(02:03) A Media Company Called GOOD

Jonathan Greenblatt was named the CEO of GOOD in April of 2008. Krista quotes from their mission statement, "GOOD is the integrated media platform for people who want to live well and do good." GOOD was profiled in the New York Times upon its launch in 2006, and founder Ben Goldhirsh was interviewed on NPR's Weekend Edition Saturday about his plan of building a media company that's both profitable and beneficial to society.

(02:50) Ethos Water

Peter Thum had written about the origins of Ethos Water:

My first exposure to the water crisis in the developing world came while I was working on a consulting project in South Africa. I saw hundreds of people who didn't have access to safe drinking water or sanitation services.

The water problem was vast but subtle. It's not that unusual to hear of a 2-year-old child dying of diarrhea, especially when higher-profile problems such as the HIV/AIDS crisis are engaging the world's attention.

More than one billion people worldwide have no access to safe water. More than two million people die each year from illnesses related to unsafe water. Children die in disproportionate numbers because their immune systems are not fully developed.

After returning from Africa, I kept thinking about these things. I later took on a consulting project in England, advising a soft drink manufacturer. Bottled water was a fast-growing, $35-billion-a-year global industry at the time, and I saw that people in England were willing to pay more for premium-branded water. I wondered whether there was a way to leverage this luxury industry to address a problem for people at the other end of the economic spectrum.

Peter Thum and Jonathan Greenblatt were also interviewed in Business Week, The New York Times, and on National Public Radio when their company was purchased by Starbucks.

(3:54) Global Water Crisis

According to the World Water Council, more than 1.1 billion people lack access to clean drinking water, and 3900 children die every day from water borne diseases. The journal Nature posted a color coded map of the crisis, showing which nations around the world lack access to clean water, which nations suffer the most from water borne illness, and which nations have almost no fresh water of their own to draw on. Some experts have suggested that a water shortage could be the biggest threat facing humanity this century. And while the water crisis is most acute in parts of Africa and Asia, the effects of water shortages are beginning to be felt in the United States as well.

Some of the large organizations working on the water crisis include UNICEF, H2O Africa, WaterPartners International, and the Global Water Challenge. There are also smaller organizations trying to find novel solutions to the water crisis, including PlayPumps International, which makes merry-go-rounds that serve as community water pumps. (YouTube video.)

(04:15) How Bottled Water Impacts the Environment

Elizabeth Royte, author of Bottlemania: How Water Went on Sale and Why We Bought It has talked about how bottled water grew into such a big industry in the United States, despite the fact that the tap water in this country is so clean and readily available. As the bottled water industry has grown, so has the criticism. Consumer advocacy organizations like Corporate Accountability International and Food and Water Watch have launched campaigns to publicize the hidden costs of bottled water. Among the most visible costs is the sheer number of plastic bottles that are winding up in landfills. The Green Guide estimates that Americans are throwing 22 billion plastic bottles in the trash every year.

(07:42) A Model of Proaction to Change the World

New York Times columnist David Brooks recently wrote about the new generation of social entrepreneurs, who do not at all resemble 60s era activists.

Earlier generations of benefactors thought that social service should be like sainthood or socialism. But this one thinks it should be like venture capital.

These thoroughly modern do-gooders dress like venture capitalists. They talk like them. They even think like them. That means that aside from the occasional passion for heirloom vegetables, they are not particularly crunchy. They don't wear ponytails, tattoos or Birkenstocks. They don't devote any energy to countercultural personal style, unless you consider excessive niceness a subversive fashion statement.

(08:32) Milton Friedman's Economic Theory

Milton Friedman (1912-2006) was awarded the Nobel Prize for Economics in 1976 for his work on monetary theory. In his book Capitalism and Freedom (1962) he wrote, "There is one and only one social responsibility of business—to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud." Though often called a conservative economist, he said, "I call myself a liberal … in the sense in which it means 'Of and pertaining to freedom.'" He believed that that freedom from government regulation would always benefit society more than government intervention in society. What made him famous was the bestselling book that he wrote with his wife to celebrate the free market system: Free to Choose (1978). He went on to advise the Reagan Administration on tax cuts, deregulation, and privatization. He also believed public schools should be privatized and advocated the legalization of drugs.

(09:14) Value Proposition

The term "value proposition" refers to the entirety of benefits that a customer will receive upon purchase of the product. Greenblatt's argument is that a brand's value proposition can extend beyond the immediate benefits to the customer and include the benefits to the society or the world.

(10:51) Scale

Greenblatt refers to the concept of "economies of scale," which is the idea that as a business produces more and more of a single product, the efficiency of production goes up, reducing the per product production cost.

(12:39) Critics of Ethos Water

Among those who criticize Ethos Water for not contributing more money to the global water crisis are an anonymous satirical website that disguises itself as the actual Ethos Water website, and a website called TheTruthAboutEthos.com, run by a man named Robert Sanchez, who is gathering signatures for a petition to Starbucks, asking that Ethos donate "no less than one half of the net profit per bottle" rather than a set donation of 5 cents per bottle.

(14:13) Water is the Petroleum for the Next Century

Krista refers to Goldman Sachs analysis of water as a commodity, which found that global consumption of water is doubling every twenty years, providing an opportunity for investors because the price of water is bound to go up.

(17:03) "We Should Demolish the Mythology of Top-down Aid Programs"

Krista refers to a blog post Greenblatt wrote, "The Best Recipe for Ending Poverty is Homemade."

We should demolish the mythology around top-down, aid-driven programs as the elixir for global poverty. Quite simply, the classic premise of "aid" to poor nations has failed. While the original intentions were admirable, the Bretton Woods system has proven woefully inadequate in uplifting the poor. The World Bank continues to perform some important work, but it also has squandered tens of billions of dollars and often cemented ineffective policies and corrupt regimes in Africa and Asia. The International Monetary Fund has imposed its draconian, belt tightening policies on developing countries in a manner not so different from electro-shock therapy. Despite the utility of aid, it is insufficient to rescue the billions of human beings caught in the flytrap of dire poverty.

These institutions have a wide set of critics who often point admiringly to the market and big business-driven trade as a better answer. However, "trade" per se is not the solution. Global trading deals and regional economic groupings like ASEAN and Mercosur have driven down tariffs and facilitated cross-border commerce. Widespread market liberalization and privatization efforts have ushered capitalism into once closed economies. While these trends have improved trade and investment flows, the largest beneficiaries typically have been multinational corporations. These large entities discover new consumers and rich profits but there is insufficient trickle-down relief to the bottom billions. Because of the resulting inequities, a global backlash has erupted. It is a movement that speaks to massive grassroots economic frustration. Even a wide range of the establishment elite acknowledge that trade is important but alone cannot unlock the gates of prosperity for those most in need.

It is time to move beyond these flawed constructs and find inspiration in a new generation of solutions. We need to shift beyond "aid" or "trade" and focus on "home-made" — locally developed, enterprise-driven approaches to economic opportunity. Rather than always emphasizing the top-down centralized programs, we should shift direction to embrace bottoms-up, decentralized models of development.

(17:43) The Bretton Woods System

The Bretton Woods System was set up by the 1944 agreement to make arrangements for the post war world after Germany and Japan were defeated. The conference took place in Bretton Woods, New Hampshire, with members of 44 nations in attendance. The agreement created the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), later known as the World Bank. The goal of the International Monetary Fund is to stabilize world currencies, and the goal of the World Bank is to provide financial assistance to developing nations.

(18:14) NAFTA and GATT

Greenblatt refers to two agreements between the United States and other nations that were designed to help promote free trade. NAFTA, which stands for the North American Free Trade Agreement, was signed in 1992 as a way of gradually lowering tariffs and trade barriers between the United States, Canada and Mexico. GATT, which stands for General Agreement on Tariffs and Trade, was considered an interim trade agreement between 23 nations in 1947, with hopes that it would be replaced by a United Nations agency. But no United Nations agency ever took over it's role at reducing trade barriers between countries, and so it was finally replaced in 1995 by the World Trade Organization, or WTO.

(19:11) Microfinance

Greenblatt refers to this growing movement to provide very small loans to the global poor so that entrepreneurs can start small businesses. One of the founders of the microfinance movement was Muhammad Yunus, who shared a Nobel Peace Prize for his work in 2006. He was a professor of economics when he traveled to Bangladesh in 1983 and established the Grameen Bank, with the goal of providing loans to local people so they could start small businesses. Other banks have since followed his model in more than 100 nations, and they've found that these small loans to the poor have a repayment rate of more than 95 percent. But there has been a debate about whether microfinance should function as a non-profit model or a for-profit model. The debate was touched off recently in Mexico when a non-profit microlending bank turned itself into one of the most profitable banks in the country.

(19:37) Kickstart

Greenblatt refers to Kickstart, a non-profit organization hat designs and markets small scale technologies to help create new businesses in developing nations, especially Africa. They market several pumps to small famers, including the Money Maker, the Super Money Maker, and the Super Money Maker Hip Pump. KickStart co-founder Martin Fischer has said in a video interview (YouTube video) that KickStart sells their pumps to farmers instead of giving them away because, "Most development agencies see the poor as victims … We see them as entrepreneurs. We see them as extremely hardworking people. They don't need a handout. They need an opportunity." Martin Fischer is the 2008 winner of the Lemelson-MIT Award for Sustainability from the Lemelson Foundation.

(21:07) "Don't Wait for the Rain"

Mr. Ebbo is a successful rap star in Tanzania, and the promotional music video for the MoneyMaker water pump is not the first time he's been enlisted for a public service announcement. He also agreed to sing about the virtues of privatization for the Tanzanian government in 2003.

(21:54) X-Prize Foundation

Greenblatt refers to the X-Prize Foundation, which started as a way to kickstart the private space industry, but has since looked for ways to use prize money to motivate innovators and inventors to try to solve a variety of problems. There are X-Prizes currently available for a car that gets 100 miles per gallon, and any two teams who can land a robot rover on the moon. X-Prizes currently under development include prizes in the areas of education, energy, exploration, global entrepreneurship, and life sciences.

(22:43) Charles Lindbergh was Inspired by a Prize

Raymond Orteig was a French born hotel owner in New York City when, in 1919, he offered a $25,000 prize to pilot who could fly nonstop between New York and Paris. Several pilots died in their attempts before the airmail pilot Charles Lindbergh succeeded.. He flew a single engine plane that he had redesigned himself to be as light as possible, but which carried a huge gas tank. The flight took him 33 ½ hours . He landed in Paris on May 21st, 1927.

(24:20) Segway Inventor Dean Kamen

Another example of the social entrepreneurs Jonathan Greenblatt talks about, who are trying to solve problems like the global water crisis, is Dean Kamen, who became famous for inventing the Segway. He was recently on The Colbert Report, talking about a new device he's been working on to convert any liquid with water content into clean drinkable water.

(33:10) Teach for America, Ashoka, NRDC, Room to Read

Greenblatt lists the names of a few of Good Magazine's non-profit partners.

(33:34) "Grating Ernestness"

Krista Refers to a profile of GOOD magazine by the media gossip blog Gawker.com.

It's easy to be cynical about Good: Every single influence is clearly displayed, and, good Lord, does the earnestness get grating. The letter from the editor comes atop a paean to the Creative Commons license and a message about how the paper stock chosen "saved the equivalent of 150 trees and lowered air emissions by 21,520 lbs." … But we're tempted to give it a passing grade for this reason alone: If rich people are going to read anything, it's probably better that they read this than, say, Dealmaker. But again, that's assuming rich people read.

(35:43) The Six Sins of Greenwashing

Krista refers to a study conducted by TerraChoice, a marketing firm that helps promote environmentally friendly businesses.

In an effort to describe, understand, and quantify the growth of greenwashing, TerraChoice Environmental Marketing Inc. conducted a survey of six category-leading big box stores. Through these surveys, we identified 1,018 consumer products bearing 1,753 environmental claims. Of the 1,018 products examined, all but one made claims that are demonstrably false or that risk misleading intended audiences.

BrandWeek covered the trend from the point of view of the companies that are trying to pin down what "green" means. WNYC's On The Media explored the fact that there is virtually no regulation governing the environmental claims companies make about themselves.

(36:45) Cause Marketing

This term refers to any of a variety of mutually beneficial partnerships between for-profit businesses and non-profit charities.

(36:51) Red Campaign

Jonathan Greenblatt wrote about the transparency problems he saw with the Red Campaign back in 2006.

On one hand, a company can operate in the clear when it markets a product and messages a lump sum charitable benefit as long as these two activities are not tied. Thus, it is permissible to state please buy our product and, oh by the way, regardless of whether you do so, we will donate $50 million this year toward saving the world.

On the other hand, a business can market a product and express a specific financial commitment per unit to be donated toward charitable ends. Ethos Water employs this approach. Its marketing clearly states that the brand will donate $.05 per bottle sold, so every bottle makes a difference Many have commented that this appears a paltry sum, but such top-line analyses often fail to consider the complicated cost structures and layered margins across the value chain, particularly when products move from manufacturer to distributor to broker to retailer.

However, when companies can attempt to straddle the line and communicate that they will donate a percentage of profits, they start to enter a more ambiguous grey space. What if the specific product line is not profitable? What if the overall business is not profitable? And what are profits anyway? And how will they be disclosed?

Advertising Age reported in 2007 that the companies involved in the Red Campaign had spent as much as $100 million on marketing and advertising the Red Campaign, but that the campaign had only donated $18 million to the Global Fund to Fight AIDS, Tuberculosis and Malaria. Officials from the Red Campaign countered that only $50 million had been spent on advertising, and early in 2008 they reported that the campaign itself and its corporate partners had contributed $59 to the Global Fund overall.

(45:28) Earlier Pioneers of Ethical Branding

Greenblatt mentions a number of companies that have been known for their social mission, including Ben & Jerry's and Stoneyfield Farms which both have strived for environmentally friendly agricultural practices, The Body Shop which was one of the first cosmetics companies to oppose testing products on animals, and Smith & Hawken, co-founded by Paul Hawken, which incorporated environmental activism into its gardening tools business.

(46:03) Greenleaf

Greenleaf is a non-profit organization that promotes a practice that it calls "servant leadership." Robert K. Greenleaf founded the organization after writing his essay The Servant as Leader (1970).

The servant-leader is servant first… It begins with the natural feeling that one wants to serve, to serve first. Then conscious choice brings one to aspire to lead. That person is sharply different from one who is leader first, perhaps because of the need to assuage an unusual power drive or to acquire material possessions…The leader-first and the servant-first are two extreme types. Between them there are shadings and blends that are part of the infinite variety of human nature.

The difference manifests itself in the care taken by the servant-first to make sure that other people's highest priority needs are being served. The best test, and difficult to administer, is: Do those served grow as persons? Do they, while being served, become healthier, wiser, freer, more autonomous, more likely themselves to become servants? And, what is the effect on the least privileged in society? Will they benefit or at least not be further deprived?