Translator: Mike Longley Reviewer: Denise RQ
A good social enterprise is a system or a structure
of different groups working together,
"all while dedicated to solving
the social, economic, and environmental problems
that have long plagued humankind
like hunger, homelessness, disease, and ignorance.
Let me tell you a little bit about my story.
From the time I was very young, I had an entrepreneurial passion.
I was always finding ways to make extra money, start part-time jobs,
find some concept that would get my juices flowing,
and it usually centered around business.
But I had a family structure
that was very much involved in ministry.
And so I was very conflicted,
almost as if I was the black sheep because business got me juiced up.
So when it came time for college, I made a decision.
I was going to take the high road.
I was going to attend seminary.
Great decision, except for the only problem was
my mind kept wandering back to the passion of business.
And I would get these part-time jobs.
I would get involved in more ventures.
And eventually, I realized
that my future was going to be in the world of business.
In the day, you had to make a decision.
So my decision to go into business
meant I was going to take all the training in seminary,
put it in a folder, put it back on a shelf,
and never turn around and look at it again.
By outside appearances, I was the picture of success.
I had surpassed all my wildest financial dreams.
But inside I was empty.
I was unhappy.
I weighed 420 pounds.
Everything inside was broken.
After a prolonged illness, at the age of 30,
the doctors told me I had six months to live.
And I'll never forget that day, sitting in the chair,
and realizing I had made the wrong decision.
I didn't know my wife and kids.
Something had gone wrong.
I'd taken the wrong path.
I kept looking back at that folder and thinking,
for as long as I have left,
somehow, I have to take this passion for business,
but I have to open up that folder.
I somehow have to connect my beliefs that I can change a world,
that I can actually make a difference in the world,
with my passion for business.
So that led us to a goal.
Remember, this is 20 years ago.
The word "social enterprise", "social business," didn't exist.
So we actually had to stop and say, "What does this mean?"
Well, we decided we were going to take
the passion and the energy of a for-profit business,
we were going to fold in the ideological core values
of a not-for-profit,
we were then going to take this and attach it to a product
that would actually add value to the customer,
because if you're not adding value,
you don't have a business to talk about.
And then we were going to use that to attach to the story
of a disadvantaged group or a chosen group;
in our case it was going to be agricultural farmers
in the poorest countries of the world.
So we created a company
by the name of Camano Island Coffee Roasters.
And people ask me all the time,
"Why did you start in the coffee business?"
Well, I absolutely love coffee.
(Laughter)
But that wasn't the reason.
Coffee is the second most traded commodity on earth, next to oil.
More money trades hands in this whole concept of coffee
than anything else, next to oil.
So we knew in that there was a solution.
And yet, the agricultural farmers that work so hard for this product
that you enjoy every day,
rarely get to share in the rewards or the profits of this product.
Somehow, we had to change that.
How are we going to create this new dimension for capitalism?
By the way, I am a capitalist.
I believe in capitalism.
But I believe there's a new definition.
How are we going to fold it in
and actually have this goal of fulfilling a human need?
Over these 18 years of Camano Island Coffee Roasters,
and lots of small wins, and big wins, and setbacks,
and failures, and all of that, we have come up to the conclusion
that there are four main groups in a social enterprise model.
I'm going to have an imaginary picture for you
because this is going to get a little complex,
and I want to make sure everyone follows with me.
I'll have a table here, just a dinner table.
We're going to call it the table of capitalism.
And I'm going to invite four guests to this dinner party.
The first guest is going to be my farmer.
We call it the "chosen group".
The second guest is going to be the not-for-profit.
The third guest is going to be the for-profit.
And the fourth guest is going to be the customer, or the consumer.
Now, that you know who my guests are,
let's kind of zero in on these people and find out what makes them tick.
Here's what I've learned over these 20 years:
what we do and who we are is two completely different things.
Everybody viewed me as a money-making machine,
somebody that could just get in business and go for it.
Making money, and making a profit, and growing a business is what I do.
It's not who I am.
With our farmers, farming is just what they do.
They're people with the same goals and desires that we have.
When I was given that six-month death sentence,
I had a chain of printing companies,
and I had to get out of dodge quickly.
I didn't have much time.
And so, how am I going to sell these businesses?
I was really inspired by the creators
of the employee stock ownership programs,
and as I dug into their model, I realized something.
In situations where the business owner gave the company to his employees,
they almost surely failed.
And yet, in the situations where the owners
taught the employees to think like owners,
to make the critical decisions of ownership,
not only did the companies do as well
they usually flourished and did better.
So when we started working with the farmers,
the first thing we said is, "Ownership is going to be the answer."
So we started with land ownership opportunities.
We actually signed deeds to our farmers.
Everyone's going, "Deeds? How are they going to pay for them?"
We're going to work with them on that.
But there's something significant that happens
when your skin's in the game,
when you actually have a stake in the ground.
So the first thing we did, because we do believe
in some other important things, like the environment,
is we said to the farmers,
"If you grow organic coffee, we'll pay you a premium.
If you grow coffee in the shade of the rainforest,
"don't remove the rainforest: premium.
And because we're capitalists, if you grow the top 1% arabica coffee,
produce excellence, we'll pay you a big premium.
With those premiums you can pay your land payments,
and you're going to have extra to take care of kids, healthcare systems,
clean water systems, and so forth."
What happened?
The first thing is they quit saying, "Thank you."
They got to work.
(Luaghter)
Ownership is pivotal
to this paradigm change in social enterprise.
All of a sudden, they're not thinking about dinner.
They're making long-term decisions.
The land is theirs; it's going to be their kids'.
The environment's important.
All of a sudden, things start falling into line.
Ownership is a very important part of sustainability.
The next group is our not-for-profit.
In the beginning, we partnered with organizations like Agros International,
some other really awesome not-for-profits
and did really great work in ownership arenas.
Guess what?
The thing the not-for-profits talk about all the time, sustainability,
rarely applies to their own business process.
They're in a donor model.
I call them the "gleaners".
They're constantly asking for donations.
And when the big donors disappear, they have to work harder.
Guess what's happening?
The donors are disappearing.
There's a paradigm shift.
And we knew in this opportunity we had to do something different.
We had to work with the not-for-profits to increase their influence.
We had to get them out of the fundraising mode
and into the work mode.
You know what? We know who the nonprofits are.
These are the people doing the good work.
These are the people whose feet are on the ground,
and they are actually changing the world.
Other partners need to come together and produce the fuel
to fuel that machine.
We can't make them produce the fuel and have the machine at the same time.
The third guest is our for-profit corporation.
What a misunderstood group.
(Laughter)
You know, we disrespect them for making a profit,
and then we come and want to take their profit.
(Laughter)
So, you know, making a profit is what a corporation does.
But there's people in that corporation
that want to make a difference in the world.
So the first thing we need to do
is tell them to put their checkbook away.
Because we see them for who they really are.
A for-profit corporation works for years
to create trust with their customers.
And in that circle of trust that they have with their customers,
they have an amazing wealth.
And so we go to the for-profit, and we ask them for their influence.
"Can you share the stories of our farmers and the great work
that the not-for-profits are doing?
And by the way, use it as your corporate social responsibility,
and as you share those stories your influence will increase.
We're not taking anything from you."
All of a sudden, the not-for-profits are gaining more exposure.
More money's coming in.
And the great thing about the old missionary model
of "tell people what to grow and do"
is it's not a "build it, and they will come,"
it's a "build it, and we're out there hustling to get them to come."
We're exposing the customers to more of the farmers' great work.
The fourth partner at the table is our customer or consumer.
That's really changing.
20, 30 years ago, we told people,
"Make money, and then write checks to charity."
The problem is the money's not falling from heaven like it used to.
And the stresses are through the roof.
We can't practice emotional extortion anymore
with our customers.
We have to tie, we have to connect
products that they purchase every day
to the good that they can do every day.
How in the world can our customer make their house payments,
take care of their kids, have two-career families,
go through all of this, and then lay their head on the pillow at night
and feel guilty about the plight of the world's poor?
There's just too much stress.
So we have to turn this around,
and through the products that they purchase every day,
we have to show them that there is a new world coming.
So we chose Camano Island Coffee Roasters in order to do that process.
These are our four guests.
It's now time for the entree at this dinner party.
We created a monthly club called "The Coffee Lovers Club".
And it was a subscription-based coffee program,
because we wanted to get the box in people's homes.
And all the box is is a carrier of a message.
As these people get the box,
they're going to find out a whole lot about this coffee.
They think they're buying coffee.
They don't really understand that they're connecting to a story.
With every shipment, a percentage of the money from this box
is going to go through the nonprofit and to the farmers
for direct product, as well as some extra help.
OK, first of all,
now the not-for-profit has some income coming in.
They can reinvest that income and do good.
They do know how to spend their money well.
They don't have to spend 80% of it fundraising, OK?
The farmer gets excited
because the more things they can come up with, they can sell.
So everything starts falling into place.
In this box, which we view as a story stick,
we get to start attaching stories.
And they're never sad stories.
We have no children starving.
They're esteeming stories
that tell you that the people you're buying coffee from
are forever changed because of your purchase.
I'd like to tell a really quick story here
about a woman that I met in one of the villages
seven years after she had tried to commit suicide.
And we brought her into the village, and her life had been transformed.
And to really make this story short,
during one of my personal crises in life, I was in Nicaragua,
and went into that village and met up with her.
And she, again, was reiterating the story of her life.
And she said, "Because of where I am today,
I know my children will never have to make the same decisions I made."
Sustainability equals hope.
Charity checks actually breed fear
because you've got to work harder for the next one.
It also creates a little bit of puppetry,
which we don't want to do.
The other thing is, if I tell you that millions of people
are starving to death, that's a big number,
a little overwhelming, and did you connect to it at all?
But when I start showing you people's lives, individual families' lives
who have been transformed through your purchase,
you're connecting to it.
So my box makes the message very sticky.
The unintended consequence of this box is we didn't even think
that our customers also had influence.
They have family, friends, and neighbors,
and they take our conversation cards and move them on.
And it's created quite a ripple effect
that wasn't even in our original plan.
The other thing is, not just the story stick,
not just the fact that it's making the invisible visible,
like, I am actually showing you people's families' lives,
what it's really doing
is connecting you to the products that you use every day.
You're not just buying a product, you're buying a process.
You're buying life, you're buying hope,
you're buying generational change,
and you're getting to enjoy your cup of coffee.
In this social enterprise cycle, it's really quite simple.
And as a matter of fact, these four players,
we let them create the cycle.
So guess who spoke first? The businessperson.
And they said, "We have power, we have influence,
and we have lots of followers.
What are you going to give us that we can offer our clients?"
"A free pound of coffee." "OK, great."
They get out there, they say,
"We'd love to give you a free pound of coffee and tell you a story.
If you're interested, stay on the program."
It's pretty simple.
By the way, we're now gathering customers at no upfront costs.
So what's happening?
Our profit margins are able to go to our farmers.
We're cutting out the middlemen.
Of course, as the for-profit corporation starts telling stories
of the farmers and the great work that the not-for-profit's doing,
people are jumping in and connecting.
Our customers are really starting to make a change.
Here we are.
Things have fallen into place.
It's 18 years later.
We now have 24,000 farmers
whose lives have been generationally changed.
(Applause)
Thank you.
The invisible is now visible.
But it's just beginning.
These farmers drive us crazy sometimes.
(Laughter)
So we've started micro-economic programs so they can get involved in more things.
They're now involved in tilapia fish, snow peas,
peppers, goats, and the list will go on and on.
Trust me, the list will go on.
But more importantly, capitalism has taken over,
and these people are in control of their own future.
Years ago, one of the true visionaries
in the social business world, Muhammad Yunus,
stated that "the only place we should see poverty is in a museum."
And we believe the social enterprise model takes a giant step in that direction.
First of all, the reminder of the table of capitalism
in a social enterprise model
is a reminder that we are all undeniably connected.
We'd need to quit having dinner parties
without the poorest in the world at the table.
They are a guest at the table of capitalism.
(Applause)
Thank you.
The other thing is that in a true social enterprise world,
we no longer have to wait for government to solve
the problems of homelessness, hunger, disease, ignorance.
We are the solution.
(Applause)
So in closing, I'm going to bring a fifth chair to this dinner party,
and that chair is reserved for you.
And I'm going to ask you,
"How are you going to make the invisible visible?
What is your role in the future of social enterprise?
Is it simply as a guest, a consumer, a customer?
Or is there another role that you can play?"
I invite you to be a part of this new paradigm.
Thank you.
(Applause)