Page 17 - Azerbaijan State University of Economics

Muhammad Yunus: Can wealth concentration be stopped?

foundations to invest in social businesses. Foundations can invest in regular
companies, and make money to invest in social businesses, like in Bosch and Tata
examples. In addition, corporates can create social businesses as their subsidiaries,
can have joint ventures with other social businesses. Already we have many
excellent examples of joint venture social businesses created by Danone, Veolia,
Uniqlo, Intel Corporation, McCain, Euglena, and others.
Corporates can do something else. They can invite their shareholders to sign a
"giving pledge". Shareholders will be asked to give their consent to allow a
percentage of their dividends to be deducted to go into a social business fund as their
equity. In case of necessity these shares in the fund can be sold to another social
business investor at the face value. That way their money is not gone forever.
Corporates can use their annual CSR contribution to go into a social business
trust.
I have been trying to draw attention of investment funds to a similar
programme. They manage huge funds. Total worldwide assets invested in mutual
funds alone amounts $30 trillion. There are many types of investment funds. All put
together it amounts to ocean of money.
My proposal to them is to give each individual investor a choice whether
he/she would like to set aside, say, 2.5% (or more, or less) of his assets to create a
sort of recoverable endowment fund. Annual Income from this recoverable
endowment fund then can be invested in social businesses. All that an investor has
done is to sacrifice the income of 2.5% of his assets to achieve some social
objectives, without sacrificing his assets. If the companies agree and the investors
agree this recoverable endowment fund can potentially be enormous.
I have been suggesting to top policy-makers of giant pension funds to apply
the same policy to create recoverable endowment funds. Globally pension funds
have a combined total asset of $ 84 trillion. All they need to do is to take the
initiative to write to their investors about the plan and seek their consent by signing
up. I did not get positive response yet. They explained that nobody will respond
positively to this idea because all that the investors want is the growth of their funds,
they are not interested in giving. I politely pointed out that they may be surprised by
the responses; they may be completely contrary to their expectation. I tell them if
you don't ask you'll never know what surprise is waiting for you. I have concrete
experience of seeing a Fortune 500 company asking a similar question to all its
shareholders and getting a totally unexpected positive from 98% of shareholders. Of
course, not in every occasion we may be as lucky as that. All shareholders or
investors may not sign up after the first call. If some of them sign up that will be the

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