Close

April 19, 1996

Staying Viable: Money Makes the Generosity World Go ’Round

Share With Friends

Doing good is no longer measured in one-time gifts and efforts. Today, doing good means addressing a problem, need, or injustice holistically, not just showing up with a big check or cutting a ribbon. It means being in for the long haul and staying invested until real change occurs. And that type of generosity depends on a sustainable organization. So staying financially viable is the second essential competency in the business of generosity.
Jim Collins says, “In a truly great company profits and cash flow become like blood and water to a healthy body: They are absolutely essential for life but they are not the very point of life.” A business that is pursuing multiple bottom lines had better remember that these still include the old-fashioned bottom line. It had better have the profits to fund its marketing causes and sustainability initiatives. Meanwhile, a do-gooder organization had better make sure it’s attracting donations, sending out winning grant proposals, or earning income on the side. Achieving a mission is its point, but money is its lifeblood.
It’s obvious: if you go belly up, you won’t be helping people for long. Many once-marquee companies have vanished—Eastern Airlines, Arthur Andersen, Merry-Go-Round, RCA, and Burger Chef, to name a few. None of them gave any money away last year. Sure, a few people may have made enough money from these now-bankrupt businesses to start their own foundation or create a giving platform. But, overall, the loss of these companies means that the generosity curve has declined.
Lauren Bush Lauren, founder of FEED Projects, says, “Not every business is a bleeding heart. The businesses we partner with want to do good but also worry about the bottom line.”
Meanwhile, leaders at not-for-profits must always be thinking about how to keep the money flowing in. Sadly, many are not very good at it. In some charitable circles, it’s even fashionable to have a kind of disdain for moneymaking.
On the other side of the coin, growing income means multiplying good. Shoe company Oliberté “strives to develop a thriving middle class in Africa by creating fair-wage, sustainable jobs in the heart of Ethiopia—and business is good.” They’re selling stylish shoes at a profit and in the process are making life better for poor people. Making money and doing good can naturally go together. It’s no wonder that some of the most entrepreneurial parts of the world are also hotbeds of innovation and activity in generosity.
A friend of mine once said something that has stuck in my head: “Everything has overhead.” True. And that includes generosity. Because the business of generosity has overhead just like any other business, we need to bring in money somehow.
Now, doing good isn’t just an impulse that should be directed at those in extreme need. Milton Friedman may have gone too far in trying to steer businesses away from charity, but he was right in saying that company leaders have a responsibility to employees, stockholders, investors, and suppliers. A company helps these people through making a profit. At the same time, it keeps the organization going so the organization can keep doing good internally and externally.

Share With Friends