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March 4, 2019

The Three Elements of Sustainable Generosity

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Five years ago, I published a book called The Business of Generosity. My goal in the book was to survey the landscape of generosity and highlight the best practices I was seeing.

At the time, generosity was a hot topic. No longer did businesses simply have a corporate giving line item in the budget. Increasingly, generosity was woven into the fabric of the business itself. I interviewed more than two dozen individuals across a wide spectrum of for-profit and not-for-profit organizations, and I kept coming face to face with the reality that generosity was now the rule rather than exception.

Here’s some of what I heard:

  •  “The old label of business being coldhearted and all about profit is being deconstructed by necessity.”
  •  “Charity becomes a way to shrug off responsibility. But charity is no solution to poverty.”
  • “It is the requirement of everyone to participate in some way.”
  • “The concept of investing and donating are sliding closely into the same swim lane.”

You get the idea. Everyone was dissatisfied with the old model of “make a lot of money and (if you’re nice) give a little.” The new model was everyone should be generous, and the best are more creatively generous than you could imagine.

That was five years ago. Has anything changed?

I’m not sure whether it qualifies as a change, but one part of the book has become increasingly prominent in recent years—Chapter 4.

Chapter 4 is titled “The Three Competencies of Generosity,” but I think if I was naming it today, I might simply call it “Sustainable Generosity.”

Five years after publishing the book, I am more convinced than ever that companies must be intentional to ensure that their generosity will last. The test of a company’s generosity is not whether it can write a fat check to the Human Fund at year-end, but whether it is thinking generously (which includes money but isn’t limited to it) all year. And then, whether it is still thinking generously 5, 10, and 50 years from now.

Sustainable generosity in a commercial setting really comes down to a company’s ability to do three things: do good, stay viable, and remain true.

Do Good

Michael Porter is the founder of the modern strategy field and one of the world’s most influential thinkers on management and competitiveness. No, really. I pulled that phrase off his Harvard bio. He runs the Harvard Institute for Strategy & Competitiveness. Michael Porter=Strategy.

Here’s what Porter says: A business needs “policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates.” (emphasis mine)

That’s right. Mr. Strategy himself says you must do good. It’s not optional.

The implication here is that truly sustainable good is not simply a token “give back” after you make massive profits.

Sustainable good requires thinking through what it means to “do good” to those your company or organization touches on every level. Employees, clients/customers, suppliers, the community, etc.

This is why Chick-Fil-A, for example, can’t simply give employees Sundays off (though that’s great). It must also be known for being generous donors in the community (which it is in my hometown), responsibly sourcing the chickens, etc.

Think through your chain of influence and effects. Where do you need to do some good?

Stay Viable

Let’s go back to Michael Porter. Here is the same quote but with new italics: A business needs “policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates.” (emphasis mine)

You get the idea.

If you desire for your company to be sustainably generous, the company must itself be sustainable. It must continue.

Whether you’re a for-profit or a not-for-profit, you must figure out how to keep cash flow in the positive, plain and simple. Jim Collins calls profits and cash flow “blood and water to a healthy body.”

Some of my heroes are the people who equate increased profits with increased generosity. They take risks sometimes, cut costs other times, make hard decisions all the time, and they do it all with an eye toward viability that produces generosity.

What are the 1-3 greatest threats to your viability in the next decade?

Remain True

In his book Mission Drift, Peter Greer describes organizations that are Mission True and Mission Untrue. He says that non-profit organizations drift off mission “slowly, silently and with little fanfare.”

I would argue the same happens with for-profit companies. Many of them start out with a goal of bringing good for the masses, but over time that morphs into “increased value for the stockholders.” There was rarely a moment where they said, “We no longer agree with the mission statement,” but it was no longer front and center.

That’s not to say mission statements are easy or that it’s all about the mission statement. But you have to keep the “why?” and the “what?” front and center for your people.

Why? Because mission and vision can leak. Sometimes it leaks because adversity throws you off balance. Sometimes it leaks because success makes you lazy. Sometimes it leaks because you chase the next customer or contract.

Don’t let your vision leak. Remain true.

Where have you drifted in the past decade? Where does that lead in the next decade if unchecked?

Conclusion

Do good. Stay viable. Remain true. Imagine having two of these but not all of three.

If you did good and remained viable, but didn’t remain true to your mission, your generosity would jerk back and forth from one ditch to the next, making it impossible for there to be traction for those you wanted to help.

If you did good and remained true to your mission but didn’t stay viable, it wouldn’t be long before you didn’t have anything to be viable with. Your business would go under.

If you remained viable and true to your mission but didn’t persist in doing good, you would eventually be revealed as a fraud by employees, customers, suppliers, or others who saw you for what you were—parading your commitment to generosity without having positive impact on those closest to you.

This is why a company cannot sustain its generosity without all three of these things. And a company cannot do all of these three things without constantly keeping them in front of itself.

To read more on the topic of generosity, buy The Business of Generosity here or here.

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