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Getting Smart About Donating to Haiti

We’re now almost two weeks into the devastation of Haiti. Did we apply lessons learned from past disasters in China, Indonesia, and New Orleans?

Well, only time will tell for sure.

But we’ve already seen immediate involvement from the public and corporations alike.  According to the U.S. Chamber of Commerce, 44 companies—including GE, Microsoft, and Coca-Cola—have pledged $1 million or more a piece as of this past weekend.  That number is likely to grow.

Of course, what excites me most is the sophistication with which the public is viewing Haiti support efforts.  We’re not just rushing to donate as much as we can; we’re really starting to think critically and subtly about our own as well as corporate involvement.

How to give. Our first instinct is to donate money, and our second instinct is to donate goods such as blankets, clothing, food.  But in cases like these, donating materials can cause a logistical nightmare, and it could be weeks before they reach those who need help most.  Money will go furthest, but there’s still room for donated supplies.  Drug maker Abbott Laboratories has pledged to provide $1 million in humanitarian aid, including donations of medicines and nutritional products.

Matching. I recently read some criticism of Overstock.com for the way they’ve responded to the Haiti crisis.  They prompt buyers to add a $1 donation to Haiti at the end of a purchase transaction, but Overstock.com itself is not donating any money nor are they matching donations.  It’s a prime example of a company cashing in on public sympathy for Haiti without actually taking an active role.  Many companies, like Tyson Foods, are matching employee donations up to a certain amount for Haiti relief efforts.

Transaction fees. Credit card companies and mobile carriers have come under attack for profiting from online and text donations made to Haiti.  Many of these corporations have since changed eliminated transactional fees for Haiti donations, but the public is still wary, and rightly so.  But then there are companies like T-Mobile and Verizon that have waived charges for  all calls to and from Haiti. Skype has sent $2 vouchers to all of its customers in Haiti, allowing them to make up to one hour’s worth of calls to the United States.

Donating and cashing in. The travel and hospitality industry has some great ideas about how to motivate customers to give. American Airlines now has a deal giving customers a one-time award of 250 bonus miles when you donate a minimum $50, or 500 bonus miles for a donation of $100 or more to the American Red Cross through the AA site. Similarly, Starwood Hotels is letting its customers transfer their Starpoints as a donation to the American Red Cross. 4,000 points = $50, 800 points = $100 donation, 12,000 points = $150 donation, 16,000 points = $200 donation.

A Rich Blend of People and Profit

There’s a reason Dean Cycon’s coffee-roasting company, Dean’s Beans, uses 100% fair-trade beans.  It’s not because it sounds good in the company tagline, or because it’s popular among the “ethical consumer”.  It’s because anything less than 100% would mean that some of the farmers he buys from get the chance to improve their lives and some of them don’t—and that just doesn’t seem right.

When you think in those terms, fair-trade has little to do with market price and standards, and everything to do with an ethical approach that guides your work.  But that’s just the kind of guy Dean is.  He operates not to move a product or improve brand perception, but to aid people in creating better lives.  His product is just a way to help him get there.

Check out our interview below. 

You can find coffee literally at every corner.  What makes Dean’s Beans special?

Dean’s Beans was founded on the principle that business can and should be a vehicle for positive social, environmental and economic change.  Every decision we make gets filtered through that ethical lens.

Since we have long term, respectful relationships with all of the farmers we buy from in fourteen countries, we know that they give us their best coffee in return.  That’s not just hype, that is what the farmers tell us and our independent cupping bears that out.

A consumer can be assured that everybody in the supply chain is being treated respectfully, fairly and being assisted to realize their life’s goals as well.  We do this through our People-Centered Development program, where we co-design with the farmers development projects that address their highest community priorities.

There are many companies that are into charity, but not necessarily social change.  How do you distinguish between them?

Charity is an important thing, but it is not about change, it is about maintenance and help.

Many smaller companies don’t have direct relations with the farmers, buying through brokers instead. So charitable giving to organizations like Coffee Kids (which I co-founded in 1988) or Grounds for Health is the only way for those companies to give something back.

But charity does not require the giver to change their own behavior, only to give when they feel moved to do so. In order to participate effectively in social change, we must look at our own part of the equation and realize that we are participating in a system that will keep coffee farmers poor and disempowered forever.  Social change requires us to change our behavior as well, to break the cycle of trade relationships that took advantage of or even created underdevelopment in those lands.

How have you seen socially responsible business evolve over the last 16 years?

Many businesses are trying to incorporate aspects of social responsibility into their operations. I applaud all of those efforts. At the same time I have to make two observations.

First, social responsibility is not just another product on the shelf, it is an ethical construct that should inform all of your behavior.  So it is really not enough to be “socially responsible” in your labor relations with your workers while you are a massive polluter. It can’t be compartmentalized if there is ever going to be real, lasting change.

Second, many companies use social responsibility as a marketing tool, with no serious commitment. Some companies spend massive amounts of money advertising their meager participation on fair trade or other socially responsible movements, but they have no company-wide commitment.

As a social movement, however, social responsibility is here to stay. It has evolved into an integral part of corporate thinking, and I have seen this all over the world through my work with FAO and the UN Global Compact. Now the fun begins as the battle between serious integration of the concept and manipulation for marketing purposes gets into full swing.  But that is always the tension in social movements.

Companies have to change their behavior, but consumers do as well, right?  Is it just a chicken and egg situation?

Change is like a wave on the shore. It starts somewhere out there and swells with momentum. We only see the end product.

Companies only change their behavior in response to momentum from the public. The most clever or responsible ones see the momentum sooner and take action out of sincere commitment or just to capture an emerging market.

So it really begins with society at large, not necessarily the particular company’s consumer.  How it all begins is a mystery, but where it goes from there is not.  I have heard so many companies say they respond to consumer demand, that’s when they will change their behavior. Yet at the same time these companies put out information that lulls the consumer into believing that the problem is being addressed, even though the change at the company level is cosmetic and the commitment meager.

So what are the benefits of this kind of serious integration?

If the companies truly integrate social responsibility into their decision making, the benefits are enormous.

First of all, our environment benefits, as an important aspect of social responsibility is care for the environment.  That benefits all of us, although it is so difficult to quantify the benefits for an individual (they are there!).

Second—and again, this is hard to quantify, but that to me is not the final judge of something’s worth—social responsibility can go a long way towards peace-building in the world.

Believe me, I have seen so many times the result of treating people in the developing world with respect. People who feel respected and hopeful that their lives and their children’s lives will be better are far less likely to blow themselves up or firebomb a church. I don’t take that lightly.

Micro-entrepreneurship? There’s An App For That

Micro-entrepreneurs generally face two main obstacles: getting funding and managing finances.  Micro-lending programs like Kiva have done a tremendous job of addressing that first challenge.  But what about that second one?

David Del Ser, founder of Frogtek, has it covered.  He’s providing the financial tools and skills to micro-entrepreneurs through the power of mobile.  Think about being a small business owner in the developing world and having all your sales technology literally at the palm of your hand: touchscreens, accounting software, barcode readers, interactive learning modules.  That means more data, smarter decisions, and better service—the start of a growing business.

Check out our interview below. 

What are you up to at Frogtek?

We are busy building the first business tool specifically designed to run on the mobile phones of micro-entrepreneurs. To be more concrete, we are focusing on the small mom & pops and their accounting and inventory management needs.

Is the smartphone then basically a substitute for the personal computer?

Exactly.  We believe the smartphone will become the main computing tool for the base of the pyramid (BOP), since it doesn’t have to compete with laptops or PCs as in the richer world.

Almost every adult has a cell phone at the BOP and from the drop in price of technological products, we can infer that in 3-5 years everyone at the BOP will have a smartphone.

Will they also buy a PC computer? Well, it will depend on what they can’t do on their smartphones, which is an interesting inversion to what happened in the US and Europe.

I think of the iPhone and all the app possibilities.  Even in the US we’re starting to realize the power of smartphones.

Of course now that the smartphones have powerful interfaces and an internet connection, here too we’re starting to see what novel applications they can foster.

The difference is that those apps still have to compete in most cases with their equivalents in laptops and desktops, as even while on the move you can always wait until you get home to write that long email. In the developing world, there won’t be any laptops necessarily, so you’ll write that email on your phone for sure!

So you’re giving people the technology tools, but I imagine there’s also a sizable gap in knowledge and skills.  How are you educating your customers about running a business?

We will have to educate them at two levels. First, they’ll need to learn how to use our tool. But to extract all its potential, they will also have to learn the business skills required to run efficiently a retail operation.

How will we do that? Even if we’ll use teachers and workshops in the early stages, our goal is to have a self-teaching tool. Using the multimedia capabilities of the phones, we plan on creating short how-to videos, interactive animations, audio testimonials and even simple games that modularize the knowledge and make it simple to digest.

The benefit of using the phone is double. On one hand, once you’ve built the content, its replication is free. On the other, the shopkeepers will take advantage of the idle time they have in their shops, instead of having to close them to go to a classroom and forgoing some income.

Did business school prepare you for the challenges of social entrepreneurship?

I’ve heard before that you can’t teach entrepreneurship, let alone its social sister. By that I take that the drive and desire to build a new organization can’t be taught and that’s one of the most important ingredients for a successful venture.

In my case, the two years at Columbia business school gave me the tools to analyze an opportunity, to understand the rudiments of how to capture it, and to devise ways to ensure its lasting social impact.

Furthermore, it provided an excellent testing ground to sharpen skills, which I took advantage of by launching Microlumbia, a student-run fund focused on investments and consulting for microfinance institutions. Going through that process while getting advice from professors and experts, as well as access to Columbia’s network of professionals, was an extremely valuable teaching experience.

And it made me want to continue down a similar path after graduation.