Business leaders frequently adopt “socially responsible” practices in the hopes of appealing to a wider, socially conscious clientele. But sometimes, the very fact of good corporate citizenship can turn would-be customers off.

Just ask the folks at Give Something Back, an Oakland, Calif.-based office supply company that donates nearly 60 percent of net profits to charity.

“The Give Something Back mission – donating our profits – can be perceived as ‘unsafe,’” Sean Marx says. “We’ve always had...

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