Laura S. Scher (MBA '85) is something of a modern-day Robin Hood, an entrepreneurial activist who redistributes the wealth of the marketplace to those in need. Through her company, San Franciscobased Working Assets Funding Service, this CEO and crusader for social justice has been turning revenues into a much-needed windfall for a host of cash-strapped nonprofits.
Since cofounding Working Assets in 1985, Laura Scher has helped the company channel nearly $20 million to organizations such as Greenpeace, Oxfam America, Amnesty International, Planned Parenthood, and the Children's Defense Fund. Most of the money is taken from revenues generated by the Working Assets credit card, long-distance telephone, and Internet businesses, whose customers sign on for these services because they support the company's progressive stance and the organizations it benefits.
"We provide a way for people to become effective activists and philanthropists through their everyday activities, at little or no cost to them," explains the friendly and low-key Scher, seated in an office whose walls are lined with posters and photos from scores of organizations her company has helped. "As our mission statement says, we're all about building a world that is 'just, humane, and environmentally sustainable.' "
On this particular day, the petite, dark-haired Scher is wearing a business suit "I'm hosting a public event later today," she explains but her customary attire is casual and down-to-earth: jeans and T-shirts. Going against the corporate norm is nothing new for Scher, who shunned the usual perks and salary an HBS graduate typically commands in favor of the glamourless, risky, and low-paying job of starting up a company that wasn't dedicated to making money above all else.
Despite the dire predictions of those who warned that a company whose bottom line wasn't the bottom line could never survive, Scher has molded privately held Working Assets over the past 15 years into a business with 500,000 customers, 100-plus employees, and revenues of $140 million last year. It has also been named five times by Inc. magazine as one of the country's fastest-growing enterprises. "We proved the critics wrong," Scher says with humble satisfaction. "Working Assets is a successful company that's not afraid to take a stand on controversial issues such as protecting a woman's right to choose, supporting gay and lesbian rights, and saving the rainforest. I'd like to see more companies copy our business model and become advocates for social change."
Working Assets' charitable-donation model, thought to be the first of its kind, was the brainchild of Peter Barnes, a founder in the 1980s of the socially responsible Working Assets Money Market Fund. Working Assets Funding Service emerged from the fund entity in 1988 and now operates various enterprises, with telecommunications as its core service. The company purchases long-distance telephone time at bulk-rate discounts from major carriers and resells it at market rates to consumers. Working Assets takes the equivalent of 1 percent of each person's phone bill and enters it into a nonprofit donation pool that goes each year to a rotating roster of 60 nonprofits voted on by customers.
"We spend the money that way rather than on advertising," Scher explains. Similarly, from the royalty it receives for marketing a credit card, Working Assets donates to the nonprofit pool a dime for every credit-card transaction its customers make. Through various virtual market Internet sites that fall under its WorkingForChange.com umbrella, the company also donates a percentage of online customer purchases. And, most recently, Working Assets created a similar donation mechanism through the long-distance telephone and Internet services it now offers on Sprint PCS Web-enabled cellular phones in select cities.
Scher's company promotes political activism in more direct ways, as well. "We're actually one of the most powerful citizen-action groups in the nation," she says. In 1999, Working Assets launched a progressive talk-radio station in Boulder, Colorado, which is simulcast via the Internet. "We see it as the antidote to Rush Limbaugh," Scher laughs. Through various Web sites, the company also helps coordinate volunteers with hundreds of nonprofit groups. Moreover, the Working Assets phone bill (which, Scher proudly points out, is printed on 100 percent post-consumer recycled paper) announces two crucial national issues under debate each month, about which customers may voice their concern to key decision makers through free calls and easy-to-send letters. "Thanks to the HBS course Managing in a Competitive Environment, I knew the importance of segmenting the customer base by congressional district so that we can keep customers abreast of issues according to their region," she notes. The company's customers generate approximately 100,000 phone calls and letters every month to support fast-moving progressive issues such as gun control, government funding of public broadcasting, and the legalization of same-sex marriages.
It's no surprise that Scher has dedicated her life to social causes. A native of Clifton, New Jersey, she grew up in a family that was "liberal and concerned." "My parents taught me that individuals can make an impact and that it's our responsibility to speak out about injustices and to be generous with our time," she says. Scher's father ran an environmentally responsible chemical company. Her mother was a professor of economics, an environmental activist, and a ready volunteer for a plethora of causes. "She did things like taking inner-city children on nature outings with my brother, sister, and me during the hot summer months," Scher recalls.
Scher attended Yale as an undergraduate, where she was active in the movement for divestment in South Africa, and then spent a year at the Institute for International Studies in Geneva. After a training stint at Bain to gain business skills, she decided to fill out her business education by attending HBS, where she graduated as a Baker Scholar.
Scher's career has already garnered accolades. She was honored as Entrepreneur of the Year in Northern California in 1997, and the San Francisco League of Women Voters has named her "one of four women who could be president." Married and the mother of two children, Scher has also been recognized by Working Mother magazine as one of the "25 most influential working moms."
One of Scher's recent marks of success was her company's move last year to comfortable and attractive new digs on the seventh floor of the Federal Reserve Bank building in downtown San Francisco. Being ensconced in the city's money citadel is perhaps a fitting sign that, as Scher has believed all along, the worlds of doing well and doing good are not so far apart after all.