How Can Businesses Alleviate Poverty?
You may have never heard of Corporate Social Responsibility or Corporate Shared Value, but you have more than likely come across the products TOMS shoes, Newman’s Own or a slew of other companies who contribute goods to the impoverished with every purchase you make.
Many of these companies have taken advantage of new business models that consider a “triple bottom line,” instead of the traditional single bottom line-profit. A triple bottom line does not abandon the importance of profit margins, but incorporates the importance of social and environmental concerns in their business practices. For too long, international and even local corporations have continued the practice of making money at the expense of the most vulnerable populations, and often simultaneously consume or contaminate the basic resources these populations need to survive.
Wouldn’t it be remarkable if every purchase we made helped alleviate poverty? The following is a brief guide to help you not only understand how businesses can contribute to the greater social welfare of the impoverished, but to help you choose which businesses you invest in. After all, our money is one of our most powerful resources for implementing change.
1. Contribute to Sustainable Infrastructure
Is the business promising to donate 5% of all proceeds to a charitable organization that helps provide education to children in need, or are they claiming to donate one jacket for each one you purchase? There are many business models that fall under the category of “socially responsible,” but very few businesses implement sustainable ones.
Sustainable strategies have the added advantage of not only providing one-time support, but providing the tools necessary for people to empower themselves and break the cycle of poverty altogether. Businesses who invest in programs or initiatives designed to build sustainable infrastructures, which the poor can utilize to better their financial and social circumstances, inevitably end up having a much greater impact.
Such practices as “buy one, give one” models do not necessarily accomplish this. In fact, many companies who utilize “buy one, give one” models need poor people without their product in order to sell their product.
2. Pay Attention to Supply Chains
Earning a living wage in working conditions that respect human rights is essential to alleviating rates of global poverty. However, in today’s globalized economy, it’s hard to know where exactly the product you buy is being made and in what kind of conditions it was produced.
Though the company may be based out of the U.S., the raw supplies may be imported and the product manufactured in South East Asia via numerous factories with no association to one another. Despite the barriers, there are mechanisms available for consumers and businesses to identify supply chains behind the products they purchase to ensure the fair and respectable treatment of the workers who produce it.
Those businesses who have taken the extra effort to guarantee ethical supply chains usually will indicate so on their website. There are also organizations such as the United Students Against Sweatshops (USAS) who can help you locate such businesses, as well as online shopping sites such as fashiongchange.org that claim to only allow businesses to operate through their website if they meet certain socially responsible prerequisites.
3. Work with Local NGOs
Businesses who work with local NGOs (local, as in where their product is manufactured) have a higher probability of not only adhering to sustainable practices, but also actually addressing the most pressing problems of that region. If a business donates high-strength eye glasses to a population that suffers from an unusually high percentage of cataracts, the business would most likely categorize this effort as socially responsible.
However, what they might not know is that the high presence of cataracts is largely due to malnutrition. Cooperation with local nonprofits increases the amount of knowledge businesses have about the population they are trying to help, and increases the likelihood that their efforts do not bypass the actual causes of the problem they attempt to alleviate.
During the holiday season there is often a sharp increase in charitable donations. However, using the above guidelines, you can also ensure the gifts you purchase make an equal, if not greater impact on those who need it the most.
– Jamison Crowell
Sources: New York Times, Huffington Post
Photo: Global Envision