Mike Hannigan is co-founder and president of Give Something Back, a commercial office supply company with a business model that makes charitable giving central to its core mission. The company provides green office products at superstore prices to customers all over the United States and donates a large portion of all profits to support community causes. Since 1991, the company has grown from a startup to the largest supplier of office products in the Western United States. Through its unique approach to charitable giving, the company has donated nearly $4 million to community causes, totaling over 50% of company profits. Can you tell me about your company? We are a business-to-business office supplies, furniture and printing company based in Oakland, California. We sell a full line of office products throughout the United States, primarily in California, and use the power of our business to create profit and distribute some of that wealth back into local communities through non-profit organizations. What led you to embrace this business model? We were inspired early on by Paul Newman’s company, Newman’s Own. We were so impressed by the company’s socially responsible business practices and how they donated a portion of its profits to charitable causes. The Newman’s Own business model really clicked with us and we used it as our model when we started out in my living room in 1991 with $20,000. Our overarching goals was to create a company that provided great value, but with the additional perk of supporting worthwhile community causes. Nearly twenty years later, Give Something Back has donated millions of dollars to community cause and we’ve grown into a national company. How is it financially sustainable to give away so much money and still stay in business? Give Something Back shifted the definition of “principal stakeholder” from “stockholders” to “the community.” Our business model is based on solid business planning, and we decided early on how much profit we could contribute to social causes while achieving our financial goals. Since our inception, we’ve given away approximately 85% of our accumulated profit while remaining a financial viable, for-profit company. Most importantly, our customers do not pay a premium to support our sustainable business model. In other words, it’s not a trade off purchasing office supplies from Give Something Back. How has your support of community organizations helped nonprofit organization achieve their mission? I’d emphasize that we don’t consider it our support, but our customers’ support. Our model is driven by our customers’ charitable preferences because we believe that our charitable profits are put to the best use when determined by people who live and work in those communities. Our process lets customers leverage their everyday office purchases to make a difference. Every year, customers select local nonprofits they’d like to support. For example, Sacramento customers choose from a list of Sacramento organizations, San Diego customers from a list of San Diego organizations, and so on. It’s a democratic giving process. For example, we’re headquartered in Oakland, California, and our local customers chose to direct funds to an AIDS support center in the East Bay. Give Something Back donated a $5,000 barbecue smoker to support the development of a barbecue restaurant, which would provide the nonprofit with its own source of funding. Is this mission-driven approach good for business? There’s no question. As the economy worsens, customers everywhere are demanding more accountability from business. There’s even legislation in many states to recognize the needs of community stakeholders, not just investors and stockholders, that will allow companies to do things that are good for the community without having to defend themselves against investor lawsuits. I believe that a fundamental shift is taking place. In addition to the government sector, private sector, and non-profit sector, I see an emerging social enterprise sector that embraces the power of business to create wealth in a manner that’s compatible with the best interests of the larger community. This idea is new, powerful and consistent with what most consumers want. Give Something Back’s social commitment has resulted in fiercely loyal customers, which makes it hard for our competitors to pull them away from us. It’s also resulted in very good PR and media coverage. Moreover, our social focus helps us cultivate happy, motivated employees. We have lower employee turnover and higher productivity than our competitors and great people flock to us partly because of our social mission. What advice would you give businesses about embracing eco/social responsibility? In our opinion, the question of social responsibility starts with a broad consideration on how a company impacts the larger community in which it operates. Companies considering social responsibility should consider their impact on the environment, as well as employees and vendors. It takes into account a company’s impact on all its stakeholders, not just its owners and investors. First, I’d encourage them to get involved with organizations that are developing progressive business approaches, such as the Social Venture Network and Business for Social Responsibility. Now, there are lots of national organizations exploring best practices around running businesses in environmentally and socially positive ways. Often, people will come to us and say, “I want to start a company like yours,” and we say, “Start by working for a company that practices social responsibility and figure out how it works.” If you don’t know how your industry works in a competitive marketplace, you’re going to fail because your customers won’t be well served. Finally, you must understand the competitive nature of your business. Give Something Back does not compete with companies like Staples and Office Depot on the basis of our good intentions. So, even if you want to start a business to make the world a better place, you have to compete head to head on the primary things customers want, including competitive pricing and great service.
