Obama’s State of the Union Encouraging to Some States in the Union

Obama’s State of the Union address (transcript) last night was largely a call to action across many sectors of the nation.  Although a message of change is hardly new coming from the Administration, some specific plans laid out in Obama’s speech are encouraging to small businesses and budding entrepreneurs.  In particular, Obama proposed using ~30B of the returned bank bailout money to establish a fund designed for loans to small businesses in order to increase liquidity in a sector that currently faces trouble obtaining credit from larger banking institutions.  Obama also proposed tax credits for small businesses that hire new employees, or raise the wages for existing employees during 2010.

While these plans must first traverse Congress in order to become a reality, some states are cautiously optimistic that these programs could help them recover their economies, particularly in the area of job creation.  Indeed, in Michigan, the proposed business incentives, along with Obama’s continued focus on green energy, have given some hope that 2010 may help the state combat it’s unprecedented unemployment rate (currently at ~15% in some estimates).

Gates Foundation Releases 2010 Letter

Bill Gates, perhaps one of the best known names in modern philanthropy has released a statement regarding the goals and ambitions of the Gates Foundation going into 2010.  A must read for anyone curious about some of the major philanthropic projects as we move into an uncertain future.  The statement also highlights Gate’s conviction that the way forward will require innovations – in science as well as the private industrial sector.

True Social Commitment

While the rise of social entrepreneurial ideas is beginning to blur the lines between social objectives and business development, this same cultural shift can make it difficult to determine the ‘altruistic merit’ of a given corporate action.  While good projects can be good for society, the corporate image, and even the bottom line, how does one determine the commitment of a brand to creating positive change?  It is a difficult question, and one that I hope to address more formally in later posts as well as in an ongoing, piecemeal fashion throughout many smaller discussions and examples.

Much like the organic movement and rising awareness of environmental impact has generated “greenwashing” tactics in many companies eager to appear eco-friendly, rising consumer awareness and social media outlets are generating temptations for some companies that wish to promote their image (or merely avoid criticism) through well-publicized donations or events.   While this is not a new tactic, and we can all still benefit from a business community that is more attuned to their public image, one concern is that such tactics can erode the image and meaning of social entrepreneurship if the term comes to be applied too loosely.

To take an easy point-in-case,  Goldman Sachs has been considering requiring its investment bankers to make a one-time donation of a portion of their bonuses that will be awarded this year.  Following a year that was dominated by economic turmoil caused largely by unsafe practices at many investment banks, the motivation is blatantly obvious.  Sachs is trying to appraise the thickness of the PR blanket that they could generate from such an action, and calculate how much protection it might provide from a public that is outraged by exorbitant Wall Street bonuses laden on top of already cushy salaries.  Criticism was already forthcoming, even prior to the announcement of the Sachs’ bonuses (averaging ~500K per employee).  As this level of bonus was already proclaimed as “restraint”, its unclear if Sachs is still considering their donation deal, despite widespread public condemnation.

Nonetheless, the example helps to illustrate a core value of all social enterprise; that it must be a sustained effort for social good.   While even charitable acts that are designed mostly for PR can provide common good, one of the first indicators of a social enterprise is a continued commitment to social projects over time.