There is a whole movement of social entrepreneurship now where people are using a market-based approach to help make significant change in the world, sometimes addressing the most intractable or desperate problems. Instead of creating change through volunteering or political action, these are enterprises with social programs as a core part of their business plan. It is kind of like building a charitable program with the funding source built in. This is significantly different from a for-profit business like Toyota, whose business is to sell cars, partnering in a social cause effort (sometimes called cause marketing).

One of the most famous, and financially successful of these philanthropic entrepreneurs is Jonathan Greenblatt, who worked on the X Prize and helped found Ethos Water. He has gone on to publish Good Magazine, which combines entertainment with social change and makes charitable donations as part of its business plan. You can check him out in an interview on the wonderful National Public Radio program Speaking of Faith. Ethos Water has grown so big it is now competing with some of the big bottled water producers. A portion of the income from every bottle purchased goes toward humanitarian water programs around the world. The X Prize Foundation gives large cash prizes to teams that look to achieve things like sending a robot to the moon, producing a super-efficient car, and finding ways to use personal genetic information to prevent disease. Their method inspires people to put millions of their own dollars into the development of these products, which multiplies the benefits gained. Greenblatt says that he now is working with the X Prize Foundation on using the model to address persistent poverty.

Is this generosity or is this just smart business – appealing to the altruism of its customers so it can make them feel good about consuming and sell more products? When people are financially successful and things grow to a larger scale this basic question gets harder and harder to answer. After all they are marketing to us to fund programs for people who do not have what we have. The entrepreneurs get a viable business and compensation for their work, we pay for a product and get it – along with the knowledge we are helping a worthy effort, and the beneficiaries get something they need: a win-win-win situation. However, the opportunity for personal gain at the expense of others, or the original values of the enterprise, must be rife.

One company I find charming in its directness and ebullience is Tom’s Shoes, started by Blake Mycoskie. Tom’s produces simple espadrille type shoes that are commonly warn in Argentina (called alpargatas). These are available in all type of fabrics, colors and patterns. For every pair of shoes you buy, Tom’s gives a pair of shoes to a needy person or child. Those people get the same basic shoe you do. Since 2006, they have given away 85,000 shoes in Argentina and South Africa. Having shoes to wear can fight significant health problems from cuts and infections in the developing world, where people often have to walk long distances to get water and other supplies. Tom’s also engages high school and college kids in a program to distribute the shoes (called a Shoe Drop) and to travel around the country talking to their peers about issues of poverty and promoting social entrepreneurship, and of course Tom’s Shoes.  From their web site, the whole enterprise looks like it is fueled by joy, which is not surprising given the benefits they are distributing. And I love that the consumer uses the same product as the beneficiaries. That connection emphasizes that we all have the same basic needs and just how small the world is now.

One of the definitions of generosity is: freely giving more than is necessary or expected. It certainly seems like these companies are doing that. Is bears watching what freely means to them as they grow and prosper.