For companies to attain the financial portion of the 10 Percent Solution certification standard, clients donate 5 percent of their pre-tax profits or 1 percent of sales to charitable causes of their choice (1 percent For the Planet companies qualify). When observed from afar, 5 percent may seem like a subjective number. However, it is the gold standard in the social responsibility arena. It is also a number small enough to avoid a negative impression on a healthy company’s financial performance, yet a number large enough to make a substantial result in a non-profit’s mission accomplishment.
Unlike most companies, Nau, Inc. started their donation programs from birth. For every online product purchase, Nau would donate 5 percent of the total sale to the customer’s choice of one of twelve charity partners. To support the 5 percent of sales theory, Nau created a video, “The Power of 5 Percent,” which demonstrates the compounding effect such a small number, on an individual level, can have on the world if a few companies donated 5 percent of their sales.
To continue with Nau’s observation of the effect of 5 percent of sales from the entire Fortune 500 list or $500 billion, think of the massive social change that would occur if that amount was split evenly among the 5,330 charities Charity Navigator, a non-profit evaluator, tracks. Each non-profit evaluated would boost their annual budget by $93 million. Imagine the number of scholarships, AIDS education and prevention counseling programs, immunization shots, cleft-palate surgeries, cataract surgeries, and after-school programs that could be created, distributed, implemented, and conducted. It is exactly this reason 10 Percent Solution believes every company should give 5 percent of their pre-tax profits to charity, as it would be a staggering catalyst of change for good in the world.
Sadly, this past spring, Nau closed its doors due to the risky financial market environment in which investors were skeptical in supporting a paradigm of business. However, by summer, Horny Toad stepped in and took Nau, Inc. under its wing and is supporting the company so it can get back on its feet again. Horny Toad has a similar community based culture as Nau, likes to take part in environmental sustainability, and has an amazing dedication to engaging their employees in developing the community through their Planet Access and Search for Adventure programs. Both are programs that work with Search Development Center, an organization that houses and trains developmentally disabled adults.
Nau, Inc. is back, albeit via baby steps. This gives us hope for more from-scratch pure socially responsible businesses in the future and confidence that companies like Horny Toad will come out and support the new kids on the block.
Posted by Jamie Welsh
