Accounting fraud, burst financial bubbles, and the callous treatment of the natural environment only represent a few of the dismal business headlines of the past quarter century. It’s no wonder that employee morale and public trust in business have reportedly hit all time lows.

Refreshingly, however, many organizations are redirecting their businesses to serve higher purposes; they are creating economic opportunities for the poorest citizens of the globe. Because of its unique ability to create wealth and operate in an economically sustainable manner, business is an important institution in addressing serious global problems, such as poverty.

During a recent conference on the role of business in ending poverty (“Bottom Billions: The Role of Business in Ending Global Poverty” ) held at Seattle Pacific University, we came across many organizations that intentionally and creatively use commerce to serve the economically impoverished. These organizations operate far from the old model of “earn as much as you can on the business side and then give away money and goods as a separate, charitable endeavor.” Instead, many businesses pursue multiple bottom lines (i.e., economic, social, spiritual goals) all at once. Here are a few of the organizations that presented at the conference.

Krochet Kids is an organization started by three college students who wanted to improve the plight of unemployed women in war-torn Northern Uganda. CEO Kohl Crecilius shared that although they were unsure how exactly to help, they decided to pass along the one skill they had in common: crocheting hats. The group set up a project to train a group of women in Northern Uganda to crochet hats. Today, about 100 women are employed producing high quality, stylish headwear geared toward outdoor winter sports enthusiasts. Their products are sold through high-end retailers like Nordstrom. Krochet Kids also partners with leading apparel manufacturers such as Volcom, and are about to begin a new project in Peru. In 2010, Krochet Kids sold 30,000 units and surpassed $500k in sales revenue. They project to sell 100,000 units with over $1m in sales revenue for 2011.  Although technically a non-profit, Krochet Kids uses an “earned income model” allowing the organization to be far less dependent on donations than traditional NGO’s; only 26% of their total income for 2010 came from donations.

Another outstanding example is The Paradigm Project, a “hybrid” organization incorporated as a L3C (low-profit limited liability corporation), that sells highly efficient, low cost stoves in Kenya. The stoves provide economic, environmental, and health benefits (cleaner indoor air) to users. The revenue model is a combination of units sold at below cost to customers and the sales of certified carbon credits on the voluntary market for offsets. The carbon credits allow a small profit to be made, making it a sustainable model of achieving multiple bottom lines at once. The Paradigm Project is set to expand its work into neighboring countries.

Though its services are not nearly as “flashy” as the first two, the final example demonstrates how a small business based in the heartland of America can address global issues. General Manager Wade Gray was such an unassuming presence at the conference we could have easily overlooked him. Wade runs a small enterprise called ECO7, a janitorial business based out of Oklahoma City that not only uses organic cleaning products (he says he was once a skeptic until realizing the negative health impact of typically used chemicals on workers), but also purposefully seeks to employ refugees from the developing world.Eco7 endeavors to offer employees good wages and benefits while helping develop transitional skills such as English language improvement.  Long term, Gray and his partners envision helping these employees become owners of their own businesses through franchising arrangements.

While these types of emerging enterprises are inspiring, we recognize that they are small in scale and represent only one way in which business can have an impact. MNCs (“big business”) also need to be active partners. It is very encouraging that executives from Adidas, Costco, Microsoft, and Phillips Healthcare were also present at the conference. Many large corporations like these are becoming increasingly active in the BOP (“Base of the Pyramid”) business space as they see profitable opportunities to serve by selling products to and creating employment opportunities for the world’s poorest 4 billion citizens, a previously overlooked “market.”

There certainly are tensions caused by profit seeking enterprises operating in poor areas of the world.  Good intentions are not enough. Careful attention must be paid to sound ethics and definitions of “development” that transcend economic gains alone. No single sector can end poverty on its own, including business. Many governments and NGO’s are already playing critical roles. Given the influence of business and the need to reclaim its legitimacy, however, this is an opportune time for business to act as a key player in alleviating poverty. The world needs the wealth creation, knowledge transfer, and ability to scale that businesses excel at.

1. What are some ways that your business can pursue multiple bottom lines and serve a higher purpose?
2. How do you live in the tension between pursuing profit and social goods?

Editor's Note: The image above was found here.

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