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Monday, December 31, 2007

10 Profits With Purpose

In 2007, Fast Company magazine ( embarked on an experiment to apply to the for-profit sector the rigorous methodology developed by Monitor Group ( for the Social Capitalist Awards.

The idea, as I understand it, was to identify companies that are not only making money for their shareholders and meeting the needs of their other stakeholders such as employees and customers --- but who also make the world a better place.

Here are the ten companies that passed the test. Each of them is worth a look, in my opinion.

Better World Books ( raises money for libraries and university groups by reselling their unwanted used books online. They even re-use old library shelving in their warehouse.

Developing World Markets ( packages loans from microlenders into financial instruments that provide market-rate, risk-adjusted returns. (This is different from the price gauging that many lenders are doing in third world markets.)

Domini Social Investments ( is a pioneering mutual fund manager that only invests in businesses that pass rigorous social and environmental standards. They also work with portfolio companies to improve their record in these areas.

Equal Exchange ( specializes in "fair-trade" commodities, such as coffee or American cranberries. Given the latest news that the bulk of the world's apples are being produced in China, we might want to take note of Equal Exchange!

Herman Miller ( produces easily disassembled and recycled office furniture, etc. More than 96% of what they produce can be re-used. Their goal is zero operational impact on the environment by 2020.

New Leaf Paper ( develops and sells eco-friendly paper. It's statistics on trees saved, water saved, greenhouse gases eliminated, etc. is impressive.

Organic Valley Farms ( is a cooperative of some 1,170 organic farmers --- into a national marketing network. (Think of it as the "ebay of organic food.") Prices are set to keep farmers in the black, profits are split between members, employees and communities.

Seventh Generation ( makes nontoxic household and personal care products.

Shorebank ( forged an industry financing customers in neighborhoods that are traditionally neglected by major lenders. Today they compete in overlooked cities (like Detroit or Cleveland) and by offering refinancing options for subprime borrowers of other banks.

Sustainability ( helps clients focus on sustainable business models. That might not sound unique, but in this day of slash-and-burn leadership, where shareholders are gauged for executive pay packages, employees are discarded like yesterday's trash, and customers are left angry and frustrated --- it is unique. Businesses today must learn to operate solely on sustainable business models. Sadly, many business leaders seem to be unaware of that.

This is an interesting and eclectic group of companies. The reason I am intrigued by the list is that over the years, as my own moral compass has grown in strength, I've developed a philosophy about business.

I don't want to work for or own any company that isn't creating real, tangible value. That means it has to create value that didn't exist before, or give people access to value they couldn't access before. I think for the most part, me and Fast Company may see eye-to-eye on this one!

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