06/ 01/ 2005
by Emma Johnson
Giving back to the community doesn’t just give you a sense of fulfillment—it can also be really good for business.When Vermont Butter & Cheese started in 1984, the dairy products maker’s goal was to sell premium-quality, artisanal goat cheeses at a profit. But since there were few goat herds in the United States at that time, owners Allison Hooper and Bob Reese knew their concept was impossible without cultivating and supporting local agriculture—a cause they firmly believed in.
Today, the Websterville, Vt., company is thriving, and its owners attribute their success, in part, to the cooperative of 23 local goat farmers they’ve fostered, as well as the hormone-free cow’s milk they are dedicated to purchasing.
When asked if the company could make more money buying goat’s milk on what has since grown into a national market, Hooper says that would certainly be possible—but far from a consideration. “That wouldn’t be very satisfying,” she says. “You commit to a socially responsible business model because it’s the right thing to do. But I can’t imagine being ruthless or a mercenary.”
Vermont Butter & Cheese (http://www.vtbutterandcheeseco.com) is part of a trend of small businesses finding ways to balance socially responsible practices and a healthy bottom line. This movement is taking shape in the corporate world, too. In 2004, the number of publicly held companies reporting on their corporate social responsibilities in letters to shareholders grew by more than 50 percent over the previous year, according to a survey by investor relations firm Beyond Communications.
For the small-business owner, finding ways to give back to the community, improve the environment or cultivate happy employees can add value to your workday and boost your bottom line. But sometimes, social entrepreneurship is the only chance a small business has to survive in an economy increasingly dominated by price-driven conglomerates, says Jeffrey Hollender, author of What Matters Most—How a Small Group of Pioneers is Teaching Social Responsibility to Big Business, and Why Big Business is Listening.
“I think the only way a small business can compete with big business is by being responsible—by being the good citizen, the good community member,” says Hollender, who is also founder, president and chief executive of Seventh Generation (http://www.seventhgeneration.com), the leading maker of natural household products in the United States.
“We live in a time where the overall trust of big business is low because of unethical practices. This is an advantage point for the local business entrepreneur: Be ethical, build values into your business practices, work with local non-profits. Do good and it will make you a profit. How else are you going to reach your consumer?”
Vermont Butter & Cheese’s goat cooperative was formed more than two decades ago when Hooper and Reese convinced struggling dairy farmers in their area to switch to goat herding. The business partners obtained a small grant to produce a how-to manual, guaranteed fair prices and provided support with trucking, paperwork and product testing. The farmers are encouraged to maintain quality output because Vermont Butter & Cheese promises a premium for superior-grade cream, as opposed to leaving pricing to the open market. This way, Hooper says, they have more control over the high-quality cream their chèvre and fromage blanc cheeses require—and that their customers expect.
“Our producers are the envy of other goat co-ops around the country because we care,” says Hooper. “If our farmers’ equipment breaks, we give them money to fix it, because we know we need to take care of them.”
Unlike large corporations that promote their good deeds through annual reports or marketing campaigns, Vermont Butter & Cheese supports its cause by producing products that customers find worthy of buying.
“If we have to pay a high price for raw materials, we have to make a product that reflects that. We can’t just say to our customers, ‘We pay more, and therefore you should buy our product,’ ” says Hooper. “We’re so small, we don’t have the marketing to get that message out. We’re not like Ben and Jerry’s [Homemade Ice Cream] that made a business on doing good.”
For some companies, such as Manomin Resawn Timbers (www.mrtimbers.com), doing business and good deeds is symbiotic. The Hugo, Minn., company salvages wood beams from demolished, Industrial Revolution-era buildings and remills them into uniquely textured, amber-colored planks for home flooring and framework. The business started 14 years ago as a part-time interest of Jim Rice, who is half Ojibwa Native American, a culture that discourages waste and advocates environmentalism.
For 10 years the business grew slowly. Then four years ago Rice’s wife, Sarah Londerville, quit her management job with an airport retail company and joined Manomin full time. Since then, the company has expanded into a 25,000-square-foot building. Growth is fueled by Londerville’s managerial skills and Rice’s increasing interest in recycling and preservation.
“Jim was getting more and more into his Native background and the connection between conserving materials and his heritage,” says Londerville. (Manomin is an Ojibwe word meaning “wild rice.”)
Not only does the small business save timber from eternity in a landfill, but every part of the wood is salvaged. Sawdust is given away to horse farms; timber skins are used for wainscoting; wood chunks are donated to a local high school woodworking class.
While environmentalism is not the business’ selling point, the message does trickle down. “That the wood is recycled makes people feel really good, but we rarely get phone calls from people interested in the environmental end of it,” says Londerville.
Human nature seeks out ethically sound living—and it’s no different for the entrepreneur, says Bruce Weinstein, Ph.D., who appears weekly as CNN’s “The Ethics Guy” and is the author of the Knight Ridder/Tribune syndicated column of the same name.
“From a psychological perspective, it feels better to act in accordance with the values and beliefs we claim to have,” says Weinstein, author of the new book Life Principles: Feeling Good by Doing Good. “We are beginning to realize that it is possible to get what we want and also to show care and concern for other people and the environment.”
Coffee Exchange, a Providence, R.I., café and mail-order roaster, started out as just another participant in the global coffee industry. But 16 years ago, co-owner Bill Fishbein visited coffee-growing communities in Guatemala where he saw the connection between the coffee market and poverty.
“I realized that I was participating in that,” says Fishbein. “Every time I put coffee to my lips or scooped it into a bag, I was not only supporting the paradigm of that system, but I was promoting it.”
Gradually, Coffee Exchange (http://www.coffeexchange.com) began to purchase organic, shade-grown and free-trade beans, and 17 years ago Fishbein launched Coffee Kids, a non-profit dedicated to improving the quality of life for families in coffee-growing communities of Central America and Mexico. Today Fishbein is a full-time volunteer for the New Mexico-based charity, which operates on an annual budget of $500,000—almost all of which comes from donations and grants and is completely separate from the for-profit business, which Fishbein’s brother, Charlie, now runs.
Like many companies seeking to promote socially conscious products, Coffee Exchange’s roasts compete against drastically less expensive beans. But price disparity should not deter entrepreneurs from developing business models that jibe with their principles, Fishbein says.
“When you have a motivated sales force, you can sell anything, and price is not a factor,” he says. “A company’s passion for their product affects the owner of a business who is proud of going to work every day, all the way down to the sales guy and the shipping manager.”
Ultimately, running a socially responsible company, no matter the size, means re-evaluating traditional business values and determining what is important for you as a person. “You have to be willing to look at the bottom line in more than one dimension. Only looking at how much money you can stick in your pocket has limited value,” Fishbein says.
It's all Good
Most of the small-business owners in this story have been socially conscious for a long time. But it’s never too late to start.
Start small. You don’t have to save the world in one day. Pick a cause you support, or find a program that fits with your business. Choose to donate profits from one day’s sales; sponsor a local Little League team; or coordinate a volunteer activity with your entire staff once a quarter.
Recruit others. Talk with small-business colleagues about starting an event to benefit a local charity. Two voices are louder than one. And a few dozen are even better.
Follow your instincts. Support only causes that you truly believe in. Steer clear of getting involved with divisive social issues that may alienate customers.
Web extras: Find ways you can make a difference in the “Web Extras” section of http://www.NFIB.com/toolsandtips.
