Business with a Heart
Give Something Back Shares Profits with the Community
By Charleen Earley
Ah, now there’s an idea: Take the profits normally given to shareholders and drop them into the hands of the local community via nonprofit organizations. It’s one of those slap-the-forehead-V8-moments Mike Hannigan had 15 years ago with his friend, Sean Marx. “I’m just a facilitator, along with 100 other people in this company,” says Hannigan, 56, co-founder and owner of Give Something Back Business Products in Oakland. “I’ve been fortunate to develop a unique tool.”
It’s the business model actor Paul Newman started years ago with his salad dressing profits, and it’s what Hannigan follows today with his Post-it notes and janitorial supplies. He donates all of his company’s profits “after income taxes, because the government doesn’t like us donating their money” to local charities. It’s his grassroots way of cutting out the middleman to serve the needs of those around him. It’s a win-win for the company and community.
On any given month, the win for Hannigan translates into more than $50,000 for local charities such as the Women’s Cancer Resource Center in Oakland, the East Bay Agency for Children and the Alameda County Food Bank in Oakland. “We started the company 15 years ago with $40,000. Now we give more each month than what we started with to charities in profit. It totals a half a million each year,” says Hannigan.
Give Something Back must be doing something right. Hannigan says it’s known as the largest independently owned supply company not just in California but in the western United States; the city of Oakland and the city of San Francisco are two of its major clients; and GSB has donated more than $3 million to charities throughout the Bay Area. “Today we passed our $3 million mark, and each year it goes up,” he adds.
Generosity makes good business.
The achievements of GSB set the company apart as well. It has won awards for corporate generosity from Paul Newman of Newman’s Own and the late John F. Kennedy Jr. of George Magazine. GSB was also voted one of the 10 most generous companies in America, chosen out of a field of 400-plus businesses; and it’s been cited as one of the most generous enterprises in California.
“Most people do community service after work hours. I have the advantage of doing this during work hours and not in my spare time,” says Hannigan, a professed product of the ’60s and ’70s generation, when community service was a culture and a way of life. The Berkeley resident, single man and father of two grown daughters says the mission works when you invest in a product you already love. “With Paul Newman’s business model through food, it meets the needs of the customers. It was great for me as a customer, because I enjoyed his product and knew that the profits from my purchase went towards charities.”
Everyone needs paper clips and envelopes, right?
Hannigan says he’s aware of a survey in which most people expressed a preference to do business with a company that has a positive impact on the community through its products. The ripple effect continues on down the assembly line. “Employees who feel good about the place they work are more likely to be productive,” says Hannigan, whose company also supports diversity in the workplace.
Before GSB was born in Hannigan’s house, his undergraduate degree in philosophy from the University of California, San Diego and his master’s degree in criminology from the University of California, Berkeley landed him a job that had nothing to do with either. He took an entry level position with Xerox and worked his way up. He eventually learned every nook and cranny about the office supply business and ultimately decided to try things his way. “There came a point when I didn’t want to work for someone else, so I put all my business skills to use.”
Wealth, he says, is created in the marketplace. “There’s plenty of wealth, but it doesn’t get around. Forty-five million Americans don’t have health care. How do you reconcile that contradiction?” asks Hannigan, who serves as chairman of the Oakland Workforce Investment Board.
Modest to the core, Hannigan says his parents taught him to work hard in life and do what’s right. “My parents grew up in the Midwest; they were very hard-working, conservative folks who lost their farm at one point. This isn’t about me personally giving back; it’s about the customers and their decision to buy products that ultimately benefit the community.”
Customers and employees ultimately choose, through a ballot system, the organizations that will profit from their purchase. “Don’t get me wrong—we’re a hard-nosed, competitive business. Whoever wins makes a profit, but from us, customers get to participate in the profit distribution,” he says. “We are now in the process of selecting organizations that have a greater impact on the community.”
A pioneer with his idea of giving back, Hannigan says 15 years ago there was nothing out there with this concept. “Now there’s a movement!” he says. Starbucks management consulted with him on his model at GSB. “Most companies don’t donate that much,” he adds.
Competitive rates, fast service and low prices help keep GSB in the race against big box stores like Office Depot and Staples. Some ink from Inc. Magazine helps, too. “We were named one of the 50 fastest growing city-based companies in the nation in 1999, 2000 and 2001. That same magazine named us one of the fastest growing privately held companies in America,” he says.
With offices in Oakland, Sacramento and San Diego plus a warehouse in San Leandro, GSB garners $26 million in annual sales with over 4,000 active business customers, Hannigan says.
“What we do well is sell office products competitively,” says Hannigan. “What separates us from the rest is that our profits go back into the community. It’s not a model based on sacrifice; we’ve just eliminated stock holders and share holders.”
To get involved, become a customer or recommend a favorite nonprofit or organization for consideration, call (800) 261-2619 or visit www.givesomethingback.com.