Millennials spur capitalism with a conscience

• More big companies are embracing kind acts that help people
• If the kindness is PR or marketing driven%2C it probably will backfire
• 72%25 of consumers would recommend a brand that supports a good cause

At a handful of Panera locations, down-and-out folks pay only what they can afford. Nordstrom recently opened a test store where all profits go to charity. Starbucks has three coffee shops where a big chunk of the money made helps the needy.

This isn't capitalism gone wacko. It's capitalism with a conscience.

For decades, this kind of corporate kindness was the exception, but in the past few years,dozens of America's biggest brands have embraced socially kind deeds as an unusually effective way to sell themselves to consumers, employees, even stockholders. Some are listening to their hearts -- while others are listening to social-media chatter and creating consumable spin.

In either case, there is one particularly desirable audience that's watching closely: Millennials. This trend-setting, if not free-spending group of 95 million Americans, born between 1982 and 2004, live and breathe social media and are broadly convinced that doing the right thing isn't just vogue, but mandatory.

With nearly a third of the population driving this trend, kindness is becoming the nation's newest currency.

"Companies can't hide any more," says Ben Cohen, co-founder of Ben & Jerry's, known for not only devoting a hunk of its profits to charity but also for supporting grassroots environmental and sustainability causes. Because everything they do becomes social-media fodder, he says, "forward-looking companies are starting to do less bad -- and more good."

In an ultra-transparent world, where information zips from Facebook to Twitter to Instagram, just about everything a company does is out in the open, says John Mackey, co-founder of Whole Foods, a ground-breaking company in local community support. "If everything you're doing is seen," he says, "it's human nature to do things that people would approve of."

But it's no longer just outliers such as Ben & Jerry's and Whole Foods doing the right thing. Big consumer brands such as Panera, Starbucks and Nordstrom are members in good standing of the Do-Gooder Society. More likely sooner than later, corporate kindness that doesn't have its origins in the public relations or human resources department may become as common as coupons. Even in a dicey economy, kindness sells.

"Millennials who got burned by the recession feel a resentment to consumerism, but have few alternatives," says Robbie Blinkoff, a consumer anthropologist from Baltimore. "They had to create one: Love one another."

Not love in the 60's, hippie sense, but love in the show-me-what-you're doing-for-others sense.

Some are doing it at ground level. Some are making genuine, company-wide efforts.

Others are talking the talk but not walking the walk. Several large retailers, for example, embrace the image of kindness by asking customers at check-out to donate to charitable causes. That's, arguably, a far cry from a sustained and deep-seated effort from within. Even then, this national epidemic of corporate kindness is grounded in one rationale: It works.

Consider: Some 47% of consumers say they buy, every month, at least one brand that supports a good cause, according to a 2012 global survey by public relations firm Edelman. That's a 47% increase from 2010. What's more, some 72% of consumers say they would recommend a brand that supports a good cause -- a 38% increase in two years.

Just as compelling, consumers say they're more likely to discuss the good deeds a company does than they are to discuss a company's financial performance, according to a 2012 Weber Shandwick survey of nearly 2,000 consumers and senior business executives in the U.S, U.K., China and Brazil.

"It's bigger than a trend," says Marshal Cohen, chief retail analyst at the research firm NPD Group. "It's a powerful marketing tool for brands to use to separate themselves from the competition."

When consumers nationally were asked last month by research partners NPD and Civic Science how important a company's "social consciousness" was in determining where they shop and what they buy, 74% said it was either "very" important or "somewhat" important.

Doing good is becoming less an option and more a requirement. But it's tricky. It's not just about writing checks anymore, and most Millennials have a seemingly innate ability to smell out manufactured kindness. Corporate kindness must be grounded in an holistic sense of good that can't feel, smell or taste like it's been painted on by the corporate spin-meisters. It has to come from within.

"You can't hire someone to give you values," says Ron Shaich, founder of Panera Bread, which in the past 18 months has opened a handful of Panera Cares restaurants in urban areas that ask customers to pay only what they can afford -- even if it's just volunteering for an hour. "Kindness can't be a corporate tactic that's buried in the marketing department."

At the five Panera Cares restaurants, some customers don't pay at all – but that's OK, because others willingly some pay extra. The profits are primarily used to job-train at-risk kids.

The idea came after Shaich and his wife, Nancy, watched a TV news segment about a Denver entrepreneur who planned to open a cafe where diners paid only what they could afford. Shaich recalls his wife turning to him and asking, "Why don't you do that?"

Within a year, he did. He opened the first give-back-to-the-community store in the company's hometown, St. Louis, in 2010. It's still open -- and still profitable.

"It's in our DNA," says Shaich. "We didn't get into business just to make money -- not that that's bad. We got into business to make a difference in the lives of our guests."

Panera Cares is now making that difference in five cities, with plans to expand to more.

Alan Olsen eats two or three times a week -- and volunteers once a week -- at the Panera Cares in the Lincoln Park area of Chicago. "I like what they do," says Olsen, who otherwise works as a waiter an an upscale restaurant in Chicago.

"When I first saw Panera Cares, I wondered: How long is this going to last?" More than a year later, he no longer asks that. "It's just good people with good hearts trying to give back."

Nordstrom, too, has an eye on helping others with a Manhattan retail store, Treasure&Bond, whose profits -- and sometimes, a portion of its sales receipts -- go to charity.

Pete Nordstrom, president of merchandising and great-grandson of the Nordstrom chain's founder, says he got the idea a few years ago when visited a store in Paris, whose proceeds all went to charity. "Companies have to do more than make money," he says. "It's one thing to do well by the number of customers and another thing to do well by the community."

He opened a small store in New York's swank SoHo district with three purposes: to test the New York market, where Nordstrom has no full-service department stores; to test selling merchandise that might not be sold in conventional Nordstrom stores; and to give back to the community.

But kindness doesn't always come easy -- or cheap. The store has been running in the red since it opened, concedes Nordstrom. On top of that, it may have to change locations -- or even close -- after the lease expires in about six months.

"We will keep doing this as long as we can make it work," he says. "We have to balance making money and fulfilling our mission."

As long as the store is there, Jennifer Fisher will keep shopping there. She's an upscale jewelry designer who works about five blocks away.

In the past year, she's spent about $1,000 purchasing gifts -- mostly for others -- at the store. The fact that a store like this is in business -- with cool merchandise and a mindful purpose -- is huge, she says.

"Stores like this didn't even exist before," Fisher says. "It's a no-brainer when you know that you can buy something special and, at the same time, know you're giving back."

Some companies have etched kindness into their core for decades and are glad to see others catching up. Among them: The Body Shop; Patagonia; Stonyfield; Timberland; and industry leader Ben & Jerry's, which, in 1985, determined that 7.5% of its pre-tax profits would go to philanthropy. Since being purchased by global giant Unilever in 2000, the company has continued to give back roughly that same amount.

"Anything that adds more kindness to the world is a good thing," says co-founder Jerry Greenfield. "When companies measure social good at the same time they measure how much money they make, we'll be in a better place."

But if the motivation for doing good is just about selling more stuff or making more money, it's doomed to fail, warns Whole Foods' Mackey, who recently co-authored a best-selling book on the topic, Conscious Capitalism. His natural foods grocery chain runs a foundation that grants loans to aid people in poverty in 55 countries trying to start small businesses. "We do these things because they're the right thing to do."

Starbucks has been at it for years.

The coffee kingpin has operated a "community" store in New York's Harlem district that's been donating a fat chunk of its profits to local charities for more than seven years. More recently, it's opened similar stores in Los Angeles and Houston. By 2018, it expects to operate 50 of these community stores.

Echoing others, CEO Howard Schultz says, "This can't be done through a lens of marketing and PR, but through a lens of guiding principles." Government simply can't do everything, he says, "so it's incumbent upon business leaders to do more than our share."

But it's not just big, familiar brands doing the kindness thing. So, too, is the appropriately named KIND Healthy Snacks, a 10-year-old snack maker that claims to have both an economic and social bottom line. The company's founder, CEO Daniel Lubetzky, was born in Mexico to a father who was a Holocaust survivor. That, he says, "defines who I am, I what I do." His father's suffering, he says, is the impetus for his company, whose core mission is to "build bridges between people."

The key, he says, is that kindness must be genuine. His snacks, he says, not only help do kind things for the the body and the taste buds, but also the world. Every month, the company does one big act of kindness, such as buying school supplies for homeless children. At the same time, it prods its customers to do kind acts -- as simple as writing a thank-you note to a former teacher -- then report the act of kindness online. When enough customers report kind acts, the company responds, in kind, with a large act of kindness.

"Young people don't want to just make money," says Lubetzky. "They want to make a difference." Within two generations, he predicts, corporate kindness will be the rule, not the exception.

Just the image of kindness can be an effective sales tool.

It's no accident that one of Coca-Cola's Super Bowl spots displayed a series of kind acts -- such as dropped wallets being returned -- as captured by security camera footage from around the globe. Fostering kind acts will become a bigger part of Coke's marketing going forward, says Cristina Bondolowski, vice president of global brands. Extensive research shows that performing kind acts -- the act of giving -- makes people feel happier. Future marketing by Coke will show societal acts of kindness, such as a guy who installs swings in parks and a lady who secretly plants flowers at night.

"This is not just telling people to be happy," says Bondolowski, "but inspiring happiness."

The makers of Bayer aspirin have gotten in on the act, too. A recent TV spot for its Aleve pain relief brand features a guy whose back pain hits him while volunteering in a soup kitchen.

The idea came from within the brand's marketing group, which for the past four years has donated to -- and had 100 people volunteer at -- a local food bank near the company's headquarters in New Jersey. "We're just reflecting back to our consumers what they're already doing," says Barton Warner, vice president of marketing at Bayer Consumer Care U.S.

There's even a new magazine about this lifestyle that made its debut last month, appropriately named, Mindful.

The first issue, with an initial circulation of 90,000, sold out, says editor-in-chief Barry Boyce. "When we are mindful, we not only reduce stress and enhance performance, but it increases our attention to the well-being of others."