Case
Social Entrepreneurs Run Business for the Common Good
Social entrepreneurs start ventures to do well in business and do good in the world, and they often end up changing “business as usual.” When actor Paul Newman and his friend A. E. Hotchner launched Newman’s Own, the two had Newman’s favorite salad dressing recipe, $40,000, and no business plan. The actor balked at having his picture on the bottle but then decided he could engage in “shameless exploitation” if the proceeds went to charity. Now Newman’s Own is known for its all-natural products and its practice of donating 100 percent of its after-tax profits to worthy causes. The company has given more than $200 million to charities worldwide and founded Hole in the Wall Camps for children with cancer and other life-threatening illnesses to attend summer camp free.
Michael J. Fox is another of the rich and famous driven by a social mission. Diagnosed with Parkinson’s disease, Fox started an organization to find new treatments for the disorder and got big-name investors to join the cause. While spending more than $100 million on research, the Michael J. Fox Foundation has tried to change how scientific funding works by reducing bureaucracy and staying involved with researchers to get more accountability and faster results.
Not only the well-known and well-connected are social entrepreneurs. Record producer Louis Posen has given more than $1 million to charity through his small punk rock label. After a degenerative eye disease left him virtually blind and ended his plan of a film career, Posen started Hopeless Records, which employs nine workers and grosses about $5 million a year, a feat in the small punk rock segment. Artists can choose to release their records on either Hopeless or Posen’s second label, Sub City—a name derived from subsidy and subculture—that donates 5 percent of the gross profits to charity. Half the money from the Sub City label comes from artists’ royalties and half from Posen’s profits. According to an executive at Warner Music Group, which helps distribute Posen’s albums, “Louis has the spirit of an entrepreneur and a heart of gold.
1. What characteristics do you think are common among social entrepreneurs?
2. What should be a social entrepreneur’s primary goal? Why?
