Industry with Heart,

January 2011

Herbalife: Caring for Kids around the World
by Barbara Seale

Kids at the Casa Herbalife program at Fundación Sinsoluka in Quito, Ecuador.

Live healthy. Change lives. Those are more than just slogans at Herbalife. The positive philosophies reach its distributors and customers, of course, but the company stretches far beyond the immediate Herbalife community with its constructive messages and actions. Through the Herbalife Family Foundation (HFF), it also brings them to children in need around the world.

Michael O. Johnson, Herbalife Chairman and CEO and Chairman of the HFF.
Herbalife founder Mark Hughes created the foundation in 1994 to support the needs of children at risk. Hughes felt a kinship with those children. He had a troubled youth, and he recognized how important a helping hand had been in his own life. So he started a foundation that would help children in need overcome life’s most basic challenges—from escaping poverty, hunger and abuse to receiving adequate medical care and education.

In 2005, under CEO Michael O. Johnson’s direction, the Herbalife Family Foundation created its Casa Herbalife program, working with established charities to help meet the nutritional needs of children at risk. It also expanded its scope to provide funds to organizations assisting victims of natural disasters. Today, HFF is a global nonprofit working in communities around the world. And its flagship program traces its roots back to the heart of Mark Hughes.

Honoring Hughes’ Heart
In 1998, Hughes visited Rio de Janeiro. While there, he discovered an orphanage that required extensive repair. There was no way he could ignore such tremendous need, so he provided funds to renovate the building. It became known as Casa Herbalife. In 2005 Herbalife Chairman and CEO Michael Johnson saluted Hughes when he chose the name of that Brazilian orphanage as the moniker for the expanded outreach program. Casa Herbalife now serves some 13,000 children in about 60 international locations.

“The Casa Herbalife programs we support today are not freestanding centers we own or built but existing charitable foundations,” says Barbara Henderson, HFF President and also Senior Vice President of Worldwide Corporate Communications for Herbalife. “During its early years HFF had supported a variety of causes related to children. In 2005 we organized to do ‘impact giving’—focusing HFF and volunteer resources on bringing better nutrition to children through long-term relationships with our Casa Herbalife organizations.”

She notes that the first Casa Herbalife established in the United States was in South Central Los Angeles. There, Herbalife works with a nonprofit youth center named A Place Called Home. Its extensive and innovative afterschool programs regularly serve 250 children daily, but during the summer that number explodes. Herbalife learned that meals and snacks there were based on sugary drinks, chips and bologna sandwiches—not the kind of nutrient-packed food that leads to learning and good health. Herbalife is based on helping people be healthy and live their best lives, so it built a kitchen that now lets A Place Called Home serve hot meals. It took an additional step and started a nutrition education program. HFF’s involvement goes beyond funding. Since Los Angeles is the company’s headquarters city and home for many distributors, the Herbalife family gets involved there, too. Last year more than 200 employees and distributors donated more than 1,600 volunteer hours to A Place Called Home, and this volunteer involvement goes on at Casa Herbalife programs all over the world.

(Left) A Place Called Home’s Jonathan Zeichner in the garden HFF funds where kids grow foods that will be served in the Casa Herbalife Kitchen. (Right) A child at the SOS Children’s Village in Bangalore shows off a painting with Ajay Khanna, Herbalife’s General Manager of India.

Tracking Local Needs
HFF Executive Director Robyn Browning adds that the funding the foundation provides to its recipient organizations begins with nutrition, but it doesn’t stop there.

“It means different things for different parts of the world, or even different areas of the community—everything from food to security to education,” she says. “For example, we have groups in the London, England, and North Lanarkshire, Scotland, areas. We learned about children there who were taking care of their disabled parents or elderly grandparents and needed to know how to make healthy meals. Those children shouldered that responsibility in their families, so we stepped up to address their need.” HFF funded educational programs there focus on the importance of preparing and storing food properly, food hygiene and food safety. Thanks to HFF’s efforts, more than 250 young people have learned to cook for their families and to make healthy food choices.

She notes that HFF establishes programs in locations where distributors or employees can play key roles.

“Amazing things happen when we include Herbalife distributors in philanthropy,” Browning says.

Youngtlee Chung, General Manager of Herbalife in Korea, and the principal of Sangok-won hang the Casa Herbalife plaque in the kitchen.

Generous Distributors
For example, one Casa Herbalife program in Quito, Ecuador, is called Fundacion Sinsoluka. The name literally means ‘without glue,’ and refers to the readily available, highly addictive glue sniffed by many homeless children in Quito. Sinsoluka supports homeless children by providing after-school help, such as counseling, domestic violence prevention, substance-abuse treatment, tutoring, and job-readiness training. HFF provided a grant that supported the organization’s 2010 food budget.

“But our distributors looked at it and thought we could do more,” Browning says. “With their generosity, we did a huge fundraising campaign, and the distributors were able to purchase and donate a home for the organization that gives them a place where more children can be fed and more services can be provided.”
As heartwarming as that story is, it doesn’t stand alone. Henderson adds that distributors at an Herbalife event in Bogotá, Colombia, were just as generous. After the Herbalife Family Foundation provided initial funds for a project in an orphanage, local distributors met with the executive director of the organization to view plans for the new building. They asked how much money would be needed to construct a new building. The answer: about $100,000.

“We were having a fundraising auction that evening,” Henderson says. “Some of our Chairman’s Club members said, ‘let’s build that building.’ They raised the full $100,000 that night and told the charity’s executive director about it the next morning. There are stories like this from all over the world.”

Keeping It Personal
The number of new Casa Herbalife organizations begun in 2010 is impressive. Grantees are all over the world, too: Chicago, Illinois; Quito, Ecuador; Tijuana, Guanajuato, and Queretaro, Mexico; Bucharest, Romania; São Paulo, Brazil; Taloe, a rural city in the Krasnoyarsk region of Russia; Kiev, Ukraine; Turin, Italy; North Lanarkshire, Scotland; and in Dallas, Texas. Because Herbalife pays all of HFF’s administrative costs, 100 percent of money raised can be used to meet local needs, beginning with better nutrition for children.

Needs are everywhere, of course, and distributors help HFF identify it. Then HFF looks for organizations that are a good fit, and where groups of local distributors are committed to being involved—not just initially but over the years. Their participation facilitates continued fundraising, and it makes the relationship more personal for everyone. “Personal” is something Herbalife seeks in its philanthropy, and nothing makes company distributors or employees happier than when they can watch their efforts make a difference in the life of a young person they have come to know.

“We have young women in Korea living in one of the orphanages we support,” Browning says. “Girls can live there through college, because there is a cultural stigma against young girls who live on their own. So we were thrilled when one of them started working part time for Herbalife. Michael Johnson likes to say that he’s convinced that one day there will be a Chairman’s Club member from one of our Casa Herbalife programs.”

She adds that she has gotten to know a young man in one of the charitable organizations in South America who this year told her about playing for a rugby team.

“He told me about the places he had gone outside the city—the Bahamas, Miami and other places,” she says. “That all happens because of Herbalife. It was a very touching moment. We know these stories because we have built real-life relationships with the children. We’ve watched them grow and develop, just like we would in our own families. The Herbalife Family Foundation and our Casa Herbalife program provide that exciting opportunity. I love the direction we’re going.”

The Key: Distributors
Browning emphasizes that the more engaged Herbalife distributors become, the better the whole project works. Distributors often get their first taste of giving to others when they become an Herbalife distributor. That’s because Herbalife actually teaches philanthropy. Like most direct sellers, Herbalife distributors usually get involved in the business because they want to make extra income. And when money is short, charitable giving isn’t typically a large line item in the family budget.

“Our distributor demographic doesn’t come from highly philanthropic groups. Their parents didn’t sit on boards of directors. They’re really boot-strappers,” Browning says. “It’s our obligation to teach them how to give back to their community and the most appropriate way to give money. That’s why it’s so important to us that our Foundation is transparent and has strong accountability with grantees so we can say to donors—our distributors—that this is how it’s supposed to be done.”

Browning makes a point of speaking to groups of new field leaders to explain how HFF selects grantee organizations, how it raises funds and why it believes so much in giving back.

“It’s not just about the money; it’s also about volunteerism,” she says. “It’s really about getting involved and giving back your time as well as your money.”

Philanthropy Made Easy
HFF provides many ways that distributors can participate. Every February 1, Herbalife celebrates Mark Hughes Day, honoring his life and the legacy he left through the company and the Herbalife Family Foundation. Then fundraising activities are held to benefit HFF charities during the month.

In addition to their own volunteerism in February and throughout the year, distributors can designate a portion of their earnings to go to HFF charities. Distributors and the general public may make donations in cash, via credit card through the HFF secure website, or through a gift of stocks, bonds or other assets. Distributors also participate in fundraising activities at almost every Herbalife extravaganza around the world—everything from buying T-shirts to bidding for merchandise at an auction. The Herbalife staff facilitates the special events and fundraising, even helping find celebrities to participate. Distributors donate and in return can have their photo taken with the celebrity. Everyone benefits.

They also dig deep to support Herbalife’s efforts toward disaster relief. In 2010 HFF worked with trusted charitable organizations such as the Red Cross to provide disaster relief in Thailand, Chile, India and Mexico. HFF sets up a special fundraiser for each disaster, and money raised through it is designated toward relief efforts for that specific disaster.

Such philanthropic work reflects Herbalife’s values of making each of its communities a better place to live and work. Executives believe that the company should be a good corporate citizen and that it should offer distributors a way to be good civic leaders.

“Michael Johnson tells us that his mother used to say to him, ‘To those whom much has been given, much is expected,’ ” Henderson says. “That’s his philosophy of life, and that’s the culture at Herbalife. All of us—distributors and employees—feel so fortunate to be able to give back.”

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