Social Values, Shopping Merge in ‘World of Good’

November 6, 2008 at 6:45 PM EDT
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Since 2004, the company World of Good has helped merge consumerism and social consciousness by partnering with retailers to market fair-trade handcrafted items. Spencer Michels reports on the business of combining social values, opportunities for artisans and shopping.

PRIYA HAJI, World of Good: This is a really cool project, though, because it’s actually a program that was started by a young man and his wife to help women get out of prostitution.

SPENCER MICHELS, NewsHour correspondent: Priya Haji runs an American company that sells these messenger bags made by a local handicrafts project in India and other handmade goods from around the world.

Like any entrepreneur, she wants to set sales records and improve her bottom line. But for Haji, the measure of success goes beyond how many purses and pieces of jewelry she can sell to American consumers; her plan reaches worldwide, deep into poor communities.

PRIYA HAJI: Primarily, it employs people who are not educated, haven’t been to school, and probably either rural or urban poor. And so by creating employment for them and helping them create sustainable livelihoods, they can then invest in the education of their children, improve their community.

SPENCER MICHELS: Haji, at 38, is the CEO and co-founder of World of Good, a privately held for-profit company based near San Francisco that seems more like a non-profit.

The company’s goal is to empower and enrich poor women in hundreds of communities using business techniques that Haji learned while studying for her MBA at Berkeley and social values instilled by her parents.

PRIYA HAJI: My mom is from India; my dad’s from east Africa. And social justice, I think, is really a part of the way I was raised.

My dad and I started a free clinic when I was in high school, so I learned how to be an entrepreneur from him. And then when I got into business school, it was really with the idea of, how are we going to use business to do good?

Using Internet as marketing tool

SPENCER MICHELS: While World of Good is out to improve working and living conditions in poor nations, it also is beholden to its venture capital investors. Haji believes she can make a profit and still benefit the poor.

PRIYA HAJI: Doing it as a solid business helps everyone more. And certainly making sure that the producers are paid fairly is absolutely core to making this work.

SPENCER MICHELS: The producers are mostly women in third world countries like Vietnam, who make items like these bamboo plates by hand. They normally would sell a few of them for very little money in local shops.

But World of Good, working through local producer groups, is buying the products and selling them at 1,500 retail outlets in the U.S. This display is at a Whole Foods grocery store.

In addition, the items are sold on the Internet, which is a far larger market than producers could ever reach before.

World of Good recently partnered with eBay, the online auction and sales site. EBay manager Robert Chatwani was visiting family in India admiring handmade jewelry when he came up with an idea.

ROBERT CHATWANI, eBay: How can these artisans and producers connect to a global marketplace? And why can't they be on eBay, just like millions of other consumers and sellers are?

SPENCER MICHELS: A friend introduced him to Haji, and he realized they were on the same page.

ROBERT CHATWANI: We crossed paths and realized almost instantly that we should be working together. We no longer have to think about shopping and giving as mutually exclusive.

SPENCER MICHELS: In 2005, they joined forces using technology to connect sellers in undeveloped lands to buyers with computers. Today, eBay lists thousands of items from World of Good and other so-called ethical artisan groups.

Chatwani points to this scene in India as an example of how one group fights its own poverty, turning garbage into salable products.

ROBERT CHATWANI: It's a group of women who actually collect plastic trash bags that are littered on the streets of Delhi. And as opposed to these products and the trash essentially ending up on the streets and sewers, they collect them, wash them, melt them down into strips, and make these beautiful accessories and bags out of that plastic.

Some profits reinvested locally

SPENCER MICHELS: eBay and World of Good, plus some other companies, have pioneered the use of fair-trade practices for handicrafts, standards that ensure workers are treated and paid well.

The nonprofit arm of World of Good has developed an online wage guide to figure out what is a fair payment to workers in poor nations. The whole process works, says Haji. She cites as proof the Kisii region of Kenya.

PRIYA HAJI: Through these products that they carve, not only are they employing hundreds of people; they've been able to more than double the number of products that they sell; plus, they've been able to reinvest in adding wells to their community.

Instead of walking every day to collect water almost three miles away and then back, they now have these wells right there in their community. And now they're starting to build an education program for their children.

SPENCER MICHELS: But making money and doing good is not an easy combination, although a lot of companies are trying, says Eric Carlson.

ERIC CARLSON, Santa Clara University: Yes, I think in general it's taking off big time, but...

SPENCER MICHELS: Carlson teaches a class for social entrepreneurs at Santa Clara University, after having worked at several high-tech firms in Silicon Valley.

ERIC CARLSON: So the risk is high today that you're going to actually succeed in accomplishing both a social mission and make enough money doing it that you can live while you're doing it.

Cultural understanding is crucial

SPENCER MICHELS: Carlson estimates that perhaps 10 percent of social entrepreneurs make it. Some fail, he says, because a third-world country may not welcome foreign involvement.

ERIC CARLSON: Most social entrepreneurship takes place in a place where the government may not be for you. In fact, they may be actively against you. We've had entrepreneurs who've had to move their business out of the country because of threats on their life.

SPENCER MICHELS: He says culture may also be against the entrepreneur.

ERIC CARLSON: The society will say, well -- for example, Arab countries or sometimes in South America, you're trying to do this project to empower women. Well, culture isn't for that, and the men don't like that happening.

SPENCER MICHELS: World of Good says it has not encountered those problems because it teams up with established local groups. While Carlson thinks the World of Good model may be viable, he says competing demands could undermine for-profit, do-good ventures.

ERIC CARLSON: If the investors start saying, "Well, I've got to make money out of this, too," it's going to be difficult, because there's not enough value in the chain to support both the high return to the investor, and a high return to the employee, and a high return to the producer.

SPENCER MICHELS: Priya Haji doesn't see a conflict. And while she won't disclose World of Good financials, she says sales growth is very strong.

PRIYA HAJI: What we've actually found is that there are millions of customers that are looking, not only for global style and cool products, but for products they can feel good about buying.

SPENCER MICHELS: With the holidays approaching, World of Good and other ethical retailers are hoping to increase their so far tiny share of the $55 billion U.S. gift market.