Notes from the Social Enterprise Field: Nortel and One Laptop Per Child

Last week brought the news that Nortel is withdrawing its support for One Laptop per Child. Nortel had been one of the program's major sponsors.

While Nortel's bankruptcy is a primary reason for this action, we should not let the fact that the company's precarious financial condition distract us from the broader lessons.

Above all, Nortel's withdrawal is a potent reminded that commercial support for social enterprise is to a significant extent a symptom of a bubble economy. Charity is a luxury good that companies may believe they can no longer afford.

While academics and assorted do-gooders have touted the financial benefits of supporting social benefit, the recession highlights the extent to which such assertions lack concrete evidence. Nortel's sponsorship would no doubt have continued had OLPC been perceived as a profit point. Instead, the charity would seem to have been a drain.

Also worth noting is the dog that hasn't barked--namely, the relative lack of support from companies invested in their own netbooks. As this article notes, netbook makers are focused on profiting from their own ventures rather than supporting a charitable competitor.

This raises an intriguing possibility regarding the longterm impact of successful cause-marketing joint ventures. For much of the past decade we have treated cause marketing as an adjunct of social enterprise. However, we could just as well argue that cause-marketing partnerships are more likely to benefit charitable ventures that have little to no prospect of acquiring significant commercial market share, especially in the sphere occupied by their commercial partners. From a Darwinian perspective, the long-term impact of cause-marketing joint ventures could actually work against social enterprise--in particular, ventures funded primarily through earned income and innovative charities that could potentially undercut commercial products.