she continues to fund Rooster Foundation which in turn is the proud sponsor of Gifthub. I would like to think I have some loyalty. Better to speak well of the devil than go hungry. Donor's intent is good enough for me. I would be a good citizen, but who has the time?