New Address!!!

Some readers have mentioned that I seem to have disappeared from the face of the Earth... but no, never fear! I just switched my blogging platform to typepad. If you're using a newsreader, please update your links. To check out the new site directly, here's my forwarding url: www.capitalism4good.com

See you there!!!

BIG NEWS: My blog is moving!!!

I've redesigned this blog, and am now hosting it on typepad instead. Here is the cool new url that will take you there:

www.capitalism4good.com

See you on the other site!

Two sides to every CSR story?

When I put together my news briefs, I like to think that I present a balanced view. Often, this means including articles that take opposing positions on a topic - but lately, I've started to wonder if this approach doesn't introduce a different sort of bias.

I was thinking about this as I cut-and-pasted a DiversityInc article about Wal-Mart being the recent target of the Largest Discrimination Case in History, and then added another article suggesting that the big-box retailer may be creating A Blueprint for Reviving Black-Owned Banks. One count against Wal-Mart's diversity policies, and one count in favor.

But is it truly balanced?

I remembered how Wal-Mart has a "war room" of PR professionals managing its reputation, and wondered if they had been calling every news outlet in the country, trying desperately to place a pro-diversity story in order to counter news of the lawsuit. It wouldn't have surprised me; anyone in their position might do the same thing.

Next I noticed another article in The Guardian blaming a recent UK ban on junk-food advertising for draining needed funding from children's television programing. I had covered news of the ban before, and wondered if this was somehow the junk food manufacturers' response to it. Or maybe it was just reflected a reporter who, like me, wanted to present a "balanced" view.

But are two sides to a story equally valid? And in this age of proliferating information, isn't it the job of the news media (and of columnists and bloggers) to help us filter the relevant from the irrelevant, and the better arguments from the less-tenable ones?

It's a tough tightrope to walk, and reminds me of a previous post self-critical post on how our perception of the CSR news landscape can easily become skewed.

Is CSR Getting a Boost from the White House?

I realize that the title of this post is absurd: the Bush administration hasn't been all that gung-ho about climate change - or any other issues that lie at the heart of CSR.

But as Americans increasingly oppose the war in Iraq, and are increasingly frustrated with the Bush administration's obtuseness, it seems to me that backlash against the White House has taken on a more general form.

Perhaps the best thing Bush can do for climate change is to ignore it, because Americans, and even the world at large, are eager to stand for something that our President is against.

The good, the bad, and the in-between

I've been researching CSR benchmarking recently - the awards and rankings that separate the "good" companies from the "bad" ones. As I compiled a lengthy list of these, I came across an article by David Vogel, who not long ago wrote The Market for Virtue.

His article ("When do 'good' firms go 'bad'?"; L.A. Times 2/13) argues that corporations are never entirely virtuous nor entirely evil, and that to say they are is an oversimplification. He points to half a dozen extremely compelling examples:

• British Petroleum (BP), which embraced alternative energy development but has struggled with industrial accidents that killed workers and destroyed Alaskan tundra.
• Microsoft, despised for monopolization but forgiven for it's founders charitable deeds - even if the Gates Foundation itself has been under recent scrutiny for its investment activities.
• Merck, which gives away river-blindness drugs but also failed to recall the blockbuster drug Vioxx after evidence of heart damage surfaced.
• Altria, the parent company of Philip Morris, which manufactures tobacco but does so on family farms owned mostly by minorities, and gives generously to charitable causes.

As more consumers, and more companies, pay attention to the reputational value of CSR, it's important to keep in mind that companies are complex organizations with many people, and people are complex organisms with many motivations.

People-to-People Power

Have you ever tried to take out a short-term loan? If so, you might have discovered that banks don't like lending to people who actually need the money. Often, it makes more sense to ask a good friend for a loan, and let him or her benefit from your interest payment. But what if we didn’t have flushed friends to take pity on us? Where would we go?

Well, now there’s hope: at least two new websites are enabling person-to-person lending among strangers, and they’re finding some brilliantly sensible ways to do it.

The most well-known in the U.S. is Prosper, which launched in February of 2006 and already has over 100,000 members. On the site you’ll see profiles of would-be borrowers that include a photo, a description of what they plan to use the money for, and some credit ratings. Lenders can distribute funds to several borrowers in small amounts, to diversify their risk. Borrowers specify the highest interest rate they are willing to pay, the total amount they want to borrow, and the time period during which lenders can “bid” on their business. Once there are enough lenders to fund the borrower’s request, new lenders can offer lower interest rates to take the place of other bids – until the bidding period is over.

For example, Listing #90006 writes:

"Hello, I am trying to get a loan so that I can pay for advertising for my glass business that I have owned for 8 years. I also want to help my wife get her website up for her home based business so that she can stay at home with our kids. Any help would greatly be appreciated and we would also like to loan in the future. Thanks and God Bless"

He is requesting $10,000, of which 24% is already funded. His credit rating is a C, with a debt-income ratio of 19%, and he is a homeowner. He is willing to pay up to 15% interest, and plans to repay over a three-year period. The funding promised to him so far is divided among 21 different “bids” – mostly in increments of $50 or $100. The bidding is open for another six days, but the site’s forecasting chart indicates he won’t gather quite enough to make his total loan. Perhaps he’ll try again, offering a higher rate.

There are hundreds of other stories on the site too – people who want to buy an engagement ring, put inventory in a new store, send the kids to camp, or pay off credit card debt. It makes for addictive reading.

In the United Kingdom, Zopa is a similar site, and prominently displays its average gross return of 6.75% interest, after accounting for bad debt. Not too shabby. The site doesn’t let you browse borrower profiles until you sign up for an account, which is a real pain, but maybe it ensures that only serious participants are there. Or maybe it’s just a pain. It’s hard to say since I didn’t succeed in getting an account myself – the site wouldn’t accept my U.S.-format phone number.

All in all, I’m excited about the potential for sites like Prosper and Zopa to revolutionize micro-lending. They offer a many-to-many interface that can transcend both national and organizational boundaries. At the same time, there’s so much more that could be done. Many of the borrowers right now – perhaps a majority – are looking for a quick financial fix after racking up high-interest debt, sometimes carelessly. Others want to pay for things that they’ll never be able to afford, based on their current jobs and lifestyles. Some are like I was at the start of graduate school – in a tight spot for the short term.

Very, very few are entrepreneurs and small-business owners.

Even fewer are social entrepreneurs.

I think that these websites could serve a new purpose, channeling private funds from small-time investors to social-sector ventures. Right now, it’s hard to engage in socially-responsible investing that is truly tailored to your values unless you’re very wealthy. The rest of us are stuck with choosing the one “social” index in a slew of mutual funds, and hoping that whoever is throwing stocks into that pot is doing a good job. How much more exciting would it be to choose your own social investments, choose their interest rates and your risk tolerance, and allocate your meager savings across several of them?

Person-to-person lending could, in the very immediate future, allow us to choose individual investments based on their financial, social, and environmental values – in whatever balance we choose, and for whatever amount we have to invest. As social entrepreneurs, this can also become a vehicle for raising funds to jump-start our ventures. After all, wouldn’t someone rather lend money to your AIDS-education initiative than to someone else’s new-car fund? (Already, the international microfinance site Kiva does something similar for developing-world entrepreneurs.)

In fact, there’s an opportunity here for someone, or several people, to start a “fund” of social-sector projects on Prosper – by directing social entrepreneurs to the site and grouping the projects together under a guarantor’s umbrella. Then lenders who are short on time can put money in the fund, and the fund manager scours the site for appropriate projects and diversifies investments among them. Ideally, the fund manager has a good credit rating, and that helps lower the interest rates that lenders are willing to accept.

This isn’t just your ordinary microfinance. This is connecting social entrepreneurship with socially responsible investing at a micro level, through the series of tubes known as the Internet. Is there anything cooler? (Why are you still reading? Go get started!)

Note: this post is adapted from an article I wrote for 1bloc (see www.1bloc.com)

Valentine's Day: A Good Time to Buy Organic?

A friend sent me this New York Times article (from 2/12/07) on the international flower-growing industry, and it looks pretty dismal: Valentine Roses Hit With Toxic Chemicals.

Some intense pesticides and fungicides are used to grow flowers in hot buggy climates and still get them through strict U.S. import criteria. The article is downright depressing, but the solution seems fairly simple - support organic growers.

I did a quick search online, and found Organic Bouquet. They're expensive - at least $50 for a dozen red roses - but for a product that's really a luxury to begin with, it seems only fair.

And besides, what better way to show how sensitive a guy you are??