S1E1 Maiden Voyage

Social Business

Social Business: The Heart of the Matter
Season 1, Episode 1
Our Maiden Voyage

Tony: [00:00:00] Social Business: The Heart of the Matter season number one, episode one: Our Maiden Voyage.

Gail: [00:00:11] This is Social Business: The Heart of the Matter where we expose the genius and the goodness of social business. You will discover how this cutting edge business paradigm taps the power of the marketplace to address global problems in significant ways. Sponsored by [00:00:30] HopeQuestGlobal.com [1.9] using a for-profit team-building model where building a business feels more like building a legacy. And here’s your host Tony McWilliams.

Tony: [00:00:44] I am indeed Tony McWilliams and I’m here today with my co-host who’s providing some incredible support for this podcast. And that’s my beautiful wife Gail McWilliams.

Gail: [00:00:54] Tony this is exciting. You have been studying and researching and getting ready for this moment. Congratulations on number one podcast. Social Business: The Heart of the Matter

Tony: [00:01:07] Yes indeed and I hope that we can spread the word about what social business is all about and how people can get involved in proactive ways.

Gail: [00:01:15] So tell me what exactly is social business?

Tony: [00:01:19] Social Business is the simple concept really that you’re taking a for profit entity, a for profit business, one that operates in the marketplace someplace and embrace a social cause and use your profits or some of your profits anyway for the sake of that particular cause and hopefully provide some sustainability to address that social cause in various and proper ways.

Gail: [00:01:44] OK so let’s break that down. Give me an example. Where has that being done already?

Tony: [00:01:50] The first obvious example to most people anyway who’ve been paying attention is Tom’s shoes. It’s the shoe company that has been started by a young man for the express purpose of getting shoes into the hands of children in various needy places of the world; for instance, you buy a pair of Tom’s shoes and a pair of Tom’s Shoes are sent to a needy child someplace in the world.

Gail: [00:02:15] And I love that because it was driven by compassion. I actually talked to the mother of the founder of that business and she said literally she spent all day long putting shoes on children and seeing the joy and excitement in their faces they’d never had a shoe before.

Tony: [00:02:33] And in that case the social outreach of that gives children opportunities that they would not have had otherwise.

Gail: [00:02:41] So I understand that this show and these programs you will always have a special guest on.

Tony: [00:02:47] I don’t know if I always will but most of the time I will because I am very much interested in connecting with people who are already doing something proactive in this area.

Gail: [00:02:56] So this is cool because people need to stay tuned and listen and get an idea themselves of all the different businesses that are sponsoring or at least helping. But there’s even more to the social business, which I’m sure you’re going to share about in the days to come. But I want to ask a question. This is what really intrigued me. Tell me about the millennials.

Tony: [00:03:16] The Millennials a re the younger generation of people who have a very special interest in social causes. It’s said that 92 percent of millennial mothers for instance do not even want to buy a product or participate in a service except that product or service has a connection to a social cause.

Gail: [00:03:37] So that would be our daughters who are very much into social business and they’re teaching us a thing or two.

Tony: [00:03:44] We are of the boomer generation we’re kind of playing catch up with what this social business concept is all about and what millennials are very much interested in.

Gail: [00:03:53] Well it’s sort of exciting when you look back over history from the industrial revolution to all the different seasons that have come along and the different causes and you know we were busy just working and trying to provide for our families. But now it seems like the focus is everyone’s busy not just taking care of their own but also trying to help around the globe. That’s pretty cool.

Tony: [00:04:19] More and more people are becoming globally socially conscious. They’re realizing that something can be done in very easy ways to make an impact and a difference someplace else in the world especially if that need is obvious.

Gail: [00:04:33] Well I know you have an exciting guest today. This is a guy that you really admire. I admire him too and we could listen to him speak for hours. But listen you’ve got to get to this interview don’t we?

Tony: [00:04:44] And let’s get to him. This is Sam Caster. He’s a social entrepreneur founder of MannaRelief, a nonprofit organization. Now non-profit is different than social business but he decided that he had to turn his charity into a social business outreach or he wasn’t going to be able to do the things he desperately wanted to do and you’ll hear him tell about that just now as we go into that interview. But one more thing about Sam. He’s the man who really helped me understand what social business is all about. He’s the person who got me interested in it and is why I started reading the books and gathering the information and then getting proactively involved in it as well myself.

Gail: [00:05:29] And I might add that Sam and his wife Linda are the genuine real deal. They live eat and breathe what we’re about to hear about how we can be effective, changing the lives of other people.

Tony: [00:05:38] Indeed. So let’s go to that interview just now and let me introduce you to Sam Caster. All right I’m here today with Sam Castor and he’s a social entrepreneur and he’s going to be a credible complement to the theme of all we talk about here on this podcast; social entrepreneur, social business, social enterprise. And first of all Sam how did you get involved in even thinking in those terms?

Sam Caster: [00:06:06] Well thanks for having me on your show today. There’s an old saying necessity is the mother of invention. I ran a major not for profit feeding kids all over the world and in the not for profit industry you have to do it all through fundraising. And in 2008 when the economy took a nosedive every industry was hurt but no industry as much as the not for profit industry. Because the first thing to go in hard times is charitable giving. So we lost 60 percent of our funding in about a year. And you know that led me to start looking for other more sustainable forms of revenue generating for a not for profit. Somebody had sent me a book about that time from an author named Nick Francis out of Australia and the name of the book was The End of Charity. And I mean that wasn’t too encouraging since I was running a charity. But it was very informative. What he was saying is we’re not going through a glitch in our economy we’re going through a global shift. And the people in the not for profit industry need to understand the dynamic of what is going on and if they want to make sustainable impact with their charity functions they’re going to need to tap into the marketplace through a new model of doing business called social entrepreneurship, social enterprise and that was my first exposure to the concept. But it’s really using the power of the marketplace to generate the funding. And in some cases the technology to provide sustainable solutions to the World’s Biggest Problems.

Tony: [00:07:44] I immediately began to think of the Girl Scouts and the statistic that they have. They’re a nonprofit organization doing a great work and they have implemented for years a social enterprise structure approximately a month’s time in a given year selling cookies. And what’s some of the statistics on that.

Sam Caster: [00:08:07] Well that’s a great example of a not for profit that generates an enormous amount of revenue through the marketplace and their case the sales of cookies each year for the Girl Scouts organization is 750 million dollars. You’d call that a impactful fund raiser. That’s impactful and could we throw in the word sustainable.

Tony: [00:08:30] That’s impactful and could we throw in the word sustainable? I mean if they didn’t have that would they probably barely in existence.

Sam Caster: [00:08:36] Yeah, it’s sustainable in that they do the campaign every year. So it gives them on an annual base of funding. It was interesting when I started reading about charities using the marketplace such as the Girl Scouts what I found out is 70 percent of all the revenue generated by not for profits comes from the sale of goods and services.

Tony: [00:09:00] So the idea has been around a while. We’ve kind of given it a name now. It’s even become relatively popular to think in terms of social business or social enterprise or social causes through for profit businesses. How many other organizations out there are doing that kind of thing?

Sam Caster: [00:09:17] There’s probably hundreds. Well I mean every not for profit has some level of Marketplace initiatives going on where they’re selling goods or services whether it’s once a year or once a month or when it’s time to raise money for uniforms or whatever. They’re going into the marketplace and I mean it’s a huge business selling candy and popcorn and subscriptions to magazines and so the concept of using the marketplace has been around. What is new is that social businesses are focused on bringing sustainable solutions to problems. And that’s really where the shift has occurred in social business is that the products being sold often times become the triggering mechanisms for social change.

Tony: [00:10:06] Isn’t there kind of a dual shift taking place where social organizations, nonprofits and charities are beginning to think that they need to truly diversify and stabilize themselves by getting involved in products and goods and services. But then on the other spectrum is for profit businesses are not just thinking black ink on a bottom line any more but they’re thinking we need to get involved in social causes. So it’s like there’s this shift going in both directions.

Sam Caster: [00:10:37] Yeah and the black ink increases with better visibility of social cause. I read one of the first articles I read on social business was in Harvard Business Review and it was entitled Can Entrepreneurs Save the World. It was all about this revolution that is going on not in the not for profit sector, in the for profit sector how businesses are linking to social causes to bring more exposure to their company and the things that they’re doing in the world. You know there was a book called Good to Great. That was a very popular book for businesses to look at, how do you rise from a good company to a great company? And Harvard launched what they called the Great Too Good Manifesto. And what they’re saying is that in the 21st century it’s not enough to be great at what you do if what you do doesn’t bring quality of life enhancement to your consumer base. So what good is it to be the number one manufacturer of flavored sugar water in the world. You know that brings no value it’s the number one contributor, sugar is, to almost every disease process and inflammation. So it’s not enough to be great anymore. It’s going to be critical in the 21st century to become good at bringing things into society that make a difference in people’s lives. And here’s what the bottom line was they said it’s so critical to consumers in the 21st century that if you as a business don’t find some way to link to a social cause you’ll be guilty of strategy malpractice because consumers will find you irrelevant in the marketplace and just abandon you. So that’s how critical is that businesses take a look at social business and the way that they can contribute.

Tony: [00:12:30] One of the things that we’re hoping to do at this podcast is focus on the heart of social business. Since I’ve been involved in nonprofits and even in ministry through the years we’ve always said, I say we, my wife and I have always said we need a heart for ministry or outreach and a mind for business that we need both happening simultaneously. I think what concerns me and I think perhaps it’ll adjust itself over time. But sometimes you do see businesses who their heart isn’t in it. You know they’re just kind of doing it because everybody else is doing it. And this program, this podcast, is going to challenge that mentality because I think they can put their heart in it and still have cash flow and profit.

Sam Caster: [00:13:16] Yeah I think accountability is critical to your consumer base and it should be to your company. We’re going to donate an enormous amount of money this year to a particular cause and the company should be interested in what happens as a result of that contribution. You know it is interesting, I talked to a company about 10 years ago and this is before I even knew social business but they were one of the largest raiser’s of money for a disease research foundation and they raised millions and millions of dollars. And I was talking to the CEO and I said, Gosh that’s an enormous amount of money. Do you know what is happening with that? He said actually it’s our biggest dilemma. He said we’re pouring millions of dollars down a black hole we see no results. He said It’s frustrating because we’ve been doing it for over a decade and it’s just like the problem’s still here. The problem is bigger than ever before and we’re always close to finding a cure. I mean that’s just the way it is. And he said we have no ability to show anyone any level of accountability other than we have donated a ton of money. So I think it is going to become more and more important for people to track results and impact because that’s what consumers are looking for. If I’m doing something of value through this purchase how much value is being achieved from it?

Tony: [00:14:43] So there needs to be an alignment of all of the issues in this mix. But then let’s go back to you being in a situation where you’re running a charity you’re feeding kids you’re providing nutrition for thousands of kids. Their lives are being sustained when the alternative is death. You know from starvation or malnutrition. And you’re doing that work. So in the middle of a bad economic time when you’re depending on donors to keep those kids fed things begin to change Can you talk about that?

Sam Caster: [00:15:22] Well when things started shifting economically for us because we started losing our donor base I mean hundreds of not for profits actually just went out of business here in the United States during that 2008 2009 2010 timeframe. And it was just a major shift. So what we started looking for is what is a more sustainable way of providing income because children die of malnutrition they don’t get a second chance it’s not like we’ll next year we’ll catch up. You know I mean they’re gone. Six million kids a year die acute malnutrition and tens of millions of kids have all kinds of chronic illnesses as a result of malnutrition. So it’s critical to find sustainable funding because these kids need nutritional support not once a year, but every day of their life.

Tony: [00:16:10] The everyday concept is understood by all of us who eat every day here in America we’re incredibly spoiled. So how many kids I remember you telling you had some numbers for us back in 2007, 2008. You were feeding so many kids, do you know your numbers?

Sam Caster: [00:16:29] Yeah I think it at our peak we’re feeding somewhere around 50000 kids a day. Nourishing 50,000 kids a day which was sort of our modality we provided a powdered bland of whole foods sourced vitamins and minerals and immune supporting ingredients. The reason we did it that way is number one whole food nutrition is far superior to synthetically made nutrients which dominates the relief organization landscape. Secondly, it’s very difficult to get kids to eat anything that is not indigenous to their culture. So changing their diet by bringing them some sort of a new food product is not a very effective way to attack the problem. So by leaving it in a powder form we could show caregivers at orphanages or urban feeding centers. How simply to just mix it in to whatever food the kids were willing to eat. And whatever they ate we could convert into the most nourishing thing they would ever eat. So we were nourishing somewhere around 50,000 kids per day.

Tony: [00:17:32] So when the economic bad times came the donor base backs off a bit, what happened?

Sam Caster: [00:17:37] We dropped down to about 20,000 kids a day and that I mean you know for us as an organization we lived through that. I mean we just have to adjust economically. Kids don’t live through that. That’s the problem. And that became the sense of urgency of trying to find an alternative way of raising sustainable funding.

Gail: [00:17:59] This is exciting to hear what Sam Caster has to share with us today. And we’re not even finished. There’s more to the interview.

Tony: [00:18:05] There are two things in life that almost every one holds dear. Defined by two words purpose and profit. And it’s our opinion that the genius of social business turns purpose and profit into synergistic ingredients. When you mix the two they work together for each other’s success. However nothing really happens until you’ve got a social entrepreneur in the mix. You know, someone, anyone who initiates an idea where purpose and profit can make their highest impact. For our community at HopeQuestGlobal it’s the results of measurable life changing solutions to childhood malnutrition where those who are part of our community of social entrepreneurs are compensated for any results they help produce. I’ve come to the conclusion that we live in a world where purpose and profit often struggle to actually meet. But our social business mobilizes to deliver a solution, and provide for our community free resources to move purpose and profit into all of the life changing possibilities And our design and hope is that the very first life to enjoy such purpose and profit is yours. So let’s continue this conversation at [00:19:28] HopeQuestGlobal.com/social. [6.4]

Gail: [00:19:35] Let’s get started with part two of this interview with Tony McWilliams and Sam Caster.

Sam Caster: [00:19:42] I mean you know for us as an organization we lived through that. We just have to adjust economically. Kids don’t live through that. That’s the problem. And that became the sense of urgency of trying to find an alternative way of raising sustainable funding.

Tony: [00:19:56] So you find it in a Social Business standard or model.

Sam Caster: [00:20:01] I think social business is the only thing that makes sense. There is not enough money in the charity environment to support all the organizations that are trying to do good work. UNICEF is the largest not for profit organization that is dealing with childhood issues. And last year they got to 1.9 million kids. Six million died. I mean the largest charity in the world can’t get to the problem and it’s because charitable giving and they get large contributions from governments. But the money is in the marketplace. That’s when you get into the trillions. You know the marketplace holds the key to everything in terms of funding. So social business is about tapping into the power of the marketplace to bring sustainable funding and sustainable solutions to global problems that nobody can touch. Governments are too ineffective, too broke, to corrupt in many cases to pay attention. Businesses are too concerned with bottom line. Charities have the right heart and passion but don’t have the revenue. So social business holds the key.

Tony: [00:21:11] I believe you are right. I remember the first time that you kind of painted this picture for me and I can tell you it was the first week of June 2014. My wife and I were on the road, we’re on the phone with you because we knew something was developing in terms of moving forward with an idea that could change this issue in positive ways. And I remember telling you that when I think of feeding kids or addressing the malnourished or the starving of the world I had a picture in my mind something I saw on some commercial, you know a public service commercial on TV from years, decades gone by of this gigantic box truck going down an African dirt road, stops at a village, unloads what it’s carrying, which is a powder of some kind that’s mixed with water creating some kind of soupy food that’s passed out to children who are standing around with you know half naked in distended stomachs and you know they’re starving. And what’s happening what’s coming out of that truck is incredibly rare to them and it’s passed out to them in great quantity, they take it the kids are tickled to have it. And I remember painting that picture for you. And if I’m not mistaken you interrupted me on the phone and you said, “Don’t get me started.” Is what you said. I think I’m quoting you even you said Don’t get me started because what’s wrong with that picture I just painted.

Sam Caster: [00:22:33] Well you know what I was referring to is the standard distribution of food around the world. The U.S. sends out $2 billion a year worth of what is called enriched grain based cereal. And so you know the government subsidies farm subsidies are for carbohydrates and these are processed whether it’s wheat corn or soy, heavily processed. So there’s basically no nutritional value to it at all to make it stable. And enrichment means they add some synthetic vitamins minerals back into it just so it has a nutritional profile and then we send that to people all over the world that are starving and or malnourished. And what we found is that there’s not enough nourishment in enriched grain based cereal to fend off the issues of malnutrition. It may do a good temporary job for relieving hunger if somebody is hungry. Obviously they have to eat something. But just eating something doesn’t solve the devastating impact of malnutrition because malnutrition suppresses your immune system then you become susceptible to every form of chronic disease and infectious disease that exists out there so kids die of chronic infectious disease not micronutrient deficiency. So somehow we have to make an adjustment probably the organization that brought that to light better than anyone was Doctors Without Borders. Then they launched a campaign maybe eight years ago entitled Food is Not Enough. And what they did is they went out there and they said listen United States government and everybody else that is using the absolute least expensive food commodity on the planet to feed people. It’s not working. You know we need nutritionally dense foods that bring value to people’s lives.

Tony: [00:24:23] So Doctors Without Borders so our listeners know who that is. Many people know who that is I think they’ve got the most recent publicity relative to their work in Liberia with that disease scare that was going on there. But they’re literally all over the world making impacts. Is that correct?

Sam Caster: [00:24:44] Yeah it’s a not for profit that takes doctors around the world to deal with all these chronic infectious situations that people find themselves into. And they do a lot of things like cleft palate repair and I mean they just go into areas of the world that don’t have proper medical care and they do everything they can. But one of their big initiatives is trying to impact the lives of malnourished children because it’s the number one killer of children in the world. It’s bigger than everything else combined. Up to 50 percent of all childhood deaths are linked directly to malnutrition. So if you’re going into an area you want to hit the root cause not just to always be dealing with the symptom you know the root causes malnourishment if we can properly nourish these kids not just feed them but nourish them then we don’t have to come back next year to deal with and once again another chronic disease issue that is all triggered from malnutrition.

Tony: [00:25:35] So if anybody ought to know it should be Doctors Without Borders. Also you mentioned that they add synthetic vitamins and minerals to give it the nutritional profile. You don’t works at with synthetic or artificial. Is that correct?

Sam Caster: [00:25:50] Yeah that’s correct I mean synthetic vitamins and minerals they’re chemical isolates. So for instance you make a vitamin from petroleum and you make the chemical structure look similar to the chemical structure of ascorbic acid in vitamin C. Well vitamin C in nature is not a chemical isolate. It’s not a single molecule it’s a complex food matrix of a lot of nutrients that are linked together and they’re all important for the proper use of ascorbic acid, which we call vitamin C, which is not vitamin C it’s just ascorbic. It’s the chemical isolate. So the human body was not designed to receive chemical isolates. The human body was designed to get our nutrients in the form of food. And with minerals it’s just rocks. I mean the number one source of calcium supplements is limestone. So we weren’t designed the rocks because they’re not soluble they don’t dissolve in the human stomach. Plants eat rocks. Plants eat rocks and make them soluble then we eat plants and that’s where we’re designed to get our minerals from. So anyway they’re very inexpensive though. I mean you can grind up rock and you can make chemical isolates out of petroleum. You can provide synthetic nourishment all day long and it’s not that there’s not some value to it because the human body could take anything you put in it and make as much good out of it as it can. But it’s not in food form. So what we do is we find food formed, food sourced vitamins and minerals and that’s what we provide to kids so we get the absolute best impact that we can on quality of life.

Tony: [00:27:40] That’s incredibly noble and I know it’s effective. So the idea is we want to reach even more kids and if a social business model is in place you think you can move forward with that in mind.

Sam Caster: [00:27:52] Yeah it’s you can’t ignore standard business practices. Otherwise it’s a charity. Otherwise you’re girl scout cookies. I mean Girl Scouts are very effective at selling cookies once a year but people wouldn’t buy them every day because you only girl scout cookies every day of your life. I mean some people may argue with that but from a health standpoint you have to provide a product that people either have a huge demand for or need on a daily basis. That’s how you create sustainability. So you’ve got to find those things that are in huge demand in the marketplace. And there’s a formula for it so you can ignore standard business practices to create a sustainable social business. You know you have to go into the marketplace and serve the needs and demands of the marketplace and if you can do that more effectively, more uniquely, more economically than anybody else, then you can create sustainable funding.

Tony: [00:28:48] So a social business is a business.

Sam Caster: [00:28:52] It is not a charity. It is a business.

Tony: [00:28:55] I think that’s important to say a social enterprise is an enterprise. It’s an engagement with the economy and the market in hopes of profits that are directly connected to the cause that made you start the business in the first place.

Sam Caster: [00:29:10] Yeah that’s exactly right. It’s taking the profitability from a for profit entity and channeling it to a not for profit initiative, what would be considered a not for profit initiative. So that again that you can provide sustainability to whatever that issue is.

Gail: [00:29:27] So Tony. What an incredible mentor that you have in your life that has opened your eyes to social business. Why were you so interested in starting a podcast show to tell others about it too?

Tony: [00:29:42] I feel like people are picking up on the movement as it’s happening culturally in social business. They’re realizing things like Tom’s shoes and what Sam Caster is doing. They’re becoming a part the way we’re thinking. But also I felt like there’s a lot of people who aren’t there yet and they need some encouragement. They need knowledge. They need some training. And so that’s why we’re doing podcast and we got more of Sam Caster next time around because that was really only the first interview I did with Sam. He has a whole lot more to say.

Gail: [00:30:13] And I love it. Beyond Sam we have some interesting guests. You’ve already interviewed and it just gets better and better so this is awesome. Let me ask you this Tony. First maiden voyage, first show, Social Business: The Heart of the Matter, Tell me what is it that you want to see happen. By the time a show is over and someone’s listen to it.

Tony: [00:30:37] I want them to not only have knowledge but I don’t want to just create an academic feel. I want them to get so in touch with what this is all about that they find ways that they can also get involved in social business, social enterprise, social entrepreneurship and make their own difference in the world.

Gail: [00:30:56] Plus you have a cutting edge program yourself. HopeQuestGlobal.com that really is fascinating and it’s innovative because it shows how there can be a multiplication of more dollars that can help around the globe as we consider social causes.

Tony: [00:31:14] And of course we’re not talking charity we’re talking business. That’s really what this program’s about. It’s reaching out towards social causes and significant and measurable ways but also doing it via real life honest to goodness business where we use the black ink on the bottom line to make some changes in the world.

Gail: [00:31:33] Well thanks for taking the courage to blaze a trail that the rest of us can follow. It’s going to be great. So don’t miss one episode.

Gail: [00:31:41] This is Gail McWilliams and I am honored to be the co-host of this exciting new podcast; Social Business: The Heart of the Matter. Learn more about how you can become a social entrepreneur at [00:31:58] HopeQuestGlobal.com [2.6]

Tony: [00:32:01] We sincerely hope that you will always be careful to maintain good works to meet urgent needs and become heroes to your generation. This is Tony McWilliams, honoring the greatness in you.

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