More Than a Balance Sheet: Business's Need to Help Society

By Jared Scott Levinson

A report by Cone Communications reported that over 75 percent of people say they'll refuse to purchase a product if the company supported an issue contrary to their beliefs. 

The evolution of business, due to consumer demand, has seen a need

• Language: English
• Publisher: New Degree Press
• Release date: Dec 31, 2020
• ISBN: 9781636761534

Book preview

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More than a Balance Sheet

Business’s Need to Help Society

Jared Levinson

New Degree Press

Copyright © 2020 Jared Levinson

All rights reserved.

More than a Balance Sheet

Business’s Need to Help Society

ISBN

978-1-63676-564-8 Paperback

978-1-63676-152-7 Kindle Ebook

978-1-63676-153-4 Ebook

Contents

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Acknowledgements

Preface

Introduction

Chapter 1

Being in the Business of Charity: When did the two entities become intertwined?

Chapter 2

Business’s Obsession with Image

Chapter 3

Business Pivots

Chapter 4

In a Pandemic, People Can Count on Business

Chapter 5

Who Bears the Responsibility to be Socially Conscious and impactful?

Chapter 6

Social Responsibility is the Ultimate Business Innovation

Chapter 7

The Socially Responsible Business Model

Chapter 8

People: The Base of Business

Chapter 9

The Biggest Risk

Chapter 10

Social Responsibility is an Added ADVANTAGE

Chapter 11

The New CEO Playbook

Chapter 12

The Giveback Economy

Conclusion

Appendix

Acknowledgements

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I would like to take the time to thank all of those who supported the launch and development of this book in its presale campaign. This journey would not be possible without your support and contributions.

•John Dempsey

•Diane Helyne Zyats

•Robert Ahrens

•Tyler Akers

•Evan Phillips

•Brandon Capece

•Peter Stevens

•Ali Akbar

•Kian Seddighnezhad

•Lauren Dempsey

•Rilind Abazi

•Varun Chandorkar

•Margaret Maurer Sokalsky

•The Deseta Family

•Sue Fulton

•Sander J Levinson

• Kim Levinson

•Steven Wiener

•Melissa Zyats

•John McGarry

•D.R. Keen

•Jonathan Montano

•Patrick Burland

•Jonathan Cadle

•Noah Musto

•Eric Koester

•Liam Barry

•Alyssa Scoda

•Jake Bates

•James Dooling

•Noah Levinson

• Sarah Barnes Keller

Preface

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The book is being written in the year of 2020. The same year where conversations around climate change continue to increase as the world witnesses the state of California and the country of Australia experience immense damage by wildfires. The same year where we are continuing to see rampant issues of gun violence and social justice and discrimination. The same year where the world is undergoing a global pandemic that continues to unleash destruction to families and lives everywhere. In a world of this much destruction and arguable chaos, the world is beyond the point of looking for someone to turn to. The world needs someone to step in and lead the charge for resolution now more than ever before.

Consumers are holding businesses today to a greater standard than before. A 2017 Cone Communications Study on Corporate Social Responsibility found that 63 percent of Americans are optimistic to turn to companies to take the lead on environmental and social change in the absence of government, and 78 percent of Americans would prefer if businesses took a stance and steps to address social justice issues in our society.¹ There should be little shock as businesses respond to these numbers.

For instance, Dick’s Sporting Goods as a large company responded well to such insights. After the February 2019 tragic mass shooting at Marjory Stoneman Douglas High School in Parkland Florida where seventeen people perished, Dick’s Sporting Goods decided shortly after that it would remove assault-styled weapons and guns from inventory at 125 of their stores.² Walmart followed in the footsteps of Dick’s Sporting Goods in the latter half of 2019. In response, after two mass shootings that had occurred that summer in Walmart stores in El Paso, Texas and Southaven, Mississippi, Walmart CEO Doug McMillon came out in an employee memo to say, In a complex situation lacking a simple solution, we are trying to take constructive steps to reduce the risk that events like these will happen again. The status quo is unacceptable.³ Walmart would remove the sales of handguns and some ammunition at their retail outlets.

Consumers are putting their dollars to power. They can drive change in the cultures around companies and the field of industries by what businesses they choose to support through where they make purchases. In the same study by Cone Communications 87 percent of respondents said they would purchase a product as a consumer if the company was an advocate and ally to an issue that was important to them, and likewise 76 percent would refuse to buy from a company if they were aware that the company supported a stance contrary to the consumer’s beliefs.⁴

Nielson furthered this concept of consumers driving the change in business with a 2015 annual Global Sustainability Report stating that 66 percent of consumers were fine with spending more money if it meant that the product was coming from a sustainable brand.⁵ While some may jump to think after hearing this about their parents and how they made purchases, the trend is becoming more true every day amongst younger generations. In the same survey, looking only at millennials, it was revealed that 73 percent of those millennials surveyed would also be willing to pay more dollars if the brand was sustainable, and 81 percent of this same group hope and even expect their top preferred companies to step out and become public in their declarations of corporate citizenship.⁶

Consumers more than ever before are conscious towards where their dollar is going. Just imagine how many jackets, coats, and other articles of clothing you see that advertise and boast that they’re locally sourced and provide fair compensation to those that sourced their production in just one day now compared to ten years ago! The difference is astounding. The reasoning for such a change is that we are bearing witness to a massive culture change in business that is undergoing as we speak.

From an Edelman’s 2020 Trust Barometer survey, out of all who participated, 87 percent of respondents shared their belief that stakeholders instead of shareholders are the key item to drive a company towards long-term and sustained success.⁷ There is a broader and more important picture here than just profits. Businesses that wish to stay around in the long run must begin to consider these realities and adjust accordingly. Consumers have focused and concentrated more into their trusts with brands than at any point prior. Now, people are willing to look past a discounted price of a few dollars if it means that the product is sourced by a sustainable, ethical, and fair company. IBM launched a 2020 Purpose and Provenance Drive Bigger Profits for Consumer Goods report in which it found that one-third of all consumers today would rather stop purchasing products that they used to buy if they had lost trust and faith in the brand.⁸

Having consumers trust a brand means the company is socially responsible. They are conscious towards the environment and ecosphere around them. They are conscious towards their own employees and not discriminatory against them. They are conscious and aware of their own products and services and always working towards producing the greatest give-back impact for society. Consumer trust in a brand is based on how a company lives out their own values. If they value all these elements, then the consumer is much more likely to trust and put faith in that company. Thus, there should be no shock when one-third of Americans aim to increase the amount of money they spend towards products and services that are socially responsible, and 86 percent of consumers were even willing to either switch, avoid, or even boycott a brand or product if its stance on societal issues did not please the consumer.⁹

Business has always been a significant force in giving back towards society and has seen a powerful influence in doing so. People are noticing how much capability businesses possess and therefore expect more. Businesses were projected to reach $2.23 billion in cause sponsorship in 2019 alone which was a 4.6 percent increase from the previous year.¹⁰ If you’re wondering just how much power a business has over a single individual in terms of giving back, corporate giving outpaces individual giving by a ratio of five-to-one. Overall, corporate giving has expanded by 15 percent since 2018 in just two years.¹¹

Business is in a great position with the power to capitalize its ability to help society achieve progress. Unilever released their own Consumer Study that found there was an estimated $1.2 trillion opportunity for brands that are clear and upfront about their sustainability credentials.¹² Again, social responsibility does not sacrifice a company’s performance and, if anything, enhances it. Brands that set out to improve society’s quality of life were projected to outperform the stock market by 120 percent.¹³ This advantage is to be gained when a business is more socially responsible. Social responsibility will boost a company’s profits and impact they can make towards society all at the same time.

Growth does not have to be sacrificed if a business wishes to be socially responsible. If anything, social responsibility will improve the growth for a business. Looking only at the consumer goods holding company Unilever that is notorious for brands like Dove, Lifebuoy Soap, Ben & Jerry’s, Lipton, and more. The company saw that in 2018, their Sustainable Living Brands experience growth was 69 percent faster than the rest of the business, compared to 46 percent in 2017.¹⁴ The business of sustainability is thriving.

Today’s best entrepreneurs and executives in business are modeling the way of how business needs to be transformed to meet the needs of today. These same leaders and innovators have been paving the way for their organizations to undergo change that serves their employees and their community all while driving profits. There is the future where business does not have to be negatively perceived as a drain to society. Instead, business is a force that can be tapped into in order to unleash a power for good. Businesses can be the drivers not just for profits but rather positive societal change. We all know we need that now more than ever before. It is time for businesses to be held accountable to this change. Such a change is not just good for the business, but it is also better for us.

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1 Sophie Komornicki, 2017 Cone Communications CSR Study - Cone Communications: Cone: Cone PR: Cone Inc: PR Agency: Boston: NYC, Cone Communications, May 17, 2017.

2 Josh Hafner, Dick’s Sporting Goods Will Remove Guns from 125 Stores amid Slumping Sales, Reports Say, USA Today, March 13, 2019.

3 Abha Bhattarai, ’The Status Quo Is Unacceptable’: Walmart Will Stop Selling Some Ammunition and Exit the Handgun Market, The Washington Post, September 04, 2019.

4 Komornicki, 2017 Cone Communications CSR Study - Cone Communications: Cone: Cone PR: Cone Inc: PR Agency: Boston: NYC, Cone Communications, May 17, 2017.

5 Sarah Landrum, Millennials Driving Brands to Practice Socially Responsible Marketing, Forbes, March 17, 2017.

6 Ibid.

7 Statistics Every Cause Marketer Should Know - Cause Marketing Statistics, Engage for Good, August 28, 2020.

8 Ibid.

9 Ibid.

10 Statistics Every Cause Marketer Should Know - Cause Marketing Statistics, Engage for Good, August 28, 2020.

11 Ibid.

12 Ibid.

13 Ibid.

14 Unilever’s Purpose-led Brands Outperform, Unilever, November 6, 2019.

Introduction

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One company set out to help others while also making comfortable socks began in 2013 through two men David Heath and Randy Goldberg. Heath and Goldberg came across the startling fact that socks were the hottest commodity being requested at US homeless shelters. Good Companies found that not only were socks the most requested item at homeless shelters but also added how the request makes a lot of sense when according to UCLA’s David Geffen School of Medicine, the homeless walk an average of 10 miles daily.¹⁵ After walking such incredible lengths, they may be exposed to certain elements that can lead to infections and other health issues. They realized there was a huge issue present and shortly afterwards Bombas was born.

I had the privilege of serving as a communications intern with the US Chamber of Commerce back in January of 2019 through August of 2019. Through my time at the largest and leading trade advocate for US business, I was fortunate to meet and hear the stories of so many entrepreneurs and leaders in business. I admired all that they were able to accomplish through the realm of business, and from that moment I was hooked.

I along with our other summer interns were given a special open-ended project by the COO at the time. The goal of the project was for us to be able to have something we could walk away from our internships with being able to say we did it! After some tedious brainstorming, we decided on a content series to cover young entrepreneurs in the DMV area that were initiating their businesses as ways to help out the communities around them. We would soon learn and meet those that were using cupcakes and baked goods to help with local hunger.¹⁶ There would even be stories of those tapping into the powers of virtual reality to assist the elderly.¹⁷ The project certainly opened my eyes to not only believe in business but also recognize that business was an asset in changemaking for our society.

When people think about examples of companies that are giving back and helping to make a difference in the world, most would generally think of tech companies leveraging their innovations to help uplift and empower others or the giant household name consumer goods company that has enough capital to gather resources together and make their mark. Not many people would initially think of, or even suspect, a sock company as an example let alone a company capable of making an impact on the world. In fact, the first time I heard of this company was on an NBC Shark Tank episode and a few Instagram advertisements.¹⁸ I was quite impressed with the company’s ability to not only deliver a successful product to market but to also orient their company with the mission to help others. I soon heard David Heath of Bombas come on to one of my favorite podcasts by Morning Brew, Business Casual, and I knew everything that David was expressing was not universal across business just yet.¹⁹ Yet, we are headed there.

From the very beginning, Bombas has focused their charitable and socially responsible impact to be a core point to their brand’s mission. They wanted to donate and give back one pair of socks for every pair of socks that were purchased under their brand of Bombas. For both Health and Goldberg, the line of work was so much more than delivering comfortable and stylish socks to consumers. 

Bombas has elevated itself to be much more than an apparel company or for comfortable socks. Heath stressed the need to be intentional in the overall mission, Really take the time to think through the product you are giving the people you serve or how you are giving back.

Likewise, the same intentionality is shared by Randy Goldberg in a 2015 article with Glamour.

It is crucial to define your mission and focus to work toward it. When you launch a give-back company, it’s easy to get carried away trying to help however, whenever and wherever possible—which is great. But remember, you will likely make a greater impact if you take the time to dive deep into the problem you set out to address and work toward solving it—especially at first. This will also help communicate a consistent message to your supporters and customer base, engaging them in the mission and your passion.²⁰

The story of Bombas is not a tale of a company trying to hide large profits behind PR social responsibility. In fact, at least once a month, Bombas will go out with their staff to volunteer at a shelter or soup kitchen with one of their 260 giving partners.²¹ They will help in ensuring those present get fed a nice warm meal and they can also obtain their donated socks as well! Heath added, It reminds our employees and ourselves that what we do here every day is about more than just building sales and revenues.

Heath and Goldberg thought of something far greater than a sock company. They both never aimed to just enter the retail clothing market and end there. They also knew it would be limited if they set out every day just trying to volunteer and help people. David Heath and Randy Goldberg saw the unique value in combining both aspects to their business and create a much bigger impact. 

I was