Save The World
Save The World
Most Fortune 500 companies use the
following business model:
Pay as little as possible
to those who produce your product
Pass on the entirety of your profits
to your shareholders
This is essentially a system for collecting small amounts of money from vast numbers of consumers and passing it to exactly those who need more money the least: shareholders in companies. An incredible volume of money is funneled from consumers into large companies and then channeled into the bank accounts of wealthy shareholders so that they can buy additional yachts, sports cars, and private jets. Meanwhile many NGOs and charities struggle every year to maintain their tiny budgets.
Many large corporations engage in well-publicized Corporate Social Responsibility (CSR) campaigns, donating millions of dollars to good causes. Starbucks, for example, donated 15.6 million USD to various charities in 2013. IBM donated on average 200.4 million USD per year from 2011-2013. Wal-Mart, during the same time frame, spent a whopping 851.5 million USD per year. That’s nearly a billion dollars given to charity. And while it’s admirable that for-profit organizations voluntarily help to improve the world, there’s a bit more to the story.
What about the rest of it?
The truth is that corporations spend the overwhelming majority of their profits in a variety of less altruistic ways. Much of it is spent reinvesting in the corporation to increase future profits. This increases the value of shares, so that when shareholders sell their shares, they will earn a profit and become even richer than they already are. A large portion of profits is given to high-level executives as bonuses or additional shares in the company. Some of it may be used to buy back company stock, which generally has the effect of increasing stock prices. Furthermore, the company often buys the stock at inflated prices from executives who had bought it at low prices, in effect filtering money into their pockets. A very large portion of profits is spent lobbying Congress to get profitable laws passed, or is paid to teams of tax lawyers who prevent most taxes from being paid. Simply put, all profits not donated to charity are used either to enrich shareholders and executives or to increase future profits. IBM’s 200.4 million donation seems less impressive when you consider that the other 98.8% of their 16.6 billion USD profits was used in the above activities. Starbucks, similarly, committed only 1.1% of their profits to CSR, while spending 119.3 million on advertising, or 7.6 times what they spent on CSR. It wouldn’t be a stretch to say they spent more money talking about their CSR than they did on the actual CSR itself. Wal-Mart, at #1 in the Fortune 500 in 2013, allocated exactly 5% of their budget to good causes.
They seem to use charity to avoid recognizing the problem,
but we want to do it better.
Malala Coffee is trying something different.
We think that someone needs to break ranks from the other companies and show that actually helping people who need help doesn’t have to be a grudging afterthought, but can be the main point of a company. We are committed to donating, this year and every year, 70% of our profits to good causes.
Of course, we’re currently a tiny company and 70% of our profits doesn’t mean much now. But if you’re going to buy a cup of gourmet coffee from someone, wouldn’t you feel good knowing that 70% of the profits from your cup could be providing education to children in Afghanistan instead of just 1.1%? So yes, our donations now may be small, but with your help, we plan to grow to a monstrous world-spanning corporation, and when that happens, other companies will have to realize that their 1% donations just don’t cut it anymore.
We make a living by what we get,
We make a life by what we give.
We want to serve as an example to all other companies. We don’t want to be the only company that donates this high a percentage.
We would love it if every company followed suit! If the Fortune 500 had given 70% of their profits to help the world out in 2013, they would have spent 756 billion dollars.That’s 146 times the budget of the UN. That’s 865 times the budget of Save the Children. Can you imagine if we had 865 additional organizations like Save the Children in the world? What an amazing dream. Will the Fortune 500 ever actually donate 70% of their profits to benefit the world? All we can say for sure is that it’ll never happen unless someone takes the first step. And for that we need your help.
We believe in you. We know that you want to do the right thing. We know that given a choice between buying a product that enriches those who are already wealthy and a product that can pay for help preserve endangered species, you’ll make the right choice.
We want to do the right thing, and I hope you join us.