Doing good, making bank

Some companies, rather than cutting checks, are building philanthropic work into their business models.

In the bright blue waters of the North Atlantic Ocean, Jeff Cresswell, brand steward and co-owner of Klean Kanteen, had the chance to take what he knew about single-use plastics — which had motivated the creation of the Klean Kanteen — off the pages of the reading and research he’d done. He had boarded a ship with 5 Gyres, an ocean health organization dedicated to studying and reducing the presence of plastic in our oceans.

“Right off the Bermuda coast, the water is amazing — it’s very, very pristine, crystal-clear blue water, but if you take a closer look at what’s floating on the surface, when you take that [plastic-collecting] trawl out of the water and you look to see what you’ve captured, it’s amazing to see how many bits of plastic you’ve captured,” he said.

Getting on the boat and sailing through one of the ocean’s gyres, where plastic waste collects, Cresswell built a deeper relationship with 5 Gyres, for which Klean Kanteen is a sponsor. “The storytelling that is developed through these relationships … that really has helped create our brand and highlight the brand. I think that’s helped capture some of those consumers that are looking to support companies that have deeper meaning than just selling stuff.”

Maybe not everyone is willing to crew a sailboat with round-the-clock shifts to count plastic debris, but a lot of outdoor-focused companies are looking to do more than “sell stuff.” Those companies have started to immerse themselves more deeply into environmental and social efforts. Some have made tremendous financial commitments to increase opportunities to recreate outdoors, protect the environment and raise the next generation of outdoor enthusiasts. Those include Clif Bar Family Foundation, which provides grants to grassroots groups working to create a healthier population and planet, and the SmartWool Advocacy Fund, which supports organizations that create opportunities for kids under 18 to participate in outdoor recreation. Some companies, rather than cutting checks, are building philanthropic work into their business models or making it an integral component of their organizations. The benefits are multifold: increasing market presence and visibility among customers, allowing smaller companies to make a big difference and envisioning a world in which business becomes an agent for change.

For one of the early adopters of this practice of adding a component that worked to protect the environment to the business model, the answer has been to do anything and everything possible to advance that cause, particularly as a leader for change in how we buy and sell things. Patagonia was among the first B Corp-certified businesses (benefit corporations — their values now added to their legal charter) in California and founder Yvon Chouinard became co-founder of 1 Percent for the Planet, a now-worldwide organization that puts a name to his practice of annual donations to support grassroots sustainability work.

“We’ve been doing this for 40 years, so it’s sort of part of our DNA,” said Rose Marcario, Patagonia’s new CEO, who added that title to president and CEO of Patagonia Works, which oversees the $20 Million & Change internal fund that supports like-minded startup companies looking to initiate positive change. Patagonia gave close to $750,000 to the campaign to oppose the Keystone XL Pipeline, and Patagonia has provided $50 million of 1 Percent for the Planet’s $100 million in giving reached this year.

“Funding at the grassroots level is integral to our business, it’s part of our mission, but I think you’ve got to do that and you’ve got to be a responsible business,” Marcario said. “To me, it feels like those things all work together to have the greatest impact.”

Patagonia has broadened outreach efforts to five areas: clothing, food, water, energy and waste. With that, it has added an impressive list of undertakings that use the way it does business to address issues ranging from fair wages for garment workers to reducing waste by encouraging consumers to buy less and then resell or recycle used products, to animal welfare by pledging to shift to 100 percent non-live-plucked and non-force-fed traceable down. At Patagonia, you not only can buy a jacket to keep you warm while fishing on the coast, you can buy a fishing rod, a film about the health of American rivers and fisheries, and salmon to snack on — it’s the full package.

“We have 40 years of experience really digging into the supply chain at a level I think most companies fear to tread, and we’ve been doing the same thing sort of product by product,” Marcario said.

She mentions the Worn Wear initiatives, which resells used clothing through EBay, and a new wetsuit made using plant-based material (a material the company’s actively trying to get competitors to use), commitment to using traceable down (“I love that initiative; I think it really speaks to who we are in terms of a very high level of transparency in our supply chain,” Marcario said), the Fair Trade-certified clothing line that debuted this spring with 10 styles and is expected to expand next year, and a new website that allows customers to review not just pricing and sizing but the social and environmental footprint of the products they’re shopping.

“I’m really excited about the way we’re thinking about what it means to be a consumer and developing alternative systems to that,” she said.

Smaller companies also have found that they increase their bang for their buck, getting more out of what they can afford to contribute, by undertaking outreach work themselves, instead of farming it out to a third-party nonprofit.

With the launch of Philadelphia-based United By Blue, co-founders Brian Linton and Mike Cangi walked away from a charitable model that meant donating 5 percent of proceeds to nonprofits and, like Cresswell, decided to get their hands a little dirty doing the work they supported.

“We wanted to create something that was a little bit more tangible because as a small company, donating 5 percent of proceeds is not a ton of money,” Cangi, said. “It’s hard to know what kind of impact that money is really having.” United by Blue now measures pound for pound the results of their work. Teams of volunteers, which often include their staff and staff from their retailers, collect garbage from near waterways, bag it and weigh it on an industrial scale. Four years in, they’ve done cleanups in 21 states, picking up more than 171,435 pounds of trash — and stocked their products in 350 stores and opened a flagship store in Philadelphia. The make a pound-per-product promise — for every product sold, they pick up a pound of trash. The scales are kept even by maintaining the number of pounds of garbage picked up ahead of sales, giving United by Blue a buffer of tens of thousands of more pounds of trash picked up compared to products sold. The project involves the entire staff, and store employees regularly participate in the monthly cleanups organized near Philadelphia.

“There’s kind of a tie-in and crossover throughout the entire company and it allows us to essentially with less, do more,” Cangi said. United by Blue even organized a clean-up during Outdoor Retailer, Thursday, Aug. 7, at 6 p.m. on the Jordan River, with an after party to follow at Squatters.

“We felt like business has the power to make real and tangible difference and change,” he said. “For us, it felt like a for-profit company had a greater potential to do good. It had a much higher ceiling than we would have had as a nonprofit.”

As a for-profit company, it doesn’t take donations, so companies that want to support the ocean cleanups get involved in other ways. Those relationships, and the conservation message behind the brand, also have taken United by Blue products into places that wouldn’t ordinarily have apparel and bags for sale. Into Subaru dealerships, for one, which now carry United by Blue T-shirts and bags, but they’ve also opened doors with Sperry Top-Sider and Levi’s, which led a cleanup with its team in San Francisco and gave all of their worldwide employees, United by Blue T-shirts.

“Through our giving and developing these relationships, I think our brand reach is growing at the same time,” said Cresswell of Klean Kanteen. “We’re reaching communities that maybe we don’t reach through other avenues.”

Like the others above, Horny Toad’s (rebranding as Toad & Co.) effort to advance a social cause has been built into its business model. Since 1997, all picking, packing and shipping for the company has been done by an adult with developmental disabilities working to build life skills and complete vocational training through Planet Access Company, which Toad & Co. created with the Search Developmental Center.

“It’s been part of the business since the beginning,” said CEO Gordon Seabury. “When we got into the industry, we realized that there was great work being done on the environmental side, and so … the place we felt we could lead was on the people side, the social leadership side.”

“Obviously, the reason we got into this was not a marketing or a financial reason, although there are significant benefits,” Seabury said. “From a business standpoint, it’s been an amazing win-win.”

They see zero shrinkage and claim one of the most on-time track records because, he said, “we’ve got people who are excited to be there” — but those people are equally compensated.

Beginning next year, Toad & Co. products will come with an insert declaring they were packed by Planet Access and product purchases will be tied to the Search For Adventure program. Every product purchased will fund a few hours of vacation for a person with developmental disabilities.

Chicago Mayor Rahm Emanuel has studied Toad & Co. as an example of a financially viable social venture, Seabury said, and is looking for ways to “put a loudspeaker on the success of the program as an example of innovative for-profit not-for-profit models.”

B Corp certification of more than 1,000 sustainable businesses from 33 countries is just one of the signs that these practices are beginning to thrive.

“Being a responsible business means caring about more things than just profit; it means caring about the people and caring about the planet we live on and wanting to protect it,” said Marcario with Patagonia. “I really think that business is potentially the greatest agent for change now. … It’s what needs to happen. If we’re going to have a world that we can all live in, you can’t just consume at all costs anymore.”

–Elizabeth Miller