Skip to main content

Social Entrepreneurship And Cause-Related Marketing...

...An Interview with Social Entrepreneur Michael Arkes, Part I

In the last 10 years there’s been an explosion of ‘social entrepreneurship.’ There’s probably a better definition somewhere but I think of social enterprises as entities that sell goods or services to further their own mission.

In the United States social enterprises can be organized as for-profits. After all there’s no law here that says a company can’t have a ‘mission’ beyond generating profits. There are certain advantages to organizing as a for-profit, including: fewer regulatory hurdles, faster decision cycles, and better access to capital markets.

I don’t have official numbers in front of me but I think it’s safe to say that most social enterprises are organized as nonprofits, chiefly because in the States a nonprofit with a mission generally has more moral authority than a for-profit with a mission.

Let me hasten to add that social enterprises are not a recent innovation. Many people know about Greyston Bakery in Yonkers, New York which provides Ben & Jerry’s with two million pounds of brownies a year. [Greyston’s unofficial mission: “we don’t hire people to bake brownies. We bake brownies to hire people.”]

But for generations before Greyston there were sheltered workshops, which hire people with disabilities to make stuff, assemble things, fulfilling janitorial contracts, etc. Even a nonprofit hospital sells its services and as such could be considered one of the flavors of social enterprise.

To be frank, cause-related marketing… the subject of this blog… and social enterprises aren’t the same thing, but there is overlap. They are first cousins.

In this two-part post, I publish the first half of an interview I had with Michael Arkes who started Helping Hands Rewards, a for-profit with a distinctive mission to help social enterprises break into the $46 billion incentives market. I’ll post the second half on Thursday.

Arkes who owns Hinda Incentives, a $50 million merchandise incentive company in Chicago, did this on his own nickel and without a real model.



Tell me about how Helping Hands Rewards came about?
"In late 2003 my wife and I were having dinner with a friend, Lauri Alpern, and her husband. Lauri had just started a new job as co-executive director of a social enterprise, The Enterprising Kitchen. We knew this but asked Lauri to explain some more about what The Enterprising Kitchen did. She mentioned in her explanation a gift with purchase order from J Jill that was a significant portion of their sales in 2003. I told Lauri that I would volunteer to help her replicate that sale. Lauri is an exceptional student and we worked together to:
  • Create pricing services and policies appropriate for the incentive market
  • Create support materials
  • Pursue customers
"In 2004 through most of 2006, I volunteered my time, a lot of it. I accomplished this by extending my work day and work week. In 2006 I realized that The Enterprising Kitchen was never going to invest dollars upfront to market to prospective incentive customers with the hope of obtaining some future benefit. Non-profits of their size just don’t have the dollars to make that kind of investment.
"So I decided to form Helping Hand Rewards. The concept is that Helping Hand Rewards would make the upfront investments for marketing and business development and get paid a commission on sales that we make. I then decided to seek out additional social enterprises to provide these same services. I envisioned three roles for Helping Hand Rewards:
  • Indentify and qualify social enterprises
  • Sell the products of these social enterprises to incentive companies that service corporations
  • Create market awareness."

How much did you invest in Helping Hands?
"We started spending money in addition to my time in the fall of 2006 when we secured space at the Motivation Show (the space was donated by Pete Erickson, the owner of the show management company, but we paid for all the other services). In 2007, I spent approximately $25,000 and for the first half of 2008 I spent $22,000."


Do you serve on its board?
"I chose not to serve on the Board of The Enterprising Kitchen. I decided that I would have a more significant impact devoting my time to HHR than serving on their Board."


What models did you draw on?
"We built HHR from scratch. There were no models to learn from. I joined both the Social Enterprise Alliance and Social Venture Network to network and to learn. What I am doing is unique."



On Thursday: The how of Helping Hands Rewards.

Comments

Popular posts from this blog

Three Ways to Be Charitable

I’ve spent a big chunk of my career working with or for charities. Many of my dearest and ablest friends are in the charity ‘space.’ And the creativity and problem-solving coming out of the nonprofit sector has never been greater.  Although I’ve had numerous nonprofit clients over the last decade or so, I haven’t worked in a charity for about 12 years now, which gives me a certain distance. Distance lends perspective and consequently, I get a lot of people asking me which charities I recommend for donations of money or time. My usual answer is, “it depends.” “On what?” they respond. “On what you want from your charitable activities,” I reply. It sounds like a weaselly consultant kind of an answer, but bear with me for a moment. The English word charity comes from the Latin word caritas and means “from the heart,” implying a voluntary act. Caritas is the same root word for cherish. The Jews come at charity from a different direction. The Hebrew word that is usually rendered as charity is t…

Five Steps To Nurture a 30-Year Cause Marketing Relationship

Last Monday, July 22, 2013, March of Dimes released the annual results of its campaign with Kmart... now in its thirtieth year... and thereby begged the question, what does it takes to have a multi-decade cause marketing relationship between a cause and a sponsor?

In the most recent year, Kmart,the discount retailer, donated $7.4 million to the March of Dimes, bringing the 30-year total to nearly $114 million. March of Dimes works to improve the health of mothers and babies.

Too many cause marketing relationships, in my estimation, resemble speed-dating more than long-term marriage. There can be good reasons for short-term cause marketing relationships. But most causes and sponsors benefit more from long-term marriages than short-term hookups, the main benefit being continuity. Cause marketing trades on the trust that people, usually consumers, put in the cause and the sponsor. The longer the relationship lasts the more trust is evidenced.

There's also a sponsor finding cost that…

Top Eight Cause-Related Marketing Campaigns of 2007

Yeah, You Read it Right. It's a Top 8 List.

More cause-related marketing campaigns are unveiled every day across the world than I review in a year at the cause-related marketing blog. And, frankly, I don’t see very many campaigns from outside North America. So I won’t pretend that my annual list of the top cause-related marketing campaigns is exhaustive.

But, like any other self-respecting blogger, I won’t let my superficial purview stop me from drawing my own tortured conclusions!

So… cue the drumroll (and the dismissive snickers)… without further ado, here is my list of the eight best cause-related marketing campaigns of 2007.

My list of the worst cause-related marketing campaigns of 2007 follows on Thursday.


Chilis and St. Jude Children’s Research Hospital
I was delighted by the scope of Chilis’ campaign for St. Jude Children’s Research Hospital. As you walked in you saw the servers adorned in black co-branded shirts. Other elements included message points on the Chilis beverage coas…