01 Oct 2000
Laura Scher of Working Assets
Sharing the Wealthby Marguerite RigogliosoTopics:
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 Francisco based 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
"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 fifteen 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 sixty
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 one hundred thousand 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
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.
Class of MBA 1985, Section E