During his M.B.A. studies at University of California at Berkeley, Jeff Denby told everyone his ultimate career goal: to start an underwear company.
Soon, professors and classmates at the Haas School of Business began to call him 'the underwear guy.'
But Mr. Denby -- who had formerly worked in industrial design and went to business school interested in supply-chain management -- decided early in his program that he wanted to create a company that was about more than just boxers or briefs. In his view, it was critical to create a product that was environmentally friendly and sustainable -- and whose sales could help support good causes.
This type of social entrepreneurship -- that is, building a for-profit company with a social conscience or linked with a social cause -- is becoming increasingly attractive to would-be business founders. The idea is to make money while either directly impacting consumers with its services or funneling a portion of profits to charities. Often, these companies employ people or source resources from economically depressed areas of the world.
And with an increased interest in socially responsible money-making, business schools have been pushed to create a whole host of courses and study tracks to help M.B.A. students sort out the best way to pull it off. Schools like Oxford University, Cornell University and Dartmouth College have all seen increased demand for instruction in social entrepreneurship.
Some administrators say it is a generational progression of business-school students who have grown up socially aware. Others say a lack of traditional jobs has spurred an interest in entrepreneurial ventures -- and the focus on societal impact is partly a matter of trying to escape the stigma of the 'greedy M.B.A.'
'I think the interest in entrepreneurial ventures with social value [is about] more than the fact that people can't get jobs as easily,' says Colin Mayer, dean of Oxford's Said Business School in the U.K. 'There's also a sort of underlying sense of guilt about what happened during the crisis.'
For his part, Mr. Denby, who graduated in May 2008, has long wanted to use his business skills for good. Before Mr. Denby launched PACT Organic Underwear as an online-only company in August, he researched all aspects of manufacturing and distribution to make sure his products would be legitimately sustainable, from the labor he employed to the inks used in the garment dye. Then he decided to pair each pattern used on the underwear with a themed charity. For example, 10% of the proceeds from one blue pattern inspired by a Japanese woodcut, go to a marine-conservation group.
Mr. Denby says his entrepreneurial spirit was fostered by Berkeley's curriculum. In one social entrepreneurship-focused course, guest speakers would make weekly appearances to discuss their for-profit business models. Mr. Denby also enrolled in a start-up workshop where students 'spent a lot of time figuring out who we wanted to work with,' he says.
At Oxford's Said Business School, students use the Skoll Centre for Social Entrepreneurship to insert these concepts into their business plans.
Recent projects include building water-purifying systems in Africa and developing Internet banking systems in regions without significant technology infrastructure. Oxford has offered electives in social entrepreneurship through the center for years but recently expanded its options.
The school also provides a venture fund that students can tap to fund worthy projects. In those cases, the school has a stake in the company -- and its success -- says Mr. Mayer, adding that the increased focus among students stems from the dearth of traditional jobs in finance, as well as the malaise surrounding the economic collapse.
'There is a real sense that doing good business can promote real change in economically depressed regions,' Mr. Mayer says.
What's more, a for-profit enterprise with a socially responsible backbone is more attractive to nervous investors during economic turbulence than traditional business plans, argues Gregg Fairbrothers, director of Dartmouth College's Entrepreneurial Network at the Tuck School of Business.
'Financing is tough for start-ups,' says Mr. Fairbrothers. 'For investors to take a risk with you, it helps to have tangible social good coming from it, not just the promise of a fat IPO that will make everyone rich.'
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