Michael Moore is coming out with a new documentary titled Capitalism: A Love Story which explores the root causes of the global economic meltdown and takes a look at the corporate and political shenanigans that culminated in what Moore has described as “the biggest robbery in the history of this country” – the massive transfer of U.S. taxpayer money to private financial institutions.

While Capitalism: A Love Story looks at the financial collapse, other documentaries such as The Corporation “looks at the rise of the corporate body as having the legal status of a “person” — albeit with no conscience — and its collective psychopathic raping of the planets’ people and resources due to a greed-based bottom-line motivation.”

Milton Friedman has argued that a corporation’s purpose is to maximize returns to its shareholders and that these individuals can and should have the social responsibilities to do good (not the corporations).  We highly disagree.

But within both these documentaries, we can see the enormous negative result when corporations focus on one bottom line — profit.  In The Corporation, they reveal that “a disturbing diagnosis is delivered: the institutional embodiment of laissez-faire capitalism fully meets the diagnostic criteria of a psychopath.” Symptoms include the “callous disregard for the feelings of other people, the incapacity to maintain human relationships, reckless disregard for the safety of others, deceitfulness (continual lying to deceive for profit), the incapacity to experience guilt, and the failure to conform to social norms and respect for the law.”

Pretty scary huh? Enron, Worldcom, sweatshops, and Madoff are great examples of this psychopath behavior and the consequences that result from it.

Most critics argue that corporations should have some “responsibility” to society. That’s all good and well, except that the form that currently takes is pretty weak (some charity here and there, looking at supply chains at best).

At this point, we believe that corporations need to focus on “innovation” (not responsibility) and really think about doing well by doing good. Why do we think that’s possible? Because business is run by people and, you may call us optimistic, but we believe people are inherently good. The problem is that, while the law considers corporations “individuals”, they’re not. Legal structures don’t inherently have morals. So, why don’t we start treating corporations as what they are (groups of people) and not as a separate entity?  And why don’t corporations start looking at their impact over multiple bottom lines to make a difference in the world?

Wikipedia defines CSR as “a form of corporate self-regulation integrated into a business model.  Business would embrace responsibility for the impact of their activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere.”

Good description of CSR but let’s list out the current insights with corporations (all pulled from different articles we researched):

1)  Most companies feel compelled to give to charity. Few have figured out how to do it well.
2)  Any business that pursues its ends at the expense of the society in which it operates will find its success to be illusory and ultimately temporary.
3)  Corporations can use their charitable efforts to improve their competitive context —the quality of the business environment in the location or locations where they operate.
4)  Corporations need to rethink both where they focus their philanthropy and how they go about their giving.
5)  The most effective method of addressing many of the world’s pressing problems is often to mobilize the corporate sector in ways that bene?t both society and companies.

So, what if we shifted the focus of CSR to CSI (Corporate Social Innovation) based on these three I’s?

1)  Innovation, not Responsibility:  Looking at how corporations can come up with new and better solutions in an exponentially changing landscape to provide more value.
2)  Impact over multiple bottom lines, not just one:  Measure impact over people, profit, planet.
3)  Investment into the long-term, not charity:  Integrating budgets from “cause or CRS based” initiatives into innovative infrastructures that leverage the core competencies of the business to create real and much bigger change than one-off donations.

If you look on Goodness500, you’ll see that corporations such as Nike donated over $22,000,000 (1.0% of their profit) to different charities in the past year.  We’re the first to support non-profits but there has to be a more efficient and effective way to spend that money right?

What if Nike utilized that money to create a CSI initiative that 1) achieved their business objectives, 2) drove revenue, 3) raised awareness with customers, and 4) made a long-term difference in the world?  What if they took that money to support organizations such as 9th Ward Field of Dreams and The Girl Effect (which they already are)?  What if they measured the impact over profits, people, and planet?  What if they took a cue from FeelGoodz and supported sustainably produced shoes by hiring and fostering female entrepreneurs instead of using cheaper, faster labor?  How powerful would that be if it was able to decreased their production costs in the long-run or, better yet, change the mindset of their consumers?  As you can see, the opportunities are endless for corporations to “innovate.”

One of our favorite examples would have to be the partnership between Grameen and Danone.  Grameen Donane has been designed to provide children with many of the key nutrients that are typically missing from their diet in rural Bangladesh.  According to Wikipedia, “Grameen Danone Foods will reduce poverty by creating business and employment opportunities for local people since raw materials including milk needed for production, will be sourced locally. The companies that make up Grameen Danone Foods Ltd. have agreed not to take out any of the profits out of the company. Instead they will invest these for creation of new opportunities for the welfare and development of people. Hence it is called ’social business enterprise’.”

If we believe that social entrepreneurship is taking off around the world, imagine what the world will look like if corporations starting innovating as well?  The combination of top-down and bottom-up innovation can be tremendous — real social impact.

Michael Karnjanaprakorn is the Co-Founder of All Day Buffet.  You can follow his updates on Twitter.