Foreword by Paul Newman

In 1994, Paul Newman was awarded his second Oscar. While a previous Academy Award had recognized his performance as an actor, the second tribute acknowledged Newman’s real-life role as a leading and ingenious philanthropist. In 1982, he founded Newman’s Own, a food company that contributes 100 percent of its after-tax profits to charity. In the fifteen years since its founding, over $90 million has been donated by Newman’s Own to charities around the world.

These charities include not only the seven international camps (the Hole in the Wall Gang Camp Association) that provide therapeutic camping experiences to children with serious and often life-threatening conditions but also hundreds of other charities in the United States and abroad. It is the policy of Newman’s Own to donate the profits from its business to nonprofit organizations operating within the countries from which the profits are derived—a policy that not only sells products but also encourages the further development of the nonprofit sector.

In his life and philanthropy, Paul Newman acknowledges the role of luck—the generosity of it in his life and the absence of it in the lives of many others. He is quick to voice his respect for the hard work, ingenuity, and leadership that typify the American business executive, but he also reflects on the luck of being in the American business environment in which these talents can flourish. It is an environment that in no small measure flows from the extraordinary partnership between business and the more than six hundred thousand organizations that make up the nonprofit sector.

A decade and a half ago, my friend A. E. Hotchner and I were both astounded and elated when we learned that people were actually buying Newman’s Own vinaigrette. We had every reason to be surprised—this wasn’t a business that was the fruition of an age-old dream or the product of some high-priced marketing study. It started as a kind of a joke, but it ended up giving back in satisfaction much more than we gave.

Our surprise over the success of our business has been dwarfed by something else—the discovery of what can happen when a line of food products is mixed with a hefty dose of creative marketing and then sprinkled on an assortment of social needs.

I am delighted that Newman’s Own has found a niche in one of the toughest industries around, the grocery trade. I’m even more delighted that our products have generated over $90 million in donations to charities in the United States and other locations around the world. This business has taught me a lot of lessons but none more important than demonstrating how, with a little effort and imagination, commercial enterprise can have a powerful influence on society.

Newman’s Own gives away every nickel that drops to the bottom line after taxes. I completely understand why most other companies cannot replicate our unusual economic business model. For publicly held corporations and most private enterprises, the profit motive is essential. However, here’s the problem: too many businesses are at the opposite extreme of the generosity continuum.

Besides paying taxes, companies are inclined to set aside little or nothing at all to address issues and problems on the other side of the company property line. Giving money or product to a nonprofit is too often seen as an erosion of shareholder value. Contributing money has become, to many businesses, equivalent to giving an edge to a competitor that keeps its purse strings tightly knotted.

Along comes Corporate Social Investing. This is a book worth reading because it establishes important rules of the road for corporations. The ten-step plan described in the book creates a common denominator for every business, no matter how big or small. The standards seem reasonable and appropriate for any company in any industry segment. The plan should go down easy, even for the most profit-driven businessperson in the country.

This book reminds us that corporate contributions when measured as a percent of profits have been on the decline for a long time. The concept of corporate social investing is the tide-turner. If companies buy into the plan (and they should), corporate social responsibility rises to a new level. Corporations have at their disposal a management plan that will enrich their own businesses and at the same time do a lot of good for people and places that need their help.

It is important to keep in mind that corporate social investing isn’t just about how much cash and product companies strategically place with nonprofit institutions. In the end, it is also about leadership, social values, and the health and well-being of an extraordinary phenomenon called the nonprofit sector. From our great universities, cultural institutions, hospitals, and research centers, to local environmental groups, library committees, and homeless shelters, America (and increasingly other countries as well) is a nation of innovative and high-quality alternatives. Keeping in mind that the nonprofit sector has played no small part in sustaining one of the most favorable business environments in history, corporate leaders would do well to include its nurturing as an important strategic business objective.

Whether a company sells cars, airplanes, financial services—or salad dressing, it makes good business sense to preserve and enrich the nonprofit sector. Corporate social investing gives corporations an opportunity to take one more step in what is definitely a mutually beneficial direction.