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www.HartfordBusiness.com November25,2014•Hartford Business Journal 9 g i v i n g g u i d e 2014 www.HartfordBusiness.com November25,2014•Hartford Business Journal 9 Building the Bridge with Business I n the Hartford Business Journal's 2013 Giving Guide we published an article titled "Why Nonprofits Are Business's Best Friend." In that piece we discussed the common and uniquely American roots that nonprofits and businesses share, and emphasized the need for the business sector to recognize the important contributions nonprofits make to the community. In this article we will examine the relationship between the nonprofit and business sectors from a slightly different perspective, best demonstrated by the following remarks of Roberto Goizueta, Former CEO of The Coca-Cola Company (as quoted in the 1996 book by Michael Novak, Business as a Calling): [Given that] billions of shares of publicly-held companies are owned by foundations, universities and the like, one should never forget the multiplier effect in the world of philanthropy, and the benefit to society, that each dollar increase in the value of those shares brings about. If a foundation owns, let's say, 50 million shares of Coca-Cola stock, for each dollar that our stock price increases, that foundation will be required to give out an additional $2.5 million. Mr. Goizueta reminds us that it is business that produces the wealth that ultimately funds the operations of the nonprofit sector (and the government too) by way of donations of cash or property (or tax revenue the government redirects to nonprofits as grants or under service contracts). In other words, there is a symbiotic relationship between the nonprofit and business sectors; each is a necessary, but neither is a sufficient, condition to civil society. While, to one degree or another, both sectors understand the dependent nature of their relationship, it has never been free of a tension that in some ways reflects conflicting impulses in our psyche: we want assets to provide for our needs, security, and comfort, while also feeling the tug of the charitable organizations around us in need of resources. But the tension has deeper layers as well. In severe cases it is expressed as enmity that sounds like this: business people are all about making money for themselves and don't care about the less fortunate; or nonprofits are inefficient, have apparently unending needs, and never really solve any of the problems they address. There is also a moral undertone in the tension to the effect that charitable activity is awash in altruism, while the business sector is rooted in self-interest. Interestingly this tension has deep historical roots in Western thought, and at its core is based on the still lingering misconception (reflected in the teachings of thinkers such as Aristotle and Thomas Aquinas and to an extent in historical religion-based proscriptions on usury) to the effect that the amount of wealth in the world is fixed or limited, such that if one person earns a profit another person must suffer a corresponding loss. The term "zero sum game" refers to interactions in which there must be a loser for every winner, as opposed to a "positive sum game" in which the positions of all players can be enhanced. Business activity by its nature is a positive sum game — if an entrepreneur invents a new product that people want to buy, the profit is derived from the value buyers are willing to pay for the product. The word "invention" is derived from the Latin inventionem, meaning a finding or discovery — something new that did not exist before, as opposed to something that belonged to someone else. The current economic and political climate is infused with rhetoric and debate over issues such as equality and fairness, Wall Street vs. Main Street, minimum wage vs. living wage, high taxes vs. low taxes, and the like. These are important policy issues that impact nonprofits directly because they provide the safety net when unfortunate events occur. However these issues are not the subject of this article. The only point we want to make is that there is nothing inherently immoral or wrong in business activity as such, in the creation of wealth and value. This thought should inform the judgment of nonprofits as they contemplate their relationship with the business sector, and as they weigh their positions on the policy issues discussed in the previous paragraph. Again, Mr. Goizueta's remarks provide the reference point. Let us close with an observation and a recommendation. The observation is that human virtue and vice are constants shared in different degrees by all of us regardless of whether we work for a charity or a business. There are greedy and envious, honest and dishonest folks in both sectors — and rhetorical assertions to the contrary diminish the quality of the discussion and diminish prospects for an improved relationship. The recommendation is to read Business as a Calling. Michael Novak is a lay Catholic theologian with an understanding of business, and he articulates masterfully the importance of a healthy and de-politicized relationship between the nonprofit and the business sectors in which each contributes to the success of the other. Reid and Riege has been committed to our clients' success and guided by their priorities since 1950. Whether closely held businesses, large financial institutions, individuals or corporations, all Reid and Riege clients receive undivided attention, access to integrated resources, and legal solutions crafted to meet their business or personal objectives. We focus on the quality of the services we provide, the results we achieve for clients, our adherence to sound legal and business ethics, and the contributions we make to our community. Reid and Riege has principal offices in Hartford and New Haven. 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