Why integrate a social mission into your business?

You’re an entrepreneur with an idea and maybe a business plan, a small-business owner or the head of mid-sized company.  To expect you to add social purpose to your business just because it’s a good thing to do, is foolish.  You have a bottom-line and other obligations to meet.  You don’t have extra resources to allocate to ‘doing good.’

But doing good is a business strategy, not merely a moral argument or trend.  Businesses with a strong social mission have a competitive advantage.

1. People will talk. consumers, competitors, investors, suppliers and the press.
2. Increased productivity and employee morale.  People want to work for a greater purpose and want to know that their work makes a difference. Employees who are happier work harder and smarter because the work has become personal.  These type of employees are advocates for your company, not just employees of it.
3. Consumer preference. Consumers prefer companies that make a positive impact on the world.  Eighty-three percent of U.S. consumers want more of the products and services they use to benefit causes (2010 Cone Causes Evolution Study) and 62% of global consumers will switch brands if one works with ’good causes’ and the other does not (Edelman, 2010).
4. Innovation.  More companies like Nike, GE and Interface are using sustainability to drive innovation. Seventeen years ago, the late Ray Anderson, who served as Interface’s CEO, committed to becoming a zero-waste company by 2020. Since then, Interface has eliminated hundreds of millions of dollars in resource and waste disposal costs, increased sales by more than one billion and changed the way the entire carpet industry does business.
5. Influence.  Your company’s initiatives will be modeled as more companies realize the benefits of having a social mission.
6. Lower marketing costs.  Your mission will help your marketing. A line of grocery products founded and once produced by Paul Newman (Newman’s Own) is a somewhat banal story that merits only a mention in the press. The fact that the company donates 100% of profits to charity is a story that sticks, intrigues and encourages participation through purchase.
7. Talent recruitment.  People want to work for employees that care; a social cause is indicative of a favorable workplace.
8. Attract talent for less. Kevin Jones of Good Capital calls this “meaning premium.”   People want to work for a company that allows them to contribute to a greater purpose and are willing to be paid less for the opportunity (NB: this isn’t an argument for underpaying employees).
9. Attract young talent.  Teach for America is a top employer of exceptional college graduates. Last year 12% of  seniors at Ivy League schools applied to work with Teach for America, vying for one of the most challenging and low-paying jobs out there.
10. Talent retention.  When employees are part of a larger mission and feel their contributions make an impact in the world, they’re engaged, proud and motivated.
11. Savings in resource and disposal costs. You’ll save money by reducing energy, water and material consumption. Producing less waste and reusing water or materials costs you less to purchase and less to haul away.
12. Supplier advantage.  Stonyfield Farm pays its organic suppliers a floor price that won’t ever drop, protecting its suppliers from market swings and production hiccups. In return, when supply for organic milk or sugar outpaces demand, Stonyfield is first on the delivery list and is guaranteed a fair price because it’s built a relationship with its suppliers.
13. Risk management. Being in tune with your stakeholders alerts you to potential risks and helps you safeguard against them. An offshoot of this is that your company is better informed and positioned to identify new business opportunities.
14. Future-bound company.  Successful companies that others evangelize and model represent more than just a product or service. They represent a philosophy, culture or experience. When you channel this back into your business, you’ve made your competitive edge that much more edgier.
15. Fun.  Science proves what most of us know–making a difference feels amazing. We feel happy, enlivened and creative.

Your company (1, 5 or 200 employees) is the ideal size to run a purpose-driven business. Although larger brands get more attention for the resources they can bring to their campaigns your company holds an advantage.

1. You’re more agile. You can plan, execute, track and revise nearly on-the-fly. Less memos, less approval, less internal politicking diluting the programs.
2. You can take more risks with your social mission. You have less of a reputation to uphold. You can be a renegade, a heretic, recognized for your commitment to social change and your willingness to try new ideas.
3. You face less financial accountability. Smaller companies aren’t held to the same monetary expectations as larger ones. Your programs’ strength lies in their impact and effect rather than your company’s financial commitment.  A big brand cosmetic company’s one-time campaign cost $500,000 in an upfront investment to its partner charity, the cost of a micro-site and prize expenses, and delivered just a luke-warm impact. Your cosmetic company can affect people more directly by offering products and makeovers to women re-entering the workforce in partnership with a workforce re-entry program and your local Dress for Success chapter. Cost? In-kind only.
4. You have a fresher slate. Small companies are often seen as more personal, less greedy and less noxious. There’s less initial cynicism of your motives and choices.
5. You entice stronger non-profit partners. Smaller companies are rarely able to attract (nor should they try to) the top crust of non-profits.  With fewer wooers and less brand value, a regional non-profit will be more willing to commit time and labor to the project, as opposed to just a sliver of its name recognition.
6. You can galvanize your employees around your mission more easily. As companies need to convince consumers of their sincerity, they also need to convince their own employees. The smaller a company, the shorter this process. Employees help determine the social mission, shape it and execute it.
7. You have more of your customers’ attention.  Generally, the larger a company is the more we view it as a commodity and the less likely we are to see it as an educator or driver of good. Would you be more willing to support a pin-up campaign at Walmart or your neighborhood cupcake bakery? One of your advantages as a smaller business is the frequency of touch points that you have with customers. Use these opportunities to bring them into your mission through storytelling, contribution and advocacy.

Having a social mission is not a drain on company assets or a tangential program, it is a business strategy that yields a competitive advantage, which smaller companies can better leverage.

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“What would you say to companies that see improving even one piece of their supply chains as too expensive?” I asked.

Joe Sibilia had just shared one method to help companies become more sustainable: take one ingredient in the supply chain and use it to create a social benefit. This is what he had done with Ben & Jerry’s through the aptly named 1 Ingredient program.

Partnering with Greyston Bakery, Ben & Jerry’s uses one ingredient in its products, brownies, to create jobs for the chronically unemployed–former convicts and addicts. Greyston Bakery provides its Brownie Artisans with living wages and skills training and invests all profits into the Greyston Foundation to support job development, healthcare, childcare and housing.

By re-imagining the production and sourcing of just one item, Ben & Jerry’s has supported the rehabilitation and growth of thousands of society’s most marginalized people over the past 23 years.

But not all companies are Ben & Jerry’s. Anticipating that most companies think differently (or not at all) about their impact on society, I asked Joe how he would coach companies to see the financial value in creating something that benefited society. He gave an exasperated grunt.

“I’d Say to the company, ‘If  you’re valuing your supply chain on the narrow scope of cost-effectiveness and you really wanted a cost-effective approach, you’d use slaves, child labor and put up with unsanitary working conditions.’”

Joe’s right, of course. We all care about more than just cost and profit. But we use money as a false restriction, assuming there’s a trade-off between money and doing the right thing. Ben & Jerry’s didn’t take 5% of Chocolate Fudge Brownie sales and donate it to workforce development. Instead the company used market systems and creativity to deepen its impact at no additional cost.

A long-time social entrepreneur, Joe Sibilia’s ventures include CSRWire, the social investment bank Meadowbrook Lane Capital and the Gasoline Alley Foundation, which incubates socially responsible businesses in inner city neighborhoods.

I spoke to Joe in preparation for a session I’m leading on integrating social responsibility into your brand at Sustainable Brands.  If you’re interested in attending the conference (June 7-10 in Monterey, CA) email me for a 20% discount. This will be my second year attending; it’s an absolute playground for people interested in using business as a force for change.



Businesses are held financially accountable by the market. Increasingly, we’re holding them accountable for their social impact as well. We reward humanistic companies with our purchases, our employment and our advocacy.

Yet our relationship (both the positive and negative) with nonprofits hasn’t evolved. We expect nonprofits to be socially effective and financially solvent without much reward for success in either category. Sure, Charity Navigator rates the efficacy of nonprofits, but that holds about the same amount of sway as a Good Housekeeping seal today. It’s a minimal influencer of donor dollars and social benefit.

Why don’t we apply the same market forces to reward nonprofits for their social impact and penalize them for lousy financial performance?

Robert Egger, founder of D.C. Central Kitchen, advocates a return on investment (that is, a donation) that corresponds to the social productivity of nonprofit. Currently, a $20-donation to DCCK helps the organization train and put to work hard-to-employe individuals, the financial impact of which is significant. These gainfully employed individuals now pay taxes and are less likely to revert to crime or drug use, saving tax payers money in social service and prison costs. Much like a business, DCCK is able to leverage my $20-investment. Egger’s proposal to the nonprofit sector is to pay donors yearly dividends on their donations, based on the organization’s performance.

In a core conversation on crowd-sourcing social impact at SXSW, Brian Reich advocated that nonprofits that can’t cut it, should bow out. It’s a heretical perspective (applying supply and demand principles to social aid) that I share. If an organization can’t levy adequate (donor) support, it should make way for ones that can.

Cause Capitalism is about creating stronger businesses by integrating a social objectives. Why not also look at creating superior nonprofits by applying specific market mechanisms?

*N.B. I understand the absurdity of the term ‘nonprofit’ in this post, but it’s an understood label that I hope allowed me to communicate my point without messy jargon.

Doing good is a business strategy, here’s how to start and how to do it better.

That’s the flag I’ve been flying for three years and 250 blog posts. Next week, I’ll be speaking with a group of entrepreneurs and employees practicing varying levels of social sustainability (and, I hope, some who dismiss it altogether) at South By Southwest in Austin.

I’m leading a core conversation, Your Business + Social Mission = Happiness + Ka-Ching, which will be provocative and educational. Anyone with access to the Interactive programs can participate.

If you’ll be at SXSW, I want to meet you. Here are 4 ways we can connect.

• Join the core conversation, March 12 from 2-3 PM.
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• Come to The Good Capitalist Party, March 12 from 6-9 PM. The event is co-hosted by Ashoka’s Changemakers (I do work for Changemakers), Social Capital Markets, Acumen Fund and Good Company Ventures.
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• Make it easy for me to invite you out! I’ll be in Austin March 10-15. Email me at olivia[at]causecapitalism.com and let’s plan to run into each other.
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• Find me on SXSocial.

…that the conversation is turning from Why? implement a social mission to How?

…that increasingly more entrepreneurs, veteran business owners and employees are testing ways to connect their passion to product and profit; and

…that I’m able to support you, the entrepreneur, business owner or employee (four times as many people contact me every week than just five months ago).

This means that more of us our doing our work to bring about social change, and we’re using the market (unshakeable supply and demand!) to do it.

While your peer group of social business leaders is bigger than ever, you’re still part of a small vanguard that’s reconstructing the way we tackle the world’s problems and do business. So dialogue, test and evaluate. And most importantly, let your instinct embolden you to act on ideas that others see as radical.