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Altruistic Capital or how to conciliate profit and commonwealth 23 octobre 2008

Par Thierry Klein dans : Altruistic Capital - in english, Posts in english.
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(This article refers to a paper on Le Monde about Supercapitalism) I’d also like to thank you ‘lv’ for having pointed another article on the WSJ describing Bill Gates’ take on this topic.

As Bob Reich states it’s indeed pointless to expect from businesses a moral conduct. It’s not their purpose and those who claim to act towards a commonwealth are being hypocrite – subconsciously or not – or else according to the conventional free market theories, end up loosing in efficiency thus benefiting their competitors and at the same time doing more harm than good to the causes they were supposed to uphold.

On their part businesses that choose to assume the altruistic capital form don’t commit to following any specific moral guidelines – also known as a modern moral censorship already denounced by Molière. Those companies simply decided at some point of their development to donate a share of their capital to the Humanity, embodied/represented by the NGO they decided to support.
The Association/Non-profit “Altruistic Capital” supports the creation and the development of as many altruistic businesses as possible. Over the long term our goal is to see the altruistic economy become a significant part of human activity.

The size of the share allocated by a company to a NGO can vary quite a lot. Some entrepreneurs may donate 1% or 10% of their capital on the inception of their startup; other projects mainly constituted by volunteers but having gained a commercial value may incorporate and decide to give most of their capital away to a NGO (this is typically the case in some IT fields, such as for “Open Source” projects); some altruistic investment plans may choose to concede a few tenths of a percentage point from all their investments to a NGO.

The main benefit of the “altruistic capital” concept is the unquestionable reality of the donation: it’s not a one-time sponsoring episode, nor a simple communication stunt to convey a social image to the company’s customers or employees, much less a special promotional event to improve on the sales of some product by luring consumers into believing a share of the proceeds will be donated to a charity.

No matter how small the percentage, this donation is permanent and its value follows the development of the business itself. The positive outcome of the said donation would depend solely on the NGO. (An altruistic company could perfectly well have a reprehensible conduct according to the values of the NGO it supports. In a free market this conduct would eventually benefit the NGO through the increase of the company’s capital).

The future depends on the donation of capital, “There is more money generated each second on the market than any government can dispose of in a year”, rightly explains Al Gore – and to suggest that a carbon tax should be enacted. The problem here is that the more world globalization progresses, the less such taxes are efficient or even enforceable. Let’s also point out that contrary to Al Gore’s concept altruistic capital caters to any of the globalization downfalls and not only global warming. Its impact is universal since the field of the NGO depends solely on the donators’ choice.

The tools offered by the Altruistic Capital are compatible with freedom and democracy. The founders – or shareholders – choose their cause and their involvement level. Governments may also support this form of intervention by offering special incentives to altruistic businesses.

Altruistic companies may – should – make their status known amongst the community (customers, investors, employees…) so as to generate a new dynamic and maximize the positive ramifications of their capital donation (in terms of free marketing exposure, image betterment both internally and externally, etc…). One of our association/non-profit goals is to assist altruistic businesses in this recognition task (creation of certifications, etc) so that shareholders may find an actual interest in adopting this concept, and this whatever their true motivations may be, philanthropic or not. At this point the battle would be won over since a share of the world’s economy would be working for the benefit of humanity.

Altruistic Capital is not a form of altermondialization. Altruistic Capital may be described as a form of development that uses the exact same dynamics as globalization to gear it towards a better outcome. Sun-Tsu rather than Marx. The amazing progression of another form of humanitarian action over the last 30 years, microfinance, is based on a similar concept.

To sum it up there is nowadays a democratic/civil deficit with on one hand the deep-set interests of humanity – our aspirations - and on the other hand the economic downfalls of human activity itself. In this struggle we all have a schizophrenic attitude of sorts, being the engine of globalization and trying to slow it down at the same time. A growing number of people, including entrepreneurs and employees, wish to act but have no idea how to. Altruistic Capital would perfuse a dose of sympathy – Adam Smith’s own term – in the great scale that governs global balance.

Being myself an entrepreneur, I’m able to observe how much more straightforward the development of an altruistic company can be. This form of intervention opens the doors to benefits a normal startup doesn’t have access to: it makes up for the higher pay and the safety net provided by a larger company. The agreement over our goals also strengthens the company much more than a conventional mission statement made of intricate gibberish. Altruistic capital does more to support the development of my business than venture capital – it dilutes my capital less and provides me with a greater sense of satisfaction.

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