Doing Well by Doing Good
Opening the Door to Ethical Capitalism
by Mieke H. Bomann
Sheila Lirio Marcelo ’93 needed help. An entrepreneur-in-residence at Matrix Partners, a venture-capital firm, she was busy trying to get her own Internet start-up off the ground. But first on her to-do list was finding a nanny for her two boys, one of whom also needed a tutor, and personal care for her father, who had undergone heart surgery. Her two dogs also demanded some regular exercise. The convergence of those personal needs, combined with a desire to find work she was passionate about, helped her to formulate Care.com, a Web-based service company aimed at people who need outside help for some of life’s most important tasks, but who don’t have the time or the information resources to get it. “I really wanted to focus on [building] a for-profit company that had a social mission,” she explains. “So I started looking at families and children.”
Capitalism With Heart
Marcelo is one of a small but growing number of contemporary entrepreneurs who believe that work should mean more than a paycheck. A new magazine dedicated to this emerging ethical capitalism movement, motto, outlines it this way: “Profitability drives possibilities. Companies play a growing role in our society, and they should be a force for good.”
Marcelo adds that brainstorming and partnering with other people who share your passion are essential in making a business with a social mission successful. Additionally, it helps to have a joint law and business degree from Harvard University, as she does, but Marcelo notes that it’s key to find a financial partner who understands your values.
She found all of the ingredients she needed to form her own company at Matrix, where colleagues agreed to support her as she wrote up her business plan (Planning tip: “If you can’t convey what you want to do in fifteen PowerPoint slides, then it’s probably more complicated than it needs to be.”), and then gave her a chunk of the $3.5 million needed for start-up.
Founded in 2006, Care.com offers to subscribers in all fifty states the names of tutors and child-care, pet-care, and senior-care providers, and is expanding its services and client base daily. Marcelo has twenty-two employees and generates income through an annual fee paid to the company by thousands of service-seekers.
Linking Poor Farmers to Agribusiness
A need for more challenging work and the at-home requirements of her first child spurred international development officer Vijaya Pastala ’89 to establish Under The Mango Tree (www.utmt.in), a certified organic agricultural trading company. Headquartered in Mumbai, India, the firm aims to link poor agricultural producers with sustainable urban markets in India and the rest of the world.
After nearly twenty years of establishing farmer networks and producer cooperatives for the World Bank, the Aga Khan Foundation, and the Asian Development Bank, Pastala saw a growing demand from urban dwellers for natural and organic produce. She sensed an opportunity, and in 2006 established UTMT. Its goals include sourcing markets for organic agriculture, providing start-up capital and credit for subsistence farmers, and, eventually, branding selected products.
“My objective is to run UTMT as a profit-making company with ethical values and social consciousness,” writes Pastala in an e-mail. She focused on natural-resource planning in developing countries for her master’s degree in regional planning at the Massachusetts Institute of Technology.
One of the company’s first big pushes is a partnership (still in the works) that will link Anil Starch, one of India’s largest maize companies, with a network of 10,000 farmers across six Indian states. The result will be a sustainable supply of and market for 30,000 metric tons of grain at the local market price. Thanks to Pastala’s relationship-building skills, Anil Starch also is considering investing in local warehouses, dryers, and irrigation infrastructure that is desperately needed by the poor producers.
The veteran nonprofit organization employee is quickly learning the business and marketing essentials of a trading company with a social enterprise twist. To get UTMT up and running and organically certified, she used her own savings and borrowed from family members. Pastala’s office is low-rent—it’s in one of her bedrooms. She meets buyers, network partners, and suppliers at a local club. While not yet drawing a salary—her husband is chief executive of the Make a Wish Foundation, India, and helps pick up the slack— Pastala soon plans to hire an assistant and eventually to earn service fees from corporations, such as Anil, for whom she acts as an aggregator.
Like Marcelo, Pastala has found networking with friends, former colleagues, and people engaged in similar enterprises essential. Close friend Sophie Moochhala ’90, a former Coca Cola India executive, and her sister Niloufer Moochhala ’94, a graphic designer (nymdesign.com), have provided UTMT with business-planning and Web-site-development services. Two fair-trade and micro-finance mentors and former colleagues have offered strategic planning assistance, and HoneyCare Africa—a trading company in Kenya with a vision similar to UTMT’s—offers online mentoring support.
“I have always believed that you need to knock on the door,” says Pastala. “The least the person who opens it will say is ‘no.’”
A Helping Profession
Deborah Pergament ’91 isn’t one to take “no” for an answer. Managing partner of the Children’s Law Group in Chicago (www.childrenslawgroup.com), she represents disabled children and their parents who are fighting for mandated services in the school system, gay and lesbian adoptive families, private therapeutic schools, and delinquency and foster-care clients. She and her partners prefer dispute resolution, but if she needs to go to court to do what’s right, she does—such as pressing the state to pay for the residential schooling of a deaf child who was denied appropriate services in the public school system.
Daughter of a psychologist and medical geneticist, Pergament is a proponent of the law as a helping profession. About 30 percent of her firm’s cases involve indigent or low-income clients, who are represented at greatly reduced fees. For example, she currently is charging a low-income client $100 a month for legal services that would normally cost $25,000—and she will speak to any parents’ group free of charge. Yes, people “who cried poor, but had more assets than you and I will ever have” have taken advantage of her, but she is adamant about her practice appreciating the needs of people first, especially children.
Currently in the process of moving the office to slightly nicer quarters, Pergament underscores that her priority is not marble on the floor but a playroom, and changing tables in the bathrooms. “I do well, but I work hard at it,” says Pergament, who first studied to be a librarian and then earned her law degree from Case Western Reserve University.
Most Corporate Hearts Have a Way to Go
It was Benjamin Franklin, an early hardworking entrepreneur inclined toward civic responsibility, who coined the phrase, “do well by doing good.” Today’s socially responsible companies recognize that building a successful, sustainable business means including an array of stakeholders in a conversation about accountability, environmental issues, ethical suppliers, and quality of life and opportunity for workers, as well as respect for the communities in which they operate.
While more and more companies are coming into the fold, sustainability in corporate America is still the tail of the dog. Davida Steinberg ’01 is interested in helping a company integrate socially responsible practices throughout its strategy, operations, and management. But despite a shiny new master’s in business degree from Emory University, she is having a hard time finding work.
Many corporations have bought into the movement, thanks in part to stringent environmental and labor regulations in Europe, but they are not hiring more people to do the work, says Steinberg. Also, “There are many people like me, so supply and demand is making it tough to find work and easier to lower the wage scale,” she notes from her home in Washington, D.C.
Three Internet sites have been of particular help and support as she looks: www.sustainableindustries.com, www.greenbiz.com, and www.cswire.com have job sites as well as resource information for the sustainable business model. She remains hopeful. “I’m an optimist. I think things will work out. If [others] can do well by doing good, I’d like to be part of that, too.”
photo illustration by James Baker
