To: Professor Clark Hansen, CEO, AMDP

From: Colleen Liu      

Date: October 21, 2013

Subject: Better World Books Investment proposal  

 

I highly recommend Anima Mundi Development Partners to look into online bookseller Better World Books as a potential investment. Better World Books is a social enterprise that promotes literacy around the world while being an environmentally friendly company with a strong financial track record and sustainable growth. It is a strong triple bottom line investment candidate that fits all of Anima Mundi Development Partners’ investment criteria. It is a company that makes profit with a meaningful purpose: to help develop a better world.

 

The start of a social enterprise 

Christopher “Kreece” Fuchs, Jeff Kurtzman and Xavier Helgesen founded World Books in 2002. It is primarily an online for-profit social enterprise that collects used books and then sells them online. The three founders started off by selling used textbooks online to make some money when they realized the potential business opportunities in the online book market. Subsequently, they launched a book drive benefiting the local community center. Within six months, they raised over $10,000 from collecting and reselling 2000 books. Motivated by this successful book drive, the three founders created Better World Books with the hope of “changing the world while still making a decent living.” (BetterWorldBooks) Soon, they found a way to achieve both objectives by getting the most value out of every book. For every book the company sells, the company donates one book to a person who needs it. Today, the 11-year-old company has grown into a multimillion-dollar social enterprise. (BetterWorldBooks)

 

A social enterprise with strong corporate social responsibility

Social Enterprise is a for-profit (or non-profit organization) that is willing to apply commercial strategies to maximize improvements in human and environmental well-being. As a social enterprise, Better World Books dedicates 8-10% of its revenues to fund literacy initiatives with nonprofit partners as a way to promote literacy. The company also wanted its partners to share its success with these partners. It created “a mechanism to give stock options and a board seat to its literacy partners, turning them into shareholders and giving them a voice in the company.” (Murphy) 

 

In addition to being a social enterprise, Better World Books also has a culture of strong corporate social responsibility. Corporate social responsibility is an organization’s responsibility for the impacts of its decisions and activities on society, the environment and its own prosperity. “Better World Books' corporate values are guided by a deep commitment to the environment.”(Murphy) As a seller and re-distributor of used books, the company has recycled over 100 million books from over 2000 public libraries and 1800 college campus drives to keep this paper waste from ending up in landfills.  The company has also reclaimed over 900,000 pounds of metal shelving from libraries around the country. (BetterWorldBooks) 

 

A fully fledged triple bottom line company 

“Better World Books’ business model rests [on] the triple bottom line.” (Taylor) The triple bottom line consists of three major components:  

• People: how socially responsible a company has been with customers, suppliers and employees throughout its operations

• Planet: how environmentally responsible a company has been such as reducing carbon emissions and minimizing its environmental impact

• Profit: the traditional measure of profit – financial gains and losses of a company 

 

People: supporting literacy initiatives 

Better World Books donates a book for every one it sells and directs a portion of its revenue to fund the Literacy and Education in Action Program (LEAP) for specific projects. These projects are designed to fight to reduce global poverty through education. For example, the company has funded projects to provide teacher training in Guatemala and reading assistance workshops where kids struggling with literacy are encouraged to read to companion dogs. Better World Books has raised over $7.5 million for over 80 literacy and education nonprofits and over $8 million for libraries across the nation. (BetterWorldBooks)  

 

Planet: reducing carbon footprint  

Better World Books is dedicated to minimizing its environmental impact by reducing its carbon footprint. Carbon footprint is the total amount of greenhouse gases emitted into the environment by a specific unit such as an individual or organization. Carbon footprint is measured in tons of carbon dioxide equivalents by looking at the daily energy consumption of an individual or an organization. Greenhouse gases are the major contributor to global warming, which will lead to negative consequences such as increased incidence of drought and an increase in extreme temperatures. To reduce its carbon footprint, Better World Books has entered into carbon-offset programs that cover emissions associated with both shipping and our company's other operations and activities. (BCorp) The company has a carbon neutral shipping cart, which “collects a few cents from every customer at checkout to help fight global warming by providing support to wind projects that help avoid carbon dioxide emissions.” (BetterWorldBooks) Its efforts have rewarded it with two EPA Wastewise Gold Awards—one for paper reduction in 2009 and another for climate change in 2010. (BCorp) 

 

Profit: making profit with steady growth 

Better World Books not only provides great social and environmental values, but it also makes a sustainable profit with steady growth. “Better World Books has a beautiful business model. The company gets books for free from libraries and book drives. In this case, the mission actually increases [its] profit margin” and contributes to the sustainability of its business model. (Venture) Over the last few years, Better World Books has experienced tremendous growth. Its revenue has gone up from $31 million in 2006 to $55 million in 2011, with an average of 39% growth.   

 

My recommendation 

“A smart supply chain, an effective social mission, the smarts to bring on experienced management early on, the ability to look for new supply sources-they’ve all contributed to Better World Books’ success.”(Field) Better World Books is a company with a revolutionary vision that has great potential to grow. “With rockstar achievements across its triple bottom line, Better World Books is creating a better world through business.” (BCorp) I strongly believe Better World Books will be a good investment for the AMDP.                                      

 

Work Cited

BetterWorldBooks, www.betterworldbooks.com 

 

Murphy, David. "How Better World Books Built A Multimillion-Dollar, Venture Backed Social Enterprise." n. page. Web. 21 Oct. 2013. http://causecapitalism.com/how-better-world-books-built-a-multimillion-dollar-venture-backed-social-enterprise-better-world-books-with-david-murphy/ . 

 

BCorp, . About Better World Books. Web. www.bcorporation.net/community/better-world-books . 

 

Venture, . PROFITS FOR SOCIAL GOOD. Web. http://ventureatlanta.org/2011/11/profits-for-social-good . 

 

Taylor, Kate. 6 Entrepreneurs Who Turned Service Into A Career. Forbes, Web.

 

Field, Anne. Secrets of a Successful Social EnterpriseD. Forbes, Web. www.forbes.com/sites/annefield/2013/05/04/secrets-of-a-successful-social-enterprise