Business Model for a Compassionate Project PDF Print E-mail
Written by Ron Anderson   

Three marketing students from Lake Constance, Germany decided to break some rules of business by insisting that they and their customers serve the common good. Their first business partners are incarcerated convicts, who make handbags. The students wrote a marketing plan, help with the distribution of the products, and developed a strategy for channeling the profits back into improved inmate rehabilitation programs. Their story first appeared in German in Spiegel Online on December 27, 2009. An English translation can be found at Fortune 500 Global.

What is most interesting about this student project is that it began with their desire to build a business model that was limited to products that help others in a direct or partly direct way.

I would call these types of projects compassionate because they address a problem of someone's suffering and act to provide solutions. The German students identified with the plight of very limited opportunity for most prisoners to prepare to return to their communities without returning to lives of crime.

So far, their marketing plan has been surprisingly successful. Prison inmates work at a very low rate but are still motivated to do the work because it gives them a small income. The students take a small percentage of the revenue from sales of the handbags to cover their costs and the remainder goes to rehabilitation programs that assist ex-convicts with their post-prison challenges.

The students, spurred by an award for social entrepreneurship, expanded their plan, and gave their marketing activities the name "Spread the Word Agency." Under this nonprofit banner, they hope to develop other business ventures that result in products that help those who need help. Now they are developing marketing plans for sheltered workshops and for one-world shops.

One-world shops promote fair trade, which helps sell the products of people in the poorest nations at a price high enough to make it possible for them to surmount the forces of poverty and other suffering. These shops often rely on donations, but the students' marketing plans move them in the direction of wider markets, which makes the shop more self-sustainable.

Not surprisingly, the students have met opposition to their plans. The most common complaint about the prison project is that their work may "reward offenders for criminal behavior." Spread the Word responds that the inmates only earn a tiny fraction of a normal wage, and some of them learn a new job skill.

In earlier decades, calls for businesses to act for the common good were more common. Even now, many small businesses in the small community "main street" generously support the common good. However, the big banks of "Wall Street" appear to have reverted to the opposite extreme where the common good is supported only as a public relations gimmick. The business mantra of the day seems to be "Care not for anyone else but me and my inner circle."

The generation of young-adults, like these three German students, hopefully will steer business back on a course that sustains societies rather than makes them more vulnerable. Imagine a society where business owners valued compassionate action nearly as much as income growth and stock holders valued corporate social responsibility as much as investment returns. This may only be a dream now, but it may be the only way that in 2050 a global society of nine billion people can manage a sustainable society.


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