Wednesday, March 10, 2010

Common Cause for the Community

Mike Hannigan believes communities know best how to solve their own problems. He just wants to help supply the resources. That’s why Give Something Back Business Products, the office supply company Hannigan co-founded in 1991, donates the lion’s share of its profits to local charity groups.

As their website shows, the company has donated to a staggering roster of local organizations. The graphic below, charting their year-by-year donations, illustrates the reach of their giving.

In parts one and two of my interview with Hannigan, he described the development of his business model. Today he cuts to the crux of how Give Something Back Business Products selects recipient charities.

Q: Can you describe what you call the “democratic ballot process” by which you choose organizations to which to donate?

MIKE HANNIGAN: The community is served by thousands and thousands of non-profit organizations that are addressing thousands and thousands of different issues. And everyone has a different sense of what’s important in their community. So our goal is not to have the rich and the powerful decide what the community’s needs are. Our goal is to reach as deeply into the grassroots of the community that we serve and ask them, what are the most important issues? And what are the organizations that are doing the best work?

So the way we do that is, first of all, we poll our customers. We’ve got about four or five thousand business customers. Some of those customers have one employee; some of those customers have 10,000 employees. So our goal is to have every customer poll their employees to dig as deeply into the communities of those customers and filter the information up to us. An organization has got to be a 501c3 and it’s got to have a local impact. But beyond that, we solicit organizations for qualifications, and then we distribute the funding according to the votes cast by our employees and our customers in the geographical areas that we serve.

So just to give you an example: 15% of our business right now comes out of our Sacramento regional office, so 15% of our profits are going to be donated to Sacramento-based organizations selected for us by Sacramento-area customers and employees.

So that way, we feel like the true needs of the community – to the extent that they’re recognized by the people who live and work in those communities – are reflected by the donations that we make as a company.
So I don’t have any more influence myself than you would if you were a customer. Frankly, that’s the way it should be. Because I have no more insight into what’s happening in your community than you have into mine.
So in Sacramento, if 10% of the votes come back and they’re for the Sacramento Women’s Cancer Resource Center, 10% of the money that’s associated with that ballot is going to be given to the Women’s Cancer Resource Center.
Think about any corporation. When they make policy decisions or operational decisions, they make them in the context of who their central stakeholders are. Our stakeholder is essentially the community. The community is served by our success.
Hannigan's system is impressive, but what's the sum effect of all these donations? Tomorrow, in the final installment of our conversation, Hannigan describes how the success of Give Something Back Business Products has nourished his ambitious vision for the future of America’s business sector.

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