Doing Well by Doing Good: 1% For The Planet Lives the Message

Ruby Tuesday Pick of the Week: 1% For The Planet
Why It’s a Gem: This mighty little organization makes it easy – and profitable – for businesses to help out the planet

Why are we here? A big question. Businesses should be profitable for their stakeholders and their employees, but in these desperate times, business must also give back. The needs of our society are so great and government is stretched beyond its capacity. A company that isn’t helping to make the world a better place – either through the inherent value of its product or service or through charitable giving – isn’t realizing its potential. “Doing well by doing good” is good for business, too. Because consumers also care that those they do business with are good citizens of the planet.

I’m sure there are many businesses out there that would like to practice this ethic but are unsure of how to go about it. That’s where 1% For The Planet comes in. Read on to learn how this mighty little organization is affecting big changes for our planet, and how your business can join in. (This interview has been edited for clarity and length.)

Lynda Resnick: In this week’s Ruby Tuesday, we’re speaking with Terry Kellogg, Chief Executive Officer of 1% For The Planet. For our readers, can you describe your business model and its unique selling proposition, Terry?

Terry Kellogg, CEO of 1% For The Planet

Terry Kellogg: 1% For The Planet is a network of businesses that give at least one percent of their [gross] sales to environmental causes. The businesses give their money directly to the organization that they want to support, and then we certify every year that they meet their one-percent commitment. Our unique proposition is that we help members better communicate their commitment and become more powerful forces for change.

LR: This is very impressive. One percent of the gross is enormous. When people often don’t make more that ten percent in their business, one percent is huge.

TK: It’s a very significant commitment, and that is exactly the point. The whole purpose of 1% [For The Planet] is to establish the gold standard for corporate philanthropy and to clearly differentiate companies that are very committed to making a difference with their businesses. Despite the fact that [we've set] such a high bar, we have now more than 1,200 member companies, in 38 different countries. And you’re not going to believe this part, but we’ve been growing leaps and bounds even in this economy.

LR: How long has 1% been in business?

TK: We were launched in late 2002, so it really started in 2003. The founders are Yvon Chouinard, the famous mountaineer, fly-fisherman, surfer, and founder of Patagonia, and his fishing buddy, Craig Mathews, who runs the fly-fishing outfitter called Blue Ribbon Flies in West Yellowstone, Montana.

They had each independently been giving at least one percent of their sales to environmental causes. [They said to each other,] “It’s actually helping our businesses to grow, and if it’s the case for us, shouldn’t it also be the case for other companies? And wouldn’t it be great to encourage them to do it?” So, they hatched this crazy idea and, lo and behold, we’re growing by more than one new member company every day.

LR: Wow, I’m awestruck. What is your background?

TK: I started [at 1%] in the spring of 2005. I used to run the sustainable business practice program for the Timberland Company. One of the reasons that I was really interested in this opportunity [at 1%] is because I realized [that] without the support of government, without the support of civil society, without widespread consumer support, we [at Timberland] were really doing this work in isolation. Another awakening moment for me was realizing [that] when Giving USA analyzes philanthropic dollars in the U.S. on an annual basis, the environmental category is so small it doesn’t even have its own category.

LR: Really? Even with such large organizations as the World Wildlife Fund and Conservation International?

TK: In aggregate, less than 2% of total philanthropic dollars go to the environment and animal rights together. And animal rights are bigger than the environmental pie, so the environment is left with less than one percent. I wanted to do something to change that, and I wanted to do something to help rebrand philanthropy in a positive way to encourage companies to give back, to encourage consumers to step up and inspire companies to do this. And I thought this was the perfect way to do it.

LR: It’s fabulous. Now, what if your company has a bad year and sales are off? It would really take a bigger bite out of your total income.

TK: It is true. It’s a commitment that holds in good times and bad, but we honestly think that that is the right way to approach this.

LR: How does someone become a member of your organization?

TK: It’s very easy. It takes less than 24 hours. They enter into a license agreement with us to use the 1% For The Planet member logo. We grant them the right to do that as long as they commit one percent of their sales to those causes. That’s one of the reasons we’ve been able to do so well: We’ve made it very easy for members to join.

LR: Explain why I would give one percent through you rather than just do it myself.

TK: Very good point. When you join, you will continue to give directly to the organizations that you want to support. The money will not pass through our hands; all we do is certify that the donations occur. So, by partnering with us, you are getting a third-party seal of authenticity that the donations have been made. You’re also demonstrating to a consumer base that is increasingly interested in this sort of thing that you are meeting the gold standard for corporate philanthropy. And you’re doing that in a very significant and powerful way through the use of this trademark. I learned at Timberland that it’s very difficult to communicate a commitment to sustainability in a way that actually makes it true to the consumer level.

LR: You are definitely preaching to the choir.

TK: The third reason [to join 1%] is this notion of collective action, and it’s also one of our challenges, honestly. Leadership companies want to do things that differentiate themselves, but if they really want to make a difference, a really great way is in partnership with other companies and other organizations.

LR: Do you arrange those partnerships? If I came to you and said, “Look, I care about the planet deeply and I want to give one percent of my sales, but I’m kind of lost,” could you hook me up with appropriate people to help realize my dream?

TK: Absolutely. We help broker those relationships for the companies that appreciate that value, and some of them don’t need to. One of our member companies, Patagonia, has a staff of several people that focus on their grant making, and they’ve been doing it for 30 years. Others are small, and they have an organization that they like to give to locally. We welcome that conversation from any member company.

To give you an example, in the case of FIJI Water, I know that you are very passionate about helping to build the recycling infrastructure in this country.

LR: Do you have problems where people doubt the goodness of what you do?

TK: Well, very interesting question, because we are just entering into a crisis that may have people raising that question. The short version is that we have a member company that made a big mistake. They’ve done some serious damage to their brand, and we’re very cognizant of the potential for that to do damage to our brand. And, of course, our brand is our most important asset.

LR: It is your asset. You’re the Good Housekeeping Seal of Approval for the twenty-first century.

TK: What we don’t want to become is someone’s green-washing solution. But I think one of the reasons we’re protected from that is, as you point out, one percent of sales is such a high bar. Only the most committed companies will join us. We would love to get to a point with this movement where it becomes valuable enough for the biggest companies in the world like Exxon to join.

LR: What is the largest company on your roster?

TK: Great question. And that leads me to another component of the business model. Most of our members are giving one percent of their total revenues, but we do have member companies that participate at the brand level. Sony joined a couple years ago with a green laptop brand that was associated with their VAIO laptop line. Sony looked at this and said, “This is something we want to support – maybe not at a big corporate level yet, but here’s a way we can lend our size and reach to a movement that we care about.”

LR: I bet there are people who give one percent who don’t even know that they could have your partnership.

TK: That’s exactly right. And up to 25 percent of the one percent can be through in-kind giving.

LR: What is your total budget?

TK: As an organization, it’s about $1 million annually [for] our operating budget.

LR: And that’s what you receive from all of your 1,200 members?

TK: Correct. Each one pays a small licensing fee. We started with a modest new structure because we wanted to encourage participation. We wanted to build the value that we offer to our members over time. And we think that’s happened. Each incremental member adds more visibility and awareness to the network, and that helps everybody else.

LR: What percentage of the one percent do you take for overhead?

TK: We’ve targeted no more than ten percent, but in fact we are closer to five percent. That’s where we think there’s room to expand and eventually become self-sustaining based on member dues.

LR: Do you believe the future is rosy, if not for the planet, at least for 1% For The Planet?

TK: I certainly do for the organization. You can choose between being a pessimist or an optimist, and I find it much better to be in the latter category. I’m focused on something that I believe can make a difference, and that makes me optimistic.

LR: If you’re not doing something for the planet, you don’t deserve to be in business. It’s basic to your being. So, I think what you’re doing is fantastic. I wish the very best for you.