NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, February 8, 2011

Jeffrey Church and Mike Stone started a bottled-water business not to get rich, but to do good.

The two San Diego businessmen, who met at Harvard Business School, established Nika Water after Church took his family on a working vacation to Africa to build schools and water systems.

“My family and I liked what we saw,” Church said. “When we got back, my kids really wanted to do something rather than raise money through a bake sale.”

The result was the formation of Nika Water, which is among a growing number of for-profit businesses created to generate money for charity. Its proceeds go toward building wells in Kenya, Uganda, Nicaragua and Sri Lanka. Neither owner accepts a salary, and Church said that the project is helping him to teach his four children about running a business.

“We also thought it would be great to do it in a manner that just through the consumption of a product, you could be helping to bring clean water and eradicate poverty,” he said.

If the business model sounds familiar, that’s because it’s modeled after Newman’s Own, the salad-dressing line established in the 1980s that donates 100 percent of profits to charity.

Today, there are social entrepreneurs around the world and many share best practices through groups such as Ashoka and the Social Enterprise Alliance. San Diego County is home to several for-profit businesses that send a significant portion of their revenue to charity, including Nika Water and two clothing companies, Jedidiah and barley & birch. The success of Newman’s Own was a catalyst. The Westport, Conn., operation has generated more than $300 million for various causes through a diverse line of products that now includes everything from frozen pizza to packaged cookies.