Merging corporate social responsibility and philanthropy

Stories resonate across geography and culture, so Philip Cochran took a lot of stories with him last month during a two-week, five-city jaunt across China.

Cochran, the executive associate dean of Indiana University’s Kelley School of Business in Indianapolis, was in China to talk about corporate social responsibility and philanthropy. He’s director of the Randall L. Tobias Center for Leadership Excellence and holds the Thomas W. Binford Chair of Corporate Citizenship with the center.

To the audiences in China, though, he was an expert who told stories that connected several strands of contemporary thought regarding a corporation’s responsibility to society and how those companies and individuals conduct philanthropy.

The fields “are changing dramatically, primarily the adoption of a business model for social responsibility by corporations and how individuals conduct philanthropy,” Cochran said shortly after returning from China.

“Historically, corporations or individuals would give money to a charity and then step back from it,” he said. “Today, they are much more involved in how that money is spent.”

Cochran traveled from Beijing to Dalian, Chengdu and Guangzhou before departing from Shanghai to help interested Chinese philanthropists and others better understand “how this is happening everywhere in the world.”

Essentially, the business disruptions we’ve seen in so many sectors — from bookstores to booking rooms at a bed-and-breakfast — are erupting in the social services realm. Blending corporate social responsibility and philanthropy results in companies built to solve problems through business.

Cochran can cut through this gobbledygook with a single story, although he has many. It’s a story about bringing light to the 2 billion people who live outside reliable electrical systems. It’s a story about two Stanford University graduates who figured out how to replace relatively unsafe kerosene lanterns with solar-powered lights. It’s the story of d.light, a company that has brightened the lives of 50 million people in places such as Africa and India. Its goal is to reach 100 million by 2020.

People who use kerosene lamps have to pay for the fuel and suffer the side-effects of the pollution they create — not to mention the danger of getting burned. For about the same money it costs for a year’s worth of fuel, d.light has developed a lamp that’s 10 times brighter than the kerosene version and uses the sun to recharge batteries that power LEDs. It even has a USB port to charge the cellphones that provide connections for these folks to the wider world.

The company’s purpose is to serve this market, and its affordable and reliable products have been so successful that it is moving into developing gridlike electrical systems described as an African solar revolution.

“And this is just one snapshot of what is going on around the world,” Cochran said.

A lot of people in China — from undergraduates to entrepreneurs and powerful philanthropists — were “intrigued by these ideas,” Cochran said. They seemed to grasp quickly the difference between giving a charity $1 million to buy and distribute lamps to creating a company that can sell $1 million worth of lamps and then continue to build more and better systems over time.

“You just recycle the investment over and over again,” Cochran said. “The advances we’ve seen over the last five to six years are just blowing me away.”

That’s saying something, considering that Cochran has spent 35 years steeped in the worlds of corporate social responsibility and philanthropy. And none of this should be seen as any kind of slight to other methods for providing charity or conducting philanthropy. As an academic, Cochran works to better understand his subject so he can then tell stories to those who’ll move the field forward in whatever form it takes.

But when I expressed surprise that he found such a receptive audience in China, Cochran reminded me the country had a long history of market-oriented activity before the Communist Revolution. “It’s much more market oriented than even some of the eastern European countries that didn’t have similar market structures before,” he said.

“A lot of what’s happening is a growing realization that businesses can pursue both business and philanthropy and create the so-called double bottom line,” Cochran said. “When I talked about it in China, I was getting less resistance to the idea than I do in the U.S.”

This is the emergence of benefit corporations, such as d.light, which are not organized to maximize profits for shareholders. Although many companies engage in philanthropy with a portion of their profit, the point of benefit corporations is to use the profit to conduct philanthropy.

“This is a model that really appeals to millennials, a lot of people in their 20s,” Cochran said. “It’s really speaking to them.”

The trip through China left Cochran impressed with the re-emerging culture and reaffirmed his belief that it is destined to play an important role in the world’s economy. “A market economy is a win-win economy,” Cochran said. “As it grows and matures, it will not only help them, it will help us.”

Mutual interest is a powerful thing, and if we’re all in the same market economy, there’s less incentive to screw it up with war or other disruptions. Stories, as Cochran knows, are powerful, too, and he’s convinced China will provide a lot of stories he’ll be able to use over the next decade or two.

-INDYSTAR