Small Business

Making Social Entrepreneurship Matter


Daniel Lubetzky's "not-only-for-profit" business has created profitable joint ventures with Palestinians and Israelis. His model deserves attention

I recently came across an article in The Jerusalem Post about social entrepreneur Daniel Lubetzky. The Mexican-born son of a Holocaust survivor, Lubetzky founded PeaceWorks, a successful global business that promotes peace through commercial ventures among Israelis, Palestinians, Egyptians, Turks, Indonesians, and Sri Lankans. The far-flung success of PeaceWorks helped Lubetzky to found OneVoice, a global movement (with some 640,000 participants at last count) that seeks a comprehensive two-state solution between the Israelis and Palestinians via a negotiated peace process.

Social entrepreneurship (BusinessWeek, 12/14/07) has become a hot topic in recent years, attracting people filled with the loftiest of intentions who want to do good by doing good. But it's the tricky feat of running a sustainable operation that is the more elusive goal. So when I learned that Lubetzky had created a viable business model (in operation since 1994) that brings Arabs and Israelis together while plowing profits into peacemaking efforts, I rang up PeaceWorks' New York office and was invited down for a visit.

Lubetzky is an energetic and pragmatic entrepreneur. The walls of PeaceWorks' open office space are filled with the sayings of notable thinkers ranging from Mahatma Gandhi to Henry David Thoreau. Lubetzky pioneered his "not-only-for-profit" business theory while on a fellowship in Israel to write about legislative means to foster joint ventures between Arabs and Israelis. It was a topic Lubetzky, who holds a law degree from Stanford, was already passionate about. In college, his senior thesis was a 268-page treatise on economic cooperation as a means for fostering peaceful relations.

Coexistence Test Case

While in Israel, Lubetzky discovered a tasty sundried tomato spread but found out the company behind it was going out of business. "The owner was getting their glass jars from Portugal and their tomatoes from Italy," he told me. Fairly quickly he realized he had found a test case for his fledgling theory: what if the company sourced the jars in Egypt, while getting their raw products from Turkey and Palestine? Today, tapenades and spreads under the labels Moshe & Ali's and Meditalia (both joint ventures established by PeaceWorks between Israelis and Palestinians) are sold in stores across the U.S., including Whole Foods (WFMI). More recently, PeaceWorks introduced Bali Spice, a line of Asian sauces manufactured by women's cooperatives made up of Muslims, Christians, and Buddhists in Indonesia and Sri Lanka.

"We are using market forces to achieve the goal of peace and coexistence," says Lubetzky. Having foes unite in business, he explains, works on three levels: First, it helps break down stereotypes; second, it creates an incentive to continue to work together; third, in doing so, it helps puts an end to regional violence and fundamentalism that feeds off despair.

Same End Goal

Getting entrenched enemies to set aside their animosities and misunderstandings and set up shop together has not always been an easy sell, he acknowledges. But over the past 15 years, Lubetzky's unconventional vision has brought together a diverse group of individuals who find they are all interested in the same end goal.

About five years ago, a mutual friend introduced Lubetzky to Samer Hamadeh, a Palestinian-American entrepreneur who co-founded Vault.com, a comprehensive job and career site. Initially, Hamadeh resisted getting involved. "I'm not a political person," he told me. "I grew up in Fresno, Calif., I went to Stanford, my parents left Palestine when they were kids and never looked back. I didn't realize that I was Palestinian until my teens and not really what that meant until after 9/11.… I'm a red-blooded Republican American interested in our security and I felt the conflict was harming our interests. So I came at it from that perspective, as an American wanting to try and solve that problem."

Now Hamadeh sits on the board of the PeaceWorks Foundation. "There are Arabs and Jews working together and making money," he says. "From my vantage point, it is working. They are not employing tens of thousands of people but hundreds, but they are making the effort tangible. They are showing that the other side doesn't have to be an enemy. They can be a business partner."

Two-State Solution

When the Second Intifada broke out in 2000 after the Camp David negotiations fell apart, Lubetzky realized that business alone could not singularly push the ball uphill. He cited a survey of Israelis showing that just two months before the Intifada, 90% believed peace was just around the corner. Three months later, less than 44% thought peace would ever be possible. "Business was not enough," says Lubetzky. "We needed a grassroots movement to push government."

With both sides of the conflict drowning in brutal images of the other, Lubetzky says the moderate voices of regular people were being buried. So, in 2002, he launched OneVoice to give people a voice in driving the agenda toward a workable two-state solution. "We needed a platform for ordinary Israelis and Palestinians to seize back the agenda," he says. Today, OneVoice has offices in Ramallah, Gaza, Tel Aviv, London, and youth chapters at college campuses across Israel and the Palestinian territories. Under a rather broad tent that includes those on the left, right, secular, religious, Israeli, Palestinian, Jew, Christian, and Muslim, OneVoice is actively involved in an array of efforts to find a way for people to work and live together.

A Social Bottom Line

Lubetzky does not have a strictly utopian vision for his not-only-for-profit philosophy. Three years ago he started Kind Fruit & Nut Bars, a for-profit venture that channels 5% of its profits into the PeaceWorks Foundation. The operation (it is one of the fastest growing healthy snack bars) is much bigger than the Meditalia line and sold globally. The larger scale for-profit enterprise gives Lubetzky another lucrative channel for his concept of social entrepreneurship.

"At end of day," says Samer Khoury, the executive vice-president of Consolidated Construction, one of the oldest Arab construction firms in the Middle East, "even if politicians want to make peace, they have to have the masses on board." As Khoury, who is also a OneVoice board member, explained to me, "in order to get them on board, you have to have a grassroots movement. And the movement has to convince both societies that peaceful coexistence is the only way forward. I strongly believe that this initiative is a valuable way to bring two societies closer together."

Lubetzky offers an enticing vision, one that combines traditional profit-making models with a social bottom line, attacking an issue from several angles. Moreover, he's created a space that has brought disparate forces together for a common goal. It sounds good in theory, but it works even better in practice.


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