Foreword by Paul Newman
In 1994, Paul Newman was awarded his
second Oscar. While a previous Academy Award had recognized his
performance as an actor, the second tribute acknowledged Newman's
real-life role as a leading and ingenious philanthropist. In 1982, he
founded Newman's Own, a food company that contributes 100 percent of its
after-tax profits to charity. In the fifteen years since its founding,
over $90 million has been donated by Newman's Own to charities around
the world.
These charities include not only the
seven international camps (the Hole in the Wall Gang Camp Association)
that provide therapeutic camping experiences to children with serious
and often life-threatening conditions but also hundreds of other
charities in the United States and abroad. It is the policy of Newman's
Own to donate the profits from its business to nonprofit organizations
operating within the countries from which the profits are derived -- a
policy that not only sells products but also encourages the further
development of the nonprofit sector.
In his life and philanthropy, Paul
Newman acknowledges the role of luck -- the generosity of it in his life
and the absence of it in the lives of many others. He is quick to voice
his respect for the hard work, ingenuity, and leadership that typify the
American business executive, but he also reflects on the luck of being
in the American business environment in which these talents can
flourish. It is an environment that in no small measure flows from the
extraordinary partnership between business and the more than six hundred
thousand organizations that make up the nonprofit sector.
(forward begins)
A decade and a half ago, my friend A.E.
Hotchner and I were both astounded and elated when we learned that
people were actually buying Newman's Own vinaigrette. We had every
reason to be surprised -- this wasn't a business that was the fruition
of an age-old dream or the product of some high-priced marketing study.
It started as a kind of a joke, but it ended up giving back in
satisfaction much more than we gave.
Our surprise over the success of our
business has been dwarfed by something else -- the discovery of what can
happen when a line of food products is mixed with a hefty dose of
creative marketing and then sprinkled on an assortment of social needs.
I am delighted that Newman's Own has
found a niche in one of the toughest industries around, the grocery
trade. I'm even more delighted that our products have generated over $90
million around the world. This business has taught me a lot of lessons
but none more important than demonstrating how, with a little effort and
imagination, commercial enterprise can have a powerful influence on
society.
Newman's Own gives away every nickel
that drops to the bottom line after taxes. I completely understand why
most other companies cannot replicate our unusual economic business
model. For publicly held corporations and most private enterprises, the
profit motive is essential. However, here's the problem: too many
businesses are at the opposite extreme of the generosity continuum.
Besides paying taxes, companies are
inclined to set aside little or nothing at all to address issues and
problems on the other side of the company property line. Giving money or
product to a nonprofit is too often seen as an erosion of shareholder
value. Contributing money has become, to many businesses, equivalent to
giving an edge to a competitor that keeps its purse strings tightly
knotted.
Along comes Corporate Social Investing.
This is a book worth reading because it establishes important rules of
the road for corporations. The ten-step plan described in the book
creates a common denominator for every business, no matter how big or
small. The standards seem reasonable and appropriate for any company in
any industry segment. The plan should go down easy, even for the most
profit-driven businessperson in the country.
This book reminds us that corporate
contributions when measured as a percent of profits have been on the
decline for along time. The concept of corporate social investing is the
tide-turner. If companies buy into the plan (and they should), corporate
social responsibility rises to a new level. Corporations have at their
disposal a management plan that will enrich their own businesses and at
the same time do a lot of good for people and places that need their
help.
It is important to keep in mind that
corporate social investing isn't just about how much cash and product
companies strategically place with nonprofit institutions. In the end,
it is also about leadership, social values, and the health and
well-being of an extra-ordinary phenomenon called the nonprofit sector.
From our great universities, cultural institutions, hospitals, and
research centers, to local environmental groups, library committees, and
homeless shelters, America (and increasingly other countries as well) is
a nation of innovative and high-quality alternatives. Keeping in mind
that the nonprofit sector has played no small part in sustaining one of
the most favorable business environments in history, corporate leaders
would do well to include its nurturing as an important strategic
business objective.
Whether a company sells cars,
airplanes, financial services -- or salad dressing, it makes good
business sense to preserve and enrich the nonprofit sector. Corporate
social investing gives corporations an opportunity to take one more step
in what is definitely a mutually beneficial direction.