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Corporate Social Responsibility
'Our Pick'
5.10.2007 - 11:59pm ET
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Source:
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New York Times
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News Category:
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Businesses Try to Make Money and Save the World
By STEPHANIE STROM
ALTRUSHARE SECURITIES is a brokerage firm, engaged in the sort of things
you might expect of a Wall Street outfit, like buying and selling stock,
and providing research on companies. Unlike its peers, however, the firm
is majority-owned by two charities that each control about one-third of
it.
So is it a for-profit business? Or a nonprofit fund-raising machine?
In fact, like hundreds of new businesses starting up around the country,
it is both. Altrushare is an example of the emerging convergence of
for-profit money-making and nonprofit mission.
The practice is even creeping into corporate bluebloods like General
Electric, whose $12 billion Ecomagination business promotes its
products’ minimal environmental impact as well as their positive impact
on the bottom line.
“We’re a for-profit institutional brokerage, and we have to compete on
execution and commissions and do so with the same technology and talent you
would expect from a top-tier firm,” said Peter Drasher, a founder of
Altrushare, which is based in Bridgeport, Conn. “What makes us different
is our nonprofit ownership and our mission, which is to support struggling
communities with our profits.”
The nonprofit sector is also part of the movement. Motivated by growing
competition to attract donor dollars, charities are going beyond
longstanding practices. Some are adopting innovative investment strategies
or owning other ventures outright.
“I think what people are increasingly looking for, whether in the
for-profit or nonprofit sector, is how you harness the vitality and
promise of capitalism in a way that’s more fair to everyone,” said
Juliana Eades, the president of the New Hampshire Community Loan Fund, a
nonprofit mortgage lender that has begun dabbling in other types of
financing.
The result is a small but budding practice — what some label the fourth
sector — composed of organizations driven by both social purpose and
financial promise that fall somewhere between traditional companies and
charities. The term “fourth sector” derives from the fact that
participants are creating hybrid organizations distinct from those
operating in the government, business and nonprofit sectors. But because
the types of participants vary widely and much of the activity is nascent,
no single name for what is occurring has gained broad use.
“There’s a big movement out there that is not yet recognized as a
movement,” said R. Todd Johnson, a lawyer in San Francisco who is
working to create an online wiki to engage in the give and take of
information for what he calls “for-benefit corporations,” another name
for fourth-sector activities.
Consumers, employees, managers and — perhaps most important —
investors are driving the phenomenon.
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