The Richest Man in the World

Andy grew up in the mid-19th century in Dunfermline, the centre of the Scottish linen industry—an industry dominated by a few very wealthy employers, and a great many very poor weavers.

The craft of weaving was a dying trade: The industrial revolution and its steam-powered looms had Andy, his father and his uncle raging against the tyranny of economic inequality. Hundreds of weavers were made redundant, and Andy would later talk of his shame as he watched his father beg for work. “Then and there came the resolve that I would cure that when I got to be a man,” promised young Andy. He could never stand to see people robbed of their dignity, unable to look after their families.

Desparate times called for radical solutions. Within months, with a borrowed 20 pounds, Andy and his family set sail for America, eventually settling in Pittsburgh, where Andy’s father went to work in a cotton factory.

Andy himself began his career with the Keystone Bridge Company, but soon founded his own business. He worked very hard, and earned a good living, but he was soon feeling the stress and strain of the entrepreneur’s life: While he remained committed to defending the rights of laborers, he was also forced to defend his business. Epic periods of strife—battles between the unions and his company—would haunt Andy for the rest of his years.

In 1900, when Andy turned 65, a new competitor to Andy’s thriving steel-making business was ready to enter the market. Andy was confident he could stave off the new upstart, but he was ready to retire. So he chose instead to sell his company to his new nemesis. “Congratulations,” said JP Morgan’s letter to Andrew Carnegie. “You are now the richest man in the world.”

Unbridled wealth. Unparalleled generosity.

By the time he sold it, Carnegie’s company was making more steel each year than all of Great Britain. The selling price of $480 million would be equivalent to just less than $300 billion today, eclipsing the wealth of modern day heroes of business like Bill Gates and Warren Buffett. But money isn’t all the three had in common: They all also committed to giving most of their fortunes away.

Before the end of his life, Andrew Carnegie gave away more than $350 million.

But Carnegie hated charity. Instead of merely handing out cheques, Carnegie invested in public works. His early exposure to the plight of the unskilled worker drove him to fund education, which he viewed as the surest route to liberation from the shackles of poverty—an interesting sentiment for a self-made entrepreneur. Most of his fortune transformed into 2,500 libraries; much of the rest went to support many colleges and universities.

Carnegie was visionary for his time, and he is now recognized as a pioneer of sustainable investment—a form of philanthropy that applies the fundamentals of business to important and diverse issues around the world. In fact, as the trend toward sustainable business continues (and it is continuing, despite the gloom of recessionary times) leading organizations are wedding the needs of their businesses to the social needs of the communities in which they work.

Grameen Bank of Bangladesh is perhaps the best example. Grameen takes no collateral on loans, despite its focus on lending to “the poorest of the poor.” Since inception in the 1970s, the Bank has made a profit in all but three years. It and its founder, Professor Muhammad Yunus, were awarded the 2006 Nobel Peace Prize for “efforts to create economic and social development from below.” A profitable business, and a vital engine for social improvement.

Canada’s Tim Hortons provides funds to youth soccer and hockey programs through their Timbits program. It’s a marketing win-win: The youth programs get vital funding, and Tim Horton’s builds goodwill and loyalty. Locally in Vancouver, Vancity‘s support for social ventures and Mountain Equipment Coop‘s 1% For The Planet program are great examples of socially responsible investments that also deliver real marketing value, and benefits to the fiscal bottom line.

So what’s the opportunity in corporate social engagement for your organization?

These kinds of engagement programs create the win-win of building goodwill for your business, while also doing some real good in the community. There are three characteristics that seem to make these initiatives work:

  1. Matching audiences: Tim Horton’s would like to sell post-game donuts to tens of thousands of youth soccer players every Saturday afternoon.
  2. Matching markets: Vancity’s social mission is focused largely in Vancouver’s downtown eastside, the poorest neighbourhood in Canada, and the meeting point of a number of high profile issues that are known to Vancity’s regional target market.
  3. Matching profiles: Social / business alliances work best as partnerships. And partnerships are most effective and enduring when forged between like-sized organizations.

Lastly, well-crafted engagement strategies build value that’s clearly greater than the sum of their parts. Their contribution both to financial and social bottom lines make them a remarkable engine both for marketing and for social change.

Is there a social mission that aligns with your organization’s profit mission? Can you see an opportunity to build value, while doing good?

Guest Post written by Mike Rowlands of Octopus Strategies.