Saturday, December 13, 2008

What is a Certified Socially Conscious Business?

Broadly speaking, there are three types of for-profit companies in the world today.

The first is the traditional, no-frills, no-second-agenda, profit-driven company. These are run according to the maxim, “Maximize short-term profits.” This is Primitive Capitalism incarnate.

There’s nothing wrong with profits for their own sake. Profits are vitally important to any endeavor interested in longevity. Just to be clear: I am a huge fan of profit. Imagine a world without it.

The second type of for-profit business isn’t actually out to make a profit at all – they’re just lumped in the for-profit realm by tax law. This is the For-Benefit Corporation. Newman’s Own is probably most iconic and possibly also the purest of this category of business. The company produces and sells salad dressing, salsa, coffee, and a whole host of other foodstuffs. The IRS considers it a for-profit, and they pay taxes accordingly. But every dollar of profit Newman’s Own has made since its founding in 1981 has been donated to charity.

Newman’s Own was started by wealthy partners who were no longer interested in earning money for themselves; instead, they liked to share their food and they had an overpowering drive to help others, especially sick children.

The Adam Smith Award was not established to recognize for-benefit corporations. We at The Naples Institute hold for-benefits in especially high esteem. We do not consider for-benefits for our award for two reasons, though. First, they deserve their own very separate award – we feel that they operate on a completely separate plane from most businesses, with a completely different set of standards by which they judge their own efficacy.

Second, the companies we intend to recognize with the Adam Smith Award are regular, everyday competitors that are concerned with a profit motive, that do have to answer to owners or stockholders. Fulfilling their social mission is one important aspect of their overall performance, not the totality of it.

Socially Conscious Businesses (SCBs), then, are neither primitive enterprises nor for-benefits. Rather, SCBs occupy their own step between the two – an important step, but one that every primitive company can choose to take.

The Adam Smith Award is reserved purely for for-profit companies whose management, and whose corporate culture, sees the value of socially-responsible behavior as an integral part of the company mission – not the only aspect of the mission, and not an aspect that detracts from profitability, but a vital component of that company’s essence nonetheless.

Smith’s concept of enlightened self-interest holds that to do the right thing benefits the doer, be that an individual, company, or government. The Adam Smith Award is designed to recognize the one company in Southwest Florida that best exemplifies this ethic in practice.

If you know of a company of any size based in the six counties of Southwest Florida, nomination is just a mouse-click away. Please contact me with the name of the company and a short description of why they deserve consideration for the Adam Smith Award for Socially Conscious Businesses. ted@naplessocialaction.org.

Please note: nominees that qualify will be Certified Socially Conscious Businesses for one year, whether or not they win the Adam Smith Award.

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