Welcome to the Christianity and Business Podcast with host Darren Scheer, an initiative of the RGW Dunham College of Business at Houston Baptist University. This is the show that helps Christian business leaders to integrate biblical values into business. You can get more information about HBU Center for Christianity and Business and sign up to receive free access to all features of the Christian Business Review Journal by visiting our website at Christianityandbusiness.com.
SPEAKER_02On this episode, we're joined by Joanne Flett. Joanne is a senior lecturer in management and directs the MBA and Social Impact at Eastern University in Philadelphia. Actually, it's just a block from Independence Hall, pretty amazing location. And she was recently awarded a 2019 and 2020 Fulbright Scholarship, extremely prestigious, to the University of the West Indies, Trinidad and Tobago for teaching and developing social entrepreneurial capacity. And uh, Joanne, you'll be fascinated to know that of the seven groomsmen I had in my wedding, two of them were trinees. So pretty uh statistically amazing.
SPEAKER_00Yes.
SPEAKER_02Um Joanne serves on the board of several high-impact social organizations that include Accord Network, Capital of Good, and Broad Street Ministry. Uh, Joanne, welcome to the Christianity and Business Podcast.
SPEAKER_00Thank you, Darren, for having me. It's a delight to be here.
SPEAKER_02So we want to hear about this concept of a social impact company. What is a social impact company?
SPEAKER_00That's a great question. So the social impact company is a company that pursues in so many ways a triple bottom line. In some instances, folks, Christian folks consider it a quadruple bottom line. But they they don't see just financial returns. They actually pursue social returns in a world where so much of our lives as we look around society, we recognize that there are social issues to be addressed, and business sits at the nexus of being able to address those. And so these companies are in so many ways being born social. They're in they're envisioning a market solution to address a social issue. So those are the social impact companies.
SPEAKER_02Yeah. And I like how you say people, planet, and profit.
SPEAKER_00Yeah.
SPEAKER_02So at what point should someone just start a donor-funded nonprofit to achieve these uh social objectives? Because I hear this objection quite often, you know, what that from investors they don't want to invest in a charity, something that sounds like a charity. Like at what point should someone and how do you kind of distinguish between a donor-funded nonprofit versus a social impact company?
SPEAKER_00That's a great question. So there'll always be room for the nonpro nonprofits, right? Um nonprofits act on the charity model. Um, so you know, you're you're gonna just have this pure charity model. But, you know, business is actually part of the solution to social issues. And if you're going to be sustainable and go after solving a particular social issue, whether that's anti-human trafficking, you're gonna always be beholden to your donors, right? It as long as your donors are okay with that particular social issue that you're pursuing, you'll have money. But should the appetite for your donor change towards something perhaps from anti-human trafficking to climate or whatever other social issue is pressing on their minds, there go your entire revenue stream. So the the real identity of going towards a social impact company is to be able to have some level of sustainability. And also a lot of these social issues can be solved with a bit of innovation around the business model. Michael Porter, the Harvard Business School professor, likes to say in this way, business is creating shared value. Business has always been a part or seen as being a part of the problem. In this era, it can now be seen as part of the solution. And so social impact companies are actually taking that charge and that mandate pretty seriously to be a part of the solution.
SPEAKER_02Yeah. And I so, and to be clear for our listeners, you know, nonprofit doesn't necessarily mean donor-funded. It could mean that you have you're selling products and services, it's just what hat what do you do with then with the profits? Um, do you do you find that some are uh nonprofits and some are for-profits? And because that's really just kind of a tax uh implication, right?
SPEAKER_00Right. Uh and you're right. So when we've when we've looked at the the whole, if you would, span of things from for-profit to nonprofits to government, usually when you're talking about social issues, you go to the nonprofit sector or to government. There's this beautiful chart that was done in 2013, and I'm sure the numbers are even more radical today, where the nonprofit sector generates about 1.2 trillion, the government about 2.1 trillion, and corporations about 20.1 trillion. And that graph tells us that if we're only ever going to alleviate or look at social issues and relegate it to government or nonprofits, that the corporation actually, in that picture, the corporation has a larger share of responsibility. Uh and and and it's been termed social responsibility, but all too often those are seen as window dressing or greenwashing or something to get consumers to feel good about the company. That doesn't mean that companies aren't doing their CSR with due diligence, but it just means that there's not an external standard until now for having companies talk about what they're doing in the social space.
SPEAKER_02Yeah. Do you find that a lot of companies are kind of taking this approach really just kind of as a marketing gimmick? Or like how do you kind of uh distinguish between a truly authentic social impact company versus we're just, you know, every other um niche is taken in this market. So let's figure out a way to differentiate ourselves by doing a one-for-one or something like that.
SPEAKER_00Yeah. No, you're you're right. So on some level, it's driving businesses to be more innovative. So that the one-for-one models, uh, the certain percentage of profits going into uh charitable work. But the real kind of game changer in this landscape is the B Lab group, the certified B corporations that are independently certified. And so they they you're not just depending on good marketing, they actually put you through 200 a questionnaire that's about 200 metrics and measurements to determine if you're actually creating value for your customer, for your employee, for your community, uh, for you, you know, if you're being good to the environment. And these are externally certified, audited by the B Lab group. And and a company has to score 80 points or more in order to be certified. And that's actually that sounds pretty easy, 80 out of 200. But uh trust me, for a number of the companies that I have talked to over the years, uh it is not as easy as that. And it's really rigorous, and it allows an independent body to certify that that company is doing good work. So they're not just self-reporting, hey, look at us and doing our CSR. They're actually able to allow a third party to come in and actually ask them questions and drill down as to, in fact, if they're actually doing what they purport to be doing.
SPEAKER_02Yeah. So of the companies that have made the cut and you've researched many of them, what would be uh one of the shining examples that that comes to the top of your mind as an example of a social impact company?
SPEAKER_00There are several of them, and and they're so innovative. Um, so of course, Ben and Jerry's is is one that everyone knows, right? So Ben and Jerry's uh, even for an ice cream company, created measurements and metrics about who they employed, what sort of ingredients they used, and various things like that. Um so they're really famous for that. Graystone Bakery is another one. They um they they had open hiring policy before that was a thing. So they were hiring returning citizens and allowing them to actually be progressive in in terms of having employment and getting an education and advancing up and through. Um, there's a company here in Philadelphia that's called Home Care Associates, and they do home care aids, uh, which is like, you know, fairly minimum wage type work, and yet they have been amazing to be an employee-owned company. They're a certified B Corp for profit, but they're an employee-owned company, so that those folks who work for minimum wage actually get to share in the profits for the company. I've been so impressed with them. In in many instances, uh they they they discovered ways in which they could enhance their employees' um well-being. One one, for example, is they discovered that some of their employees weren't eligible to have short-term loans, like banks didn't see them as a credible risk. And so they brought in and worked with a bank. So if an employee had been working with them for 10 years, they could get small $500 loans for next to nothing, and then there'd be uh a payout from their paychecks to repay the loan, and then once they repaid the loan, it automatically started into a savings. So it's like it's an amazing incentive for employees to not run out to an exorbitant moneylender, also to build to continue to build trust within their organization and then actually to create a savings account because some of them are unbanked or underbanked in that population. So it was really kind of an innovative way of caring for their employees.
SPEAKER_02Yeah, I love that. Are you finding that, and this is probably a hard percentage to nail down, but it what percentage of these social impact companies, let's say in the US, are Christian-led companies?
SPEAKER_00That's a that's a million-dollar question. I I I think people of faith are drawn to doing social impact. And even if they're inside the B Corp movement, right, the certified B Corp, uh, I've found quite a few who are running those organizations who are people of faith. Um because they they care when they create a company, and mind you, a lot of those companies are still privately held companies, but when an entrepreneur creates a company, even if they're scaling to 50, 60, 80 million, they want to infuse their values into it. Um and and and those faith-based values relate around what they pay their employee, what kinds of wages they take home themselves, what how they care for their community and the environment. I mean, all of these things are part of who the person is, and it's getting baked into the DNA of the companies. And so, yeah, it's it's interesting to find that within this the small sample size of 20 that I interviewed, a a great number, I would say about 15 of them were people of faith.
SPEAKER_02Yeah. Wow.
SPEAKER_00But it wasn't it wasn't an explicit question for me. It's just it came up in the course of conversation.
SPEAKER_02Yeah. Well, I'm sure in the days ahead we'll the the research will start to get a little more crystal clear so we can um because I think the market is get it more and more wants to know what are your values, uh, what are your religious values, what are your political values. Uh, what what are companies risking by not taking this approach in today's marketplace of being a social impact company?
SPEAKER_00Yeah, I think they're risking a lot. Um, I think we have a demographic shift underway with the millennials who care about a lot of social issues. And so if you're going to attract people to work in your company, um significantly, if you're a social impact company, you're going to be able to attract more capital. My small batch of research definitely shows that people are selecting uh social impact companies over and against any other company. I'll give you a case in point. My oldest son, Miles, had a choice between a top-rate consulting firm and a sustainable chocolates company. Top rate consulting firm would have paid him a bit more, about $10,000 more out of college. He went with the Sustainable Chocolates Company, right? He living into that whole millennial piece where he wants to see not just that he's going to work, but that his work makes a difference. That's a value to him. It's a value to the millennials. So there's the employee demographic, there's the consumer demographic that's waking up to, my goodness, I want to make sure that what my purchases are ethical, they're ethically sourced, that no child labor went into this product, or I want to make sure that it's good for the environment, or it didn't harm animals, or any number of things. So all of these are becoming important to consumers. Even on the impact investing side, you know, what used to be just like a little trickle is starting to become a larger area of conversation over the last five years. And the next thing that's happening is that there's a shifting demographic within the foundations. Family foundations and larger foundations are moving from the boomer generation and almost skipping kind of the Gen X generation and going into the millennials. And they want to see not just that their charitable dollars are going to do something valuable, but that they actually want to create value as well. So they don't just want to like give charity, but they want to see a return on that investment as well. So there are demographic shifts all around.
SPEAKER_02Yeah. Well, anyone running a company listening to this is feeling very vulnerable right now, you know, kind of feeling a little bit under the microscope. Myself included, I run a book publishing company called Hybridge Books. So let me just kind of put myself under the microscope here. How can I make sure that my company is a social impact company? We'll just do a little uh little thought experiment here.
SPEAKER_00Yeah, the one thing I would point you to is um you you're you're going to have to figure out what kind of social impact you want to create. And one really great way to do that is B Lab actually has what they call the quick B assessment. And so if you go on to bcorporation.net and do quick BIA business impact assessment, you will have it'll put you through a small battery of questions and you can have an idea of what sort of things you're you're looking at. But for instance, are you good for your, you know, if you have employees, are you paying them a fair and living wage? Uh are you trying to recycle products and be kind of progressive on that end, caring for the environment? Um what do you do in terms of your community? Is your community a better place because you have a business somewhere in there? You're benefiting from all the externalities of that community. Are you also then in return giving back to that community? And so those are types of questions you want to ask. Even if you're a sole proprietor. Sole proprietors, uh, you know, one of the persons in the B Corp movement that I interviewed was a sole proprietor, and he talked about using his art to build awareness of what's happening in the environment and use it to message certain things, right? So, yeah, there's a whole bunch of ways in which you can create social impact either around the environment, any social issue you care about, and direct your businesses to your business activity towards that. So, yeah, how would how do you stack up, Darren?
SPEAKER_02Well, I I mean I I definitely um I could give a response to each of those, but I think there's a lot of room for improvement uh for sure. To be a lot of it just comes down to intentionality. I could say, you know, indirectly some of these things are happening, but um to to truly I I would think that to become a B Corp, but there's gotta be some metrics in place to where you're actually tracking these things to see, because otherwise you could say, well, I'm I'm a good person. I didn't uh we didn't cheat anybody. We try to give fair prices and pay fair wages, things like that. But uh it sounds like to become a B Corp, I mean, this is kind of the next level of of intentionality required, right?
SPEAKER_00Yeah, it is. And not only that, one of the interesting things is the folks within the B Corp, at least the ones that I've been interviewing, they actually they actually self-compete. They literally try to best their score. They're recertified every three years and areas in which they need to perform. And if it's a smaller company, a seven-person company, they'll get together and say, hey, let's pick some uh element of the B Corp metric measurement that we want to excel on. So they're actually kind of um yeah, self-competing and not even within industry, just for themselves to be better at what they're doing.
SPEAKER_02So that's what gets me thinking about you know, things like um publishing companies, like we we spend a lot on printing. Yeah, that's a lot of paper, that's a lot of trees. Um, you know, thinking about how this could be tied in with literacy. I mean, we're we've got this glut of books in the US market, and yet there are places where people can't even read. Um, you know, and what can we what can we do about that? That those are some of the things that are that are coming to mind um in light of this conversation. I hope our listeners are also thinking about some of the things that they could be doing to start to get more intentional. I think a good action item would be, as you said, to go to quickbi is quickbia.org, is that right?
SPEAKER_00Yeah, I'll I'll find it here and we can I'll I'll make sure I have the right thing.
SPEAKER_02Yeah, to go take that assessment.
SPEAKER_00It's bcorporation.net and then type in quick imp quick impact.
SPEAKER_02Okay. Okay, good. Well, what's different about so Eastern University? You are as as you explained, the steward of the MBA and social impact program there. Um, what is what is unique about this program?
SPEAKER_00This program is unique because it's been in the landscape for about 34 years. Uh, it's just recently been renamed. Prior iteration of it was called the MBA and Economic Development. And it was started by the likes of Ron Sider, Rich Christians in an Age of Hunger. Of course, Ron wanted to engage Christians of means to be caring about those on the margins. Um, Tony Campolo, he's written, he's a prolific writer. He's written several books caring about education. And then a guy by the name of Samuel Escobar, who taught at our seminary, and he invited us to kind of think about creating a hermeneutic of economics. And these guys wanted to create a business program that didn't just do the regular stuff, but that would give you the business acumen, but will give you give it to you with a community development aspect and very theologically informed. Um, and so this was 34 years ago. Two years ago, um I had a I had a new dean uh come in and he said, Joanne, what would cut through the noise so that we could get folks in the marketplace to know that Eastern University has such an incredible program? And I we we I said, I actually don't know. I I think it might have something to do with social enterprise, um, but let's have a couple listening years. And so we we listened for a year. We had friends from our B Lab group and friends from a number of the development. Agencies like World Vision and different Hope International and different places come and sit with us and talk with us about what they saw and needed in their in their students. And we renamed it to the MBA and Social Impact. And the idea there is that we want to give folks really good business acumen. We feel like, on so many ways, it's a third sector approach to alleviating poverty. You need the development elements, but you need business as well. So they definitely need to have good business acumen. They need to know good development, community development ways of being, right? So they need to have that skill set very well defined for them. And then the other thing that they need is a theological background that allows them to engage business as God's work in the world. I like to think of it this way: God is relational in God's self. God is a trinity of beings. And we are relational people. And I can think of nothing else more relational than business. I mean, just think of all the different relationships that are in business in terms of the stakeholder model of business. And once you start to take that approach to business, you recognize that God wants to do something in and through business in terms of alleviating poverty and building his kingdom. So I so Eastern has sought to be faithful to all three of those. I describe the ideal student as someone with the head of a business person, the heart of a missionary, and the soul of a development worker. And if if that person is out there, then that's the person who's ideal for this program.
SPEAKER_02Well said. And the best, what's the best place for people to find out more about the program and also to find out uh more, hear more from you and some of your research and writing?
SPEAKER_00Uh, you know, that's a great question. So feel free to email me jflett at eastern.edu, and that's jf isn't frank l-e-t-t at eastern.edu and reference the podcast. Um, I'm quite happy to allow you to carry conversations on there. Also check out Eastern University's MBA and Social Impact. Um, and if you type that in, it should come up with how to get access to looking at the program and seeing who's teaching in our program and what's going on there, kind of looking at the curriculum. It's a fast-moving curriculum. Um, and it's it's it's geared again towards making the development practitioner understand business and engage it at a very high level so that they can actually measure impact and understand the impact investing space. So uh the students were over at my house last night and they're like, you know, uh, this is crazy. Like six, I just feel like I'm drinking from a fire hose, but it's so good. Well, tell all your friends then. Tell all your friends.
SPEAKER_02Good. Well, that's great that your students get to come to the professor's house. That's a neat uh that's a neat experience.
SPEAKER_00Yeah.
SPEAKER_02Um well, Joanne, thank you so much for being so generous with your time and sharing your wisdom with us today and the and for the great work you're doing through this program. And may God continue to bless uh bless your work and uh and your family.
SPEAKER_00Well, thank you, Darren. God bless you and the work you're doing here. So appreciate you. We hope you've enjoyed this episode.
SPEAKER_01And if so, we would greatly appreciate it if you would leave us a quick rating and review for the Christianity and Business podcast on iTunes. You can get more information about HBU Center for Christianity and Business at Christianityandbusiness.com. Thanks for listening, and remember to keep integrating biblical values into your business.