If we do nothing, then nothing will change.

The Chinese philosopher Lao-tzu (604–531 BC) famously said that a journey of a thousand miles begins with a single step. Certainly not as enduring, but with a similar meaning, I often say that clarity comes with action. The more you do, the clearer your thinking will become. When you start something quite new you don't have all the answers — you don't even know what all the questions will be — but with action comes clarity.

Shared value

A large part of this book is devoted to the concept and worth of creating shared value. Shared value is economic value created by addressing the needs and challenges of the community. In effect, it's a company putting their resources into a community or social need and by addressing that need bringing value back to the company. The value may be in a new, previously untapped market; it may be in securing raw materials from local suppliers, ensuring continuity of supply; or it may be demand-led innovation that forces change to their product.

The obstacles to creating an integrated shared value model within a business will be tied to the change that is required. There may be significant investment in change to manufacture and certainly there will be risk, with returns not immediately forthcoming. Investment in research to identify the opportunities within the marketplace will reduce the risk, but the resources required to conduct such research may be beyond the means of all but the larger corporates.

There are lessons for all of us in the concept of shared value, even if it is not a fit for those just looking to bring a level of giving into their businesses. The overarching theme is that we should be doing good by doing good. This book looks at how to maximise the giving to create a return. When there is a return that can be measured there will be greater enthusiasm for the giving. If we can identify and articulate those returns that are positive for the business, we are likely to give more and become more sophisticated in our giving.

In the chapters that follow we will look at the following questions:

• What are the benefits to business of getting involved in community problems?
• If you're going to get involved, how do you select your partners?
• What are the options around getting involved, and how much involvement do you really want?
• Why does the concept of shared value make sense?
• How do you make your investment in the charity sector a profit centre?
• Why is it in everyone's interest that you're doing good by doing good?

Who should read this book?

I think there are five main groups of people who are going to take the most value out of reading this book:

• those with an interest in business who are looking for new opportunities to improve end-of-year returns
• those working within, or hoping to expand their knowledge of, corporate engagement
• those involved in the charity sector as charity leaders or directors on not-for-profit (NFP) boards
• those who call themselves philanthropists or who play a role in foundations that distribute money to charities and NFPs
• social entrepreneurs who love the excitement of building new business ventures while at the same time benefiting others.

In the following pages we'll explore how each of these groups stands to benefit from the case I'm going to make.

Essentially, the book represents my observation and interpretation of those who have worked within this space and have added immensely to their business or the company they work for and to their own personal wealth, and along the way have also managed to feed their soul. What ties them all together is that their pursuit of doing good has resulted in their doing good, and therein lies the magic.

The book contains a collection of case studies from public and private companies of various sizes who have adopted corporate social responsibility (CSR) in the past but have jumped ahead of the pack in developing a new style. In most cases they have changed the course of their giving in order to create a deeper impact in the communities they are working with, and consequently they have seen a direct improvement to their business. The improvement they have seen may take the form of raised morale, deeper engagement, a tighter workforce, new customers or increased brand awareness, and a number of these companies have already seen increases to their bottom line. But what you will see is that many of these results were incidental to and not the driving force behind their change in community engagement.

I should declare a personal interest in a number of the organisations I have profiled in this book, insofar as I have worked with them on a consulting basis to implement or overhaul their strategy for contribution and engagement with the community. There are also a number of case studies from companies whose presence or position I would love to take the credit for, but sadly I cannot. The entrepreneurial vision of Blake Mycoskie, the founder and ‘Chief Shoe Giver’ at TOMS, is an obvious choice. What I love most about the work of TOMS is the sheer simplicity that sees the model work so effectively. No messy formulas, no percentages from gross or net profits, just one for one. As a businessman Mycoskie has done very nicely from his social venture, and in my mind there is absolutely nothing wrong with that. The community can only benefit by encouraging and applauding those who, like Mycoskie, bring their skills and vision to this sector, rather than losing them to the corporate world.

Mycoskie doesn't have all the answers to the problems in developing countries; he doesn't pretend to. Is his model the only one to follow? Maybe not, but there are several million people in the developing world who, but for TOMS, would not have shoes on their feet today. And that has to be a good thing. Mycoskie was always going to be a huge success and make a stack of money, given his eye for opportunities and ability to turn concept into reality, and the children of Argentina, Nepal, Malawi, Kenya and Ethiopia are better off as a result of TOMS’ commercial success.

If you have CSR attached to your job description, unless you are with quite a large organisation, there is a good chance this is not your only role. You may also be wearing a marketing or internal communications hat and CSR is just something the executive team thought should sit with you when they looked for a home for it on the org chart. Their thinking reflects how they see it: ‘It's a nice thing to have in the organisation, but it's not sales, that's for sure. It's not operational. It's the softer side of things.’ Even those of you who are working in a dedicated CSR role will probably have come from marketing, PR or internal comms. How does the fact that you work in marketing or communications qualify you to make the best decisions on something that can be so important to the business, and has so much potential if the resources are appropriately allocated?

You might rightly ask the same question of me. How does working in the forensic area investigating major crime for 20 years make me an authority on this? My answer is: the experience of setting up the international aid organisation Hands Across the Water, a charity that now operates in three countries and raises several million dollars a year for distribution to hundreds of children across various sites in Thailand. And it's not so much the establishment of the charity as it is observing the success that has come from creating opportunities for our supporters along the way to share in the experiences.

I'm fortunate that I can travel on both sides of the road. As the founder and leader of the charity I see what type of sponsorship, involvement and relationships work best for the charity. Contrary to popular belief, just because you draw a seven-figure salary or work for an international accounting firm, it doesn't mean you have all the answers for small to medium-sized NFPs. A recent comment in The New York Times from the head of a charity summed it up pretty well: ‘If I get another volunteer I am going to go out of business.’ As a consultant building these programs for businesses, I understand what they are looking for and where the opportunities lie. I understand what is going to work with the charity and create lasting relationships. By playing in both spaces it's a bit like running with the foxes and hunting with the hounds.

The message

What I hope that those working within the corporate or business world will take from this book is the idea that there is another way of interacting with society. It's not wrong for your business to benefit from the interaction; in fact, it's a damned sight better for all involved if you do benefit commercially from your activities in this space. The position that Unilever Global has taken on business growth and sustainable activities is ‘out there’, to say the least. It has attached its sustainability goals to the remuneration packages of its senior management team. Now there is a company that is driving its stake firmly into the ground.

There are a couple of shifts I see that are needed to move from the old paradigm of giving without any real expectation of return, other than publicity as a good corporate citizen, to the new paradigm of integrating shared value into the business. The first is the recognition that real benefits do exist and it can drive new business opportunities. The second, and probably most important for Australians, is being okay with saying, ‘I want to make money out of our social venture’. When those words can be spoken without drawing gasps or looks of disbelief around the room, we are on the way.

The message in this book for the charity and NFP is accepting there is another way of doing things. If you don't accept change you won't grow, and you are likely to see your effectiveness and influence diminish over time.

Many charities, particularly those that have been around for some time, either have accepted the need to change and continued to evolve in their operations, with their funding attached to the provision of services, or are watching their market share of the charity dollar slip further and further. For charities to grow or even survive in such a competitive marketplace they need to do things differently. This means not simply asking for money. Dan Pallotta, a charity founder and someone with strong views on how charities should spend their dollars, believes that people actually want to contribute and reach their full potential. And the traditional support of charities through the donation of a portion of people's income is not coming close to tapping the potential.

I spend a lot of my time in front of other charities of small to medium size who want to know how we at Hands have successfully captured our share of the marketplace. Usually my advice can be simplified to these points:

• Create an experience to bring your supporters closer to what you are doing.
• Ensure you tell the story of what you are doing and the difference you are making, and inspire them sufficiently to want to tell your story.
• Help your corporate partners to find a way to maximise their investment in your charity.

It should go without saying — but I'll say it anyway — that if a charity already has the heart, mind and wallet of a supporter, it will stand to benefit if that supporter can improve their business through the relationship. If charity leaders are better educated about why business would want to engage with them and how their partners can profit from the experience, then the power in the relationship will shift towards one of equal footing. Rather than sending off your founder or chief fundraiser to ask for more, like a grown-up Oliver Twist, enable your charity leaders to bring value to the table. A lot of the lessons in this book are not rocket science; in fact, none are based on science on any level at all. Rather, they are based on the concept of shared value and looking to create mutually beneficial relationships. The book will provide the charity leader with a road map for helping their partners to find rewards in the way they give and to measure their returns.

Charity boards seldom have the same pressure to perform as a commercial board does. The shareholders of a company have skin in the game, they have a voice and they have a vote. They expect the directors on the board to perform and bring them a return, or they are out the door. The expectations on a charity board, while not insignificant, are different and generally less onerous. They are seldom held to account in the way a commercial board is. What comes with this greater tolerance is a level of complacency, an acceptance of the status quo and a resistance to change. As US writer Seth Godin puts it, ‘If you are not upsetting people, you are not bringing about change’.

Too often directors on charity boards lack the necessary level of competence, or hold their positions well beyond their use-by date. The boards of charities need to be challenged in their expectations that people will donate because they have in the past or that they should get services for nothing because they are a charity, ignoring the well-known truism that ‘you get what you pay for’. Charities need to challenge the status quo, they need to provide value on both sides of the equation — for those they are supporting and for those who are funding them. There needs to be an enhanced level of shared value for sustainable growth.

Dreamers of the day

If you asked me what I would like to do ‘when I grow up’, the answer would be to sit at the head of a large foundation that makes grants to charities and NFPs. What's the attraction in that? I see huge opportunities within those foundations to drive change in the charity sector. There would be serious incentive to implement change if the bankers of the charities attached productivity change to their dollars — not through imposing sanctions, but through paying bonuses for the implementation of change programs that will drive shared value. Access to grants from many foundations is by a process of filtering out charities based upon a diminishing criteria. The criteria will often start with the need for deductible gift recipient (DGR) status, then they might include the requirement that those charities who receive the funds only support Australian children living in rural areas that come from single-parent homes, are under the age of 12 and have a low attendance rate at school. They are clear on who they want to support and on the projects they want to support. Many also require the provision of reports on how their money is spent. But very few look at the effectiveness of the charity or NFP or at how change to that organisation could see the better utilisation of many donors.

A case in point is the annual ‘Failure Report’ produced by the NGO Engineers Without Borders. The name of the organisation makes it clear what it does and where it works. This insightful report looks at what it has done (nothing new there) and also what didn't work. It then looks at the lessons to be learned and makes recommendations for next time. It's a wonderful, honest and courageous document and so refreshing to read.

An interesting report from Engineers Without Borders that speaks to this point concerned funding for the implementation of a water project in an underdeveloped area. The funding was to a Canadian group and was for the installation of a water system — specifically, a new system. While they were installing the water system, they were stepping over and removing the US-installed system that had broken down. The water would be drawn from the same source and delivered to the same community via very similar technology. The report found that for a fraction of the cost of the installation of the new system they could have made repairs to the US system that already serviced the community. They could not do that, however, because the funding conditions did not allow for maintenance or repairs but only for the installation of a new system. It didn't make sense to those on the ground and still doesn't make sense. It's a clear example of a donor determined to take sole credit and showing inflexibility in the use of their funds. It also shows where the power lies. Not equally between donor and NGO, not even close. My point is that if those at the foundation level choose to form a partnership rather than believing that because they have the money they should make all the decisions, the foundation's or donor's money could be more efficiently utilised.

The final group I see deriving real value from this book is the social entrepreneurs. These individuals may have worked in a dozen different jobs, following three or four different ‘careers’ by the age of 25, but haven't yet taken control of the company so have decided the best way to make their mark is to do it for themselves. The socialpreneurs are best described by T. E. Lawrence: ‘All men dream: but not equally. Those who dream by night in the dusty recesses of their minds wake in the day to find that it was vanity: but the dreamers of the day are dangerous men, for they may act their dreams with open eyes, to make it possible’.

The socialpreneurs defiantly dream by day and more often than not they make it happen. They make it happen quickly, and if it doesn't come to fruition they move on and keep trying until it works. The best example in this book of a socialpreneur dreaming and making it happen, while epitomising the concept of doing good by doing good, is Blake Mycoskie, the founder of TOMS. He had kicked around a number of business ventures, some of which returned a nice profit, but they weren't feeding his soul so he walked away from them. Actually he headed to Argentina to learn to play polo — and the rest, as they say, is history.

The socialpreneurs I've worked with don't need approval to make things happen. They don't conform to the limitations of funding through foundations or conditions attached to grants. They are driving a for-profit with a clear social benefit, and therein lies the magic; this is why it becomes sustainable and why they can set the course without the mindset limitations of those who believe they know what works best. When it is your money, rather than a gift or grant, a different level of freedom exists. I don't believe this is the only way forward, but it's one worth investing in and worth keeping an eye on. Plenty of them will fail, plenty will have dumb ideas, but among the coal there will be diamonds, and often those diamonds are worth a tonne.

I was part of a panel of judges at a humanitarian conference in the Philippines where we listened to presentations made by university students from places across Asia, including Nepal, Pakistan, India, Indonesia and many other countries. It was a bit like the reality TV show The X Factor, but for those with a social conscience. Just like the TV show there were plenty of auditions and pitches that never made it to the stage, and of those that did there were a few that were brilliant, and others that had the passion but were unlikely to crack the market, for now anyway. What was most inspiring about every one of the presentations was the desire, the lateral thinking and the headspace they were in. They had the courage and audacity to think they could tackle some huge social issues, and in some cases you knew they would.

So if you're in business looking to make a profit, working in the for-purpose space wanting to make a difference or you're a socialpreneur who wants to do both, fast, then together we can explore what works, what doesn't and what your best approach might be to doing good by doing good.