The Fourth Sector

In this era of recession and pricey bank bailouts, much of the public feels a creeping sense of unease about the role of corporate business in America. But for Mike Hannigan, founder of Give Something Back Business Products, there’s cause for hope.

Hannigan’s company, co-founded with partner Sean Marx two decades ago, donates the majority of its profits to local charities. As a result, the Berkeley-educated Hannigan has begun to chart a promising new path for corporate leaders. With Marx holding the reins of the company’s day-to-day operations, Hannigan has taken his insights to the road as speaker, lecturer and mentor for a new generation of business leaders. The best part, too, is that his message portends a new, robust arena of corporate giving within the business sector.

Be sure to check parts one, two and three of our interview. They lay the groundwork for this fourth and final installment of the conversation, in which Hannigan shares his fascinating vision for the future.

Q: What do you see as the future of the company? And do you see other companies following your lead?

MH: In the seventies, when I was in college as a student activist, there was a whole group of student activists like me. We were everywhere back then in the early-seventies. But I didn’t know a single one of my peer group that said, okay, I’m going to be an activist for the rest of my life, and I’m going to use business as my tool to reach those goals.

Business was not presented as a tool for somebody who was focused on producing social benefit. Business is now seen as a pathway to do something good for the world. You can’t go to a major business program at a college today and not find a huge chapter of people who are there because they want to integrate business with some corporate social responsibility. So it’s very mainstream. Every curriculum in the business schools has a significant element of responsibility as far as the core curriculum.

That didn’t happen fifteen years ago. There’s this whole network of national organizations that are similar to [how] the chambers of commerce supports the regular business community: Social Venture Network, Investor Circle, Business for Social Responsibility, B-Corp. There’s hundreds of these national and local organizations which are clearinghouses for business people, people who use the tool of business but have social responsibility as a core organizing element.

So in the past fifteen years especially I think we are kind of on the threshold of this fourth sector of the economy. There’s the non-profit sector, which is about a hundred years-old. You got the government sector. You got the for-profit sector. Now you’ve got this whole kind of consolidation of what’s called almost a fourth sector of the economy.

You’ve got billions of dollars now in investment capital coming to fund investment in businesses like this. You’ve got lots of successful models: Give Something Back, Newman’s Own, Patagonia, Ethos Water, Method, Seventh Generation. Hundreds of companies now that are organized specifically by people who see business as a tool to accomplish viable social benefit.

So I think fifty years from now we’ll look back at the early twenty-first century and say, oh, that’s where the fourth sector of the economy started off. Because the business community and the government community and the non-profit community are not really up to the task of figuring out a way to distribute the unbelievable wealth this country has.

That’s what we’re a part of is that whole kind of movement to create the institutions that will facilitate the workings of the market on behalf of the community as a whole, and let consumers play their role in doing it. I’m very optimistic about where we are in terms of creating this longstanding institution. I think twenty years from now, people will look at companies like Give Something Back and there will be thousands of them.

Q: I grew up in Northern California, and I can totally see the Berkeley influence in what you’re saying. It’s really cool.

MH: I totally agree with you there, but I tell ya, I will have a conversation with someone in St. Louis and it’s basically totally consistent with those bedrock, middle-American values. Anybody would support the idea of the marketplace. We’re not arguing for the elimination of our competitors. What we’re trying to do is create an alternate strategy that consumers and citizens can pursue to their benefit, both commercially and environmentally, and in other social ways.

So we’re not saying let’s eliminate the exploitative business world. We’re saying let’s transform the business world in a way that considers the power of the community as stakeholder to create a better world. And you know, there’s not a lot of people that can find fault with that.

We’re a market-based organization. Our goal is to go out and aggressively compete our competitors whenever we can. In an ethical way. And the beneficiary of that is everyone, not just a few people that happen to own stock in the company.