Newman’s Own Foundation, renowned for its commitment to giving 100% of profits to charity, is inviting other companies to join its revolutionary “100% for Purpose Club.” This initiative coincides with what would have been the 100th birthday of the company’s founder, Paul Newman, on January 26.
Newman’s Own seeks to inspire a new wave of philanthropic capitalism through this bold call to action.
“It is trying to be a proof point and serve as a model for a completely different type of organization,” said Alex Amouyel, CEO and president of Newman’s Own Foundation, during a recent TED talk.
Amouyel also pledged that the foundation would provide guidance and resources for companies interested in switching to donating all their profits to charity.
Paul Newman’s legacy: A model for philanthropy
Founded in 1982 by the Oscar-winning actor Paul Newman, Newman’s Own is more than a food company, it’s a mission-driven enterprise. In 2008, Newman donated the company to his foundation, ensuring its profits would continue supporting charitable causes.
Over the years, the foundation has donated $600 million to initiatives focused on children, nutrition education, and food justice for Indigenous communities. Newman’s Own is part of a growing but rare movement of companies that operate solely for philanthropy.
One notable example is Humanitix, an Australian company that donates 100% of its profits from ticket sales to charity. Humanitix has joined Newman’s Own as a founding member of the “100% for Purpose Club.”
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The push for a new business model
Changes in U.S. legislation bolster the launch of the “100% for Purpose Club.” The 2018 Philanthropic Enterprise Act allows foundations to fully own corporations that donate 100% of their profits to charity.
Previously, foundations could not own more than 20% of a company, challenging enterprises like Newman’s Own after Paul Newman’s passing. Celia Roady, an attorney for Newman’s Own Foundation, explained the significance of the legislation.
“They’re not trying to open up any big loopholes but instead pursued narrow changes that allow companies wanting to give it all away to be owned by a private foundation.”
The law requires that the foundation own the company entirely, donate all profits to charity, and maintain a board independent of the company and its donor. While no other company has adopted this structure, Amouyel remains optimistic about its potential to transform industries, this innovative approach can improve the business landscape.
Changing capitalism’s narrative
The “100% for Purpose” model presents a compelling alternative to traditional capitalism. Amouyel argues that while capitalism is effective, it often fails to address societal needs.
“This allows you to use its power and to generate money, but then to make sure that the money is not about making rich people richer and richer and richer,” she said. “It’s not for every business, but it can work for more than we think.”
Other companies are exploring similar paths. Patagonia, the outdoor clothing brand, reorganized in 2022 to donate its profits to environmental advocacy.
These examples and Humanitix and Newman’s Own offer a roadmap for companies looking to align profit with purpose. Nien-hê Hsieh, a professor at Harvard Business School, sees value in diverse ownership models.
“Whether it’s a concern about monopoly or concentrated ownership, these models encourage companies to focus on broader societal goals,” he said.
The impact of Newman’s Own Foundation
Since its inception, Newman’s Own Foundation has profoundly impacted communities. One of its signature initiatives is a network of camps for seriously ill children, including Camp Boggy Creek in Florida, which offers free experiences for campers and their families, this inspiring work is a testament to the positive change philanthropy can achieve.
The foundation’s contributions extend to nutrition education in schools and supporting food justice for Indigenous communities. Its legacy is proof that businesses can thrive while prioritizing social good.
“The Summerland Charity Shop Society has steadfastly supported our foundation,” said Amouyel. “Their leadership and dedication to youth programs and initiatives have made a lasting impact.”
A call to action
Newman’s Own hopes its invitation will inspire a broader movement. By offering guidance and varying levels of participation, the foundation seeks to encourage companies to start small and gradually increase their commitment to social causes.
“It’s still early days for this kind of model, but the potential is enormous,” said Roady. “There’s plenty of time to see its impact unfold.”
With Paul Newman’s face still gracing every product label, his vision for a better world resonates. Newman’s Own sells not just salad dressing or popcorn but hope, one product at a time.