Social Entrepreneurship and Cause-Related Marketing...

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

In this second half of my interview with social entrepreneur Michael Arkes, the founder of Helping Hands Rewards…a Chicago organization that helps social enterprises sell better… we peel back the layers a little to reveal what motivated Arkes jump into social enterprise and how he manages his for-profit company and a social enterprise at the same time.

Read part I here.

What are your financial results?
“We expect to lose money through 2009 but plan to approach breakeven in 2010.”

I assume that you committed a fair amount of time during the startup of Helping Hands (I've been involved charity startups myself). How do you justify that attention that could have been paying to Hinda?
“I grew up in a home that participated in social activism and then went to college in the late 1960’s as our country was trying to deal with our involvement in Viet Nam. I was shaped by these early experiences and throughout my adult life have served on Boards, volunteered, and fundraised for a variety of worthwhile social and civic organizations. HHR is an opportunity for personal fulfillment. For the past 35+ years, I learned how to build a very successful incentive company. I saw the opportunity to apply what I know best to the betterment of people seeking the opportunity to improve their lives. This was the ideal convergence of social philanthropy with my experience and expertise.”

What’s the relationship between Hinda and Helping Hands?
“Helping Hand Rewards and Hinda have the same President, me. Hinda is a customer of Helping Hand Rewards and purchases product from the social enterprises at the same price as companies Hinda competes with. Obviously, Hinda’s team appreciates and shares in my commitment to support the social enterprises. Their products are well represented in Hinda’s award assortment and marketing efforts. Hinda wants to also be recognized as a leader in corporate social responsibility.”

What are the social enterprises involved?
“We work with six social enterprises:
  1. The Enterprising Kitchen
  2. Greyston Bakery
  3. World of Good
  4. Mercado Global
  5. Women Helping Other Women
  6. Bright Endeavors.”
Do they have to be organized as nonprofits for you to take them on?
“Not all of these are not for profit corporations. Most are. All these organizations provide people in need the opportunity to be successful.

Typically, we do research and network in order to identify a social enterprise that offers consumer products that are appropriate for the incentive market. We then introduce ourselves to them and often they are not responsive. We persist. These organizations rarely have staff available to consider a new sales channel. We try to find a leader who is open to fresh ideas and willing to commit their organization to the opportunity. This process has taken far more effort than I initially envisioned. We also have to be careful to work only with social enterprises that can operate their enterprises professionally since they will need to service customers that expect a high quality of service, including prompt responses to their questions. We discontinue our discussions with social enterprises we find incapable of servicing our customers.”

There’s a natural kind of push-pull in social enterprises between fulfilling contracts and fulfilling missions. Where does Helping Hands stand?
“The social enterprises make the decisions regarding the balance of efficiency and employment. Our role at HHR is to sell more of their products so they can generate more profits to employ more people. Each social enterprise has stories of individuals that they have helped become successful. However, we do not credit these beautiful success stories to the assistance of Helping Hand Rewards. We do not ask the social enterprises to identify which are the incremental workers they hired and then to track their success. We are pleased just to know that we are generating revenue for these organizations.
Typically, we are not being asked to justify the price of our products to comparable products without the social purpose components. We have found that many of our customers are personally involved with social causes and welcome the opportunity to experience this same personal fulfillment at work.”