Transcript

Stanley Bergman: Thank you. And it’s good to see everyone. I don’t know many by face, but I know a lot of people by name. My wife Marion and I are known in Synergos as “Eddie’s Parents.” Eddie has told us a lot about many of the people in this room, and it’s great to see the faces here today. I was asked to talk about our family’s philanthropy and it’s hard to talk about family philanthropy without talking about the business philanthropy that I’m involved with. Just by way of background, Marion and I were born in South Africa. My parents were refugees to South Africa from Nazi Germany. They arrived in South Africa in 1936, and my late father and mother had a store in a place called South End, Port Elizabeth.

And for those that have been to Cape Town, I think you know of District 6. District 6 in Cape Town was one of the last multicultural communities that was pulled apart by the apartheid government. South End was the same. It was an integrated community. It had been around for probably 150 years, but as a result of the Group Areas Act in the late Seventies, it was pulled apart. This was the community I grew up in; a community where people from different parts of the world had settled. People that we would probably call “refugees” today, came from all over and built their lives there. It was a community where I learned that people getting along could make a difference, and that you could be poor but still have a tremendous life.

Marion and I came to the United States in 1976. Before coming to the United States, Marion was a physician at the Baragwanath Hospital in Soweto. At that time, we felt that it wouldn’t be a good idea if she became active in politics, and that she should choose one way or the other, to stay or to leave. We decided to leave. We came here, and we built our lives and business, and in raising a family. Of course, any charity that came our way we would contribute. And then our kids, our son Eddie and his brother Paul, really brought us into active philanthropy. Paul did a project on BEE, Black Economic Empowerment in South Africa, in his first year of college. He went to South Africa, and then he came back and said, “Mom and Dad, why are you not involved in philanthropy in South Africa?”

Eddie was involved in a group at high school called Students For 60,000, named after the 60,000 homeless in New York City, I guess, in the ‘60s. They used to take young people, only 14 or 15 years old, to Nicaragua. It was a tremendous educational program. They helped these kids build gardens, etc. The UN found out about it and they wanted the schoolteacher that was involved to have a similar program for Africa. The schoolteacher asked for volunteers. Eddie went to Africa with the school program, came back, and wanted to initiate a program for the school in Africa on the west coast. The school board said under no circumstances could the school allow this to happen. So, at 16 years old, Eddie formed Miracle Corners of the World, and got Marion and I involved.

Our family believes that philanthropy is not only about writing a check, but should also be about active engagement. Marion, Paul, Eddie and I are engaged in numerous philanthropic endeavors. A lot of it relates to health care, of course to Africa, and to education. So, that’s the one side of my life. The other side is my company, Henry Schein, which is the largest provider of products and services to health care practitioners. We have about a million and a half dentists, veterinarians, and physicians that buy our products and services. When he was alive, Henry Schein and his wife Esther were very philanthropic, and they would give products or donations to anybody that asked for them.

I grew up in a very socially responsible youth movement in South Africa, and I wasn’t sure whether I wanted to undertake philanthropy professionally or go into business. In the end, I came here to the United States, and was absorbed in business. When I came to Schein, I realized that you could combine business and social responsibility.

At Henry Schein, we’re a company of 21,000 people, and we’ve been able to build our business and create shareholder value around the notion of social responsibility and engagement in society. So, we have what we call five constituents that make up the mosaic of the Henry Schein success formula. One of these five constituents are our suppliers. We want to help them find ways to bring their products to market, and we want to do a great job for them, so that they view us as the best way to bring their products to market.

On the other side are our customers. These doctors that are operating primarily in the free market. Many of them get a good health care education but don’t know how to run a practice. We help practitioners operate their practices, so that they can provide better clinical care. And in the center is our team, bringing our suppliers and our customers together. We call it Team Schein, and we are very much engaged in caring about the world. I’ll come to that in a minute. And then our fourth constituency as a public company, is our shareholders. We are very clear with Wall Street, that yes, we commit to a very good rate of return but Henry Schein doesn’t exist only for our shareholders. It’s one of the five constituents that make up the mosaic of our success.

At the core, the secret sauce of Henry Schein’s success, is our engagement with society through the Henry Schein Cares program. And I believe that this has been the reason why Henry Schein has been so successful as a public company. We’ve been public for 21 years, and we’ve had a compounded annual growth rate of about 19% in shareholder value. It puts us right at the top. There are many studies that have emerged in the last few years which show that companies that are engaged not only in writing a check, but are engaged with employees and other constituents, provide a very good rate of return. They do better than companies that are only focused on the shareholder value. Of course, today Millennials are the hardest human capital to attract and to keep. And yes, we know that Millennials only work for companies that are socially responsible—not only but the majority—and certainly they will stay with companies that are socially responsible. But we have involved our company in public-private partnerships that have enabled us to closely work with the constituents that help us be successful.

These social responsibility initiatives very much tie into our family’s personal interests, and we’ve been able to engage the company in advancing these social initiatives. For example, one of the biggest health care challenges in the United States is oral care for children. It was addressed a little bit in health care reform. I’m not sure if that part is even going to remain. So, what we have done is develop a program with the American Dental Association. On any given weekend, we provide dental care to about 300,000 children in this country, and we mobilize about 30,000 dentists, allied professionals, in providing this care.

This program fits in very well with the Benjamin Franklin concept of enlightened self-interest—doing well by doing good. We’re helping our customers service the patients, the dental population of America, and the population of America that doesn’t have access to oral care. So, our customers are actually doing something that they want to do. But if you think about it, we’re also working with our suppliers to give the free products that align us with our suppliers, and our salespeople are there helping to organize these events with our customers. The symbiotic relationship between the constituents is such that there is alignment of interest, and we’re doing good.

Another program that we’re engaged with is a program called “Back to School”. We have about 400 facilities around the world in relatively decent neighborhoods. In Westchester, or even here in Long Island, there are many, many children that actually grow up in shelters. They don’t have the ability to go to school with all the instruments, activities, and tools that their fellow students from more well-to-do homes may have access to. So, for 20 years, our team has been going to these shelters to figure out what kids need. Then we have a party where we invite the kids and their families, and we can give them a bag full of the tools that they need. So when they go to school, they will be in a similar position as a kid from a well-to-do family.

What does this do? It brings us, of course, close to our team members who are very much engaged in finding solutions for people in the community. We have many, many programs like this. Whether it is for our “Back to School program,” or our disaster relief program, the key is to engage in active philanthropy. And at the end of the day, the net result for companies that are doing this, is a better rate of return than companies that are not doing this.

For those that are interested, there is an organization called the Higher Ambition Institute—it was born at Harvard; it’s now loosely affiliated with Harvard—where companies are involved in finding ways to make a difference in society by engaging all of their constituents. You will know some of them like Becton Dickinson, and Aetna, but there’s a lot of smaller companies, as well.

There is now very good documentation that shows the rate of return of investments in companies that are socially responsible is a multiple of the rate of return of companies that are not socially engaged.

So, I grew up with my family in Port Elizabeth, South Africa, in this community that was relatively impoverished. I saw a lot there. I saw what the Schein family was doing when I got to the United States. How they were involved in philanthropy. And together with a team of executives, how they were able to advance social responsibility in a public company, in a way that is actually increasing shareholder value. That is my story and I’d be happy to talk more at some other time. Thank you.