“People take it for granted that the human race is immune to extinction. We’re not”.
Paul Polizzotto isn’t talking about the coronavirus, but about less specific yet very real threats. “People are getting angry, about climate change, about healthcare, inequality”, so time is short to address these challenges. “Rome is burning”, he claims.
At heart though, he is an optimist. “I have faith in humankind,” he says. He points out that we’re in the middle of huge change where entire industries are being “flipped” by disruptors such as Airbnb and Amazon. So, if this can happen in huge industries, why can’t we bring similar innovation to our own society and its major problems?
Polizzotto’s contribution involves launching Givewith in 2016, with the aim of “being the first technology to link commerce directly to the UN SDGs”. The “commerce” Polizzotto refers to involves all the money spent by and exchanged between businesses. Givewith in effect aims to channel a very small percentage of those tens of trillions of dollars that are transacted between organisations (an amount that would still represent a huge sum in total) towards “people in need”. This means supporting some of the causes we describe under our various Procurement with Purpose headings.
His story in terms of this idea goes back to 1999, when he kicked off an initiative to take a proportion of the money spent by large advertisers with media firms to provide social benefit; for instance, by funding solar panels for communities. The work won awards and the idea was picked up by mayors of cities around the US, and he ended up agreeing to a joint venture with media giant CBS.
Polizzotto can sound somewhat metaphysical once he is in full flow. “If your business model is not in harmony with the universe or nature, not only will fail, but it will ultimately cause harm”. He saw leveraging advertising spend as a way of “harnessing human conversations between both brands and consumers, as well as media companies and viewers, to improve people’s lives”.
But the hippy in him is balanced with a strong business brain. With CBS, he harnessed this energy to fund critical projects like installing solar panels to Miami City Hall – the first large city City Hall powered entirely by solar energy. “And it was solely underwritten by business-to-business transactions,” says Polizzotto. This proven model was ultimately able to direct more than $100 million in new funding and resources to environmental, education and community health and wellness programs across the U.S., improving the quality of life for nearly 60 million people.
He also showed that advertisers and the media firms would achieve a much wider range of business objectives and benefit from enhanced reputations with the consumer if they were seen to support these wider goals (a theme which runs through much of this book, of course). “We have to show corporations that by underwriting social impact, they will positively influence their sales, profits and share prices.”
His move to develop Givewith was a case of taking what had worked with one firm (CBS) and one industry (advertising) and looking to scale that across all sectors and geographies. And the sky is the limit really - he calls the huge sums of money transacted between firms as “Lake Abundance”. His philosophy is that if the process is executed properly, you can take “as much as you want” from Lake Abundance to support social action, as corporations will see their own financials improve because of the knock-on benefits of what they are doing.
“The trickle-down economic model has never worked,” Polizzotto says. “We need innovative business models that open up new, healthy and sustainable streams of funding to support the most important issues of our time. Firms realise that their ESG (environmental, social, governance) ratings play into investment and capital allocation decisions today – that may be just as important as the consumer push on companies. There are trillions of dollars being invested in socially responsible businesses and ideas”.
Suddenly, Polizzotto is sounding very much aligned with Russell Picot (see our interview here), who talks as a global accounting expert about how corporate financial reporting requirements can drive sustainable behaviour. More synergy; Polizzotto also talks about understanding which social impacts create the most value through a financial materiality assessment, so buyers can decide where they can best channel resources from procurement activities. That is exactly what David Shields (see here) and other leaders in the UK public sector are looking to do in terms of using the Social Value Act to drive wider benefits from government procurement.
So Givewith maintains a database on not-for profits, social enterprises, NGOs and social impact organisations on which social impacts create the most business value, and their platform helps firms match their programmes with the issues their shareholders and customers care about most. Polizzotto sees firms increasingly measuring the success of these programmes against multiple KPIs, including employee engagement and retention, investor relations, corporate social responsibility, sustainability, as well as customer facing metrics. He quotes cases where a social investment of $20,000 linked to a contract creates six-figure sums in benefits - for both the buyers and suppliers.
Givewith is also integrated now into the SAP Ariba platform, so buyers can “embed social impact directly into their sourcing process to generate unprecedented business value and new funding for the world’s most effective non-profit, social enterprise, and NGO programs.
“When the Math is undeniable, then success is inevitable”, and he also mentions the benefits this sort of initiative brings to procurement professionals and functions. It can “elevate procurement’s strategic importance” (something else that comes up in many of our discussions).
And the final word – “It is incumbent upon us as innovators and entrepreneurs to show corporations how improving the quality of people's lives and taking on the most pressing issues of our time, can drive sales, profits and share prices”.