A Mile Deep: A local “benefits corporation” gets strategic in its giving
From the time he was young—as in four years old—Davis Smith witnessed first-hand the challenges people faced in developing countries.
“One of my very first memories was seeing children, three or four years old, completely naked on the sides of the street,” says Smith. His family had moved overseas with his father’s work, and even though he was young, the impact from these kinds of experiences ran deep and would become a guiding force throughout his career.
While in college, Smith made a personal commitment that he would find a way to leverage business success to make a difference in the world. Now as CEO of Cottonwood Heights-based outdoor gear company Cotopaxi, Smith and Lindsey Kneuven, Cotopaxi’s chief impact officer, share their lessons learned in bringing together the power of mission-oriented business, capital, human compassion and purposeful adventure to ease poverty and improve health among communities that need it the most.
Wanting to do more
Just before founding Cotopaxi, Smith had been living in Brazil. But even though his business there was thriving, and even though he treasured the opportunity to raise his family in South America (where he’d spent much of his youth), Smith wanted to do even more. He says, “I knew I needed to leave. I didn’t feel like I could keep my promise to myself to make a difference, there.”
Smith returned to Utah, more determined than ever to create change in the world through his next venture.
Smith had learned from his previous experiences that it wasn’t enough for him to create a viable company and then decide where to give back. He wanted to weave the mission into the very core of his next company’s foundation. And having lived in countries where he had seen the devastating effects of poverty, he knew exactly what he wanted that mission to be: to alleviate poverty.
Rather than establishing the company as a C-Corp, he did something more unusual. In 2013, he founded Cotopaxi as a B-Corp (Benefits Corporation). As such, the company would be accountable to monitor its performance against its goals of inspiring social and environmental change. In other words, financial success and mission success would be directly aligned.
It wasn’t necessarily the most popular decision at the time. “I was told by an attorney I’d worked with for several years not to do it,” says Smith. “He said no one’s going to want to invest in a company that’s giving away money before you make money. But I felt like this was the way the business needed to be run. For me, it wasn’t just about donating our profits, it was really about inspiring other people.”
Scattered … or strategic?
Within its first couple years, Cotopaxi proved inspiration could equal success. With significant growth on the fiscal side, its impact on the social charitable giving side was also expanding. But Smith figured Cotopaxi’s “good” could get better.
At the time, the company was involved in several local and worldwide outreach efforts— primarily tying each of its products to a different developing country and dedicating a portion of proceeds to a specific nonprofit cause in that country. While this approach supported the mission of the company, the efforts were scattered. “We were a mile wide and an inch deep,” says Smith. “I was sure we could have a much bigger impact if we were doing this strategically.”
Smith went on the hunt for an expert who could help. He found her in California. Lindsey Kneuven had 15 years’ experience in the global philanthropy sector. She was then at Silicon Valley Community Foundation, an organization managing billions in philanthropic individual and corporate portfolios (for companies like Oracle, Travelocity and Singularity University).
Kneuven arrived at Cotopaxi ready to work. “I did a full assessment of the organization, the existing giving portfolio, as well as their vision, their structure, and the back-end systems you need in place to give well,” she says. She then helped the company drill deeper, to break down what poverty alleviation really meant to them.
“We honed in on health education and livelihood development. Once we had those pillars, we could create a pathway,” says Kneuven. “We needed to streamline, to make sure we were telling a consistent method and going deeper on a single issue rather than scattering. We found nonprofit partners that were really well aligned.”
Kneuven says that Cotopaxi has since established partnerships with Nothing But Nets, the International Rescue Committee, Proximity Designs, Educate Girl and Escuela Novela. The company is now moving to establish a foundation, with 2 percent of proceeds going to the foundation to fund corporate giving. And the company has expanded one of its original corporate-giving programs, Questival, which is a 24-hour race adventure in cities around the world, where teams of two-to-six people compete for prizes—and get involved in social impact efforts along the way.
Kneuven has some specific advice for other companies that want to give back. “To start, it’s important to assess your resources: What kind of financial commitment you’d like to make, what type of technology, product or service you have to offer that can provide benefits to nonprofits, what skill sets your employees possess that they can transfer to help with a more marginalized community,” she says. “When you can take stock of all of those and bring them together, you can go beyond the cash grant. I think that’s important because it sets the stage for deeper partnerships with nonprofits, engages your employees in those relationships, and you can give far more than you would with just cash giving.”