Is Business the New Charity?

In my recent interview with Jim Koch , founder of Samuel Adams (Boston Beer Company), he reflected on the traditional philanthropic activities of his company and peers. What he saw was uninspiring. Companies were simply taking money from their pocket and putting it into the pocket of their favorite charity. There was no value creation.

After this epiphany, Koch partnered with a strategic philanthropy-consulting firm and in 2008, he launched a program called Samuel Adams Brewing the American Dream . Rather than give money to nonprofit organizations, this program makes small business loans to small food, beverage, and hospitality businesses in South Boston, and couples them with pro bono coaching, mentoring, and assistance from his team.

He hopes that by supporting small businesses instead of nonprofits, he can create jobs in the community, and real long-term economic and social value in South Boston.

Here’s the rub. While job creation is important, there is a much greater need for employee creation. By 2016, four out of ten jobs will require advanced education or training, and many hiring managers are finding that the talent they need is hard to find.

If we want to see more Americans gainfully employed–not in jobs, but with living-wage careers–we need to invest more in the nonprofit sector and in government programs. While these investments don’t create the short-term gains that business leaders have been trained to seek, they are what will matter at the end of the day. They will create the supply of talent needed for our economy and society to thrive.

Read the full article at the Stanford Social Innovation Review.