Is your business solely focused on profit-making or does it try to make a social impact, too – aligning profits with purpose?
What does social impact mean?
“Social impact has become much more than just a business strategy — driven by Millennials, social impact is, instead, a way of life and a way of being in the world. It has undeniably changed the way corporations do business and continues to influence startup culture.” (Barbara Kurshan, “What Comes After ‘Doing Well By Doing Good’? Redefining What We Mean By Impact,” Forbes)
I’ll disagree with one element of Kurshan’s quote. Social impact has been around since the 80s. Although it’s true that Millennials are driving it currently, in 1983, American Express launched a cause-related marketing effort that raised $1.7 million for the preservation of the Statue of Liberty and Ellis Island. Millennials were barely born at that time.
What about your small business? Surely, practicing social responsibility is reserved for the corporate sector, right?
“Wrong. Small businesses have been involved in social responsibility long before the term “corporate social responsibility” was coined. They didn’t necessarily broadcast their practices and did them for altruistic reasons, not realizing there were business advantages, too.” (Elaine Fogel, Beyond Your Logo: 7 Brand Ideas That Matter Most For Small Business Success)
Why should your small business practice social responsibility for a better world?
According to the 2017 Cone Communications CSR Study:
- 63% of Americans are hopeful businesses will take the lead to drive social and environmental change moving forward, in the absence of government regulation
- 78% want companies to address important social justice issues
- 87% will purchase a product because a company advocated for an issue they cared about and 76% will refuse to purchase a company’s products or services upon learning it supported an issue contrary to their beliefs
What are the benefits of practicing Small Business Social Responsibility? (#SBSR)
Small business social responsibility can:
- attract, retain, and motivate employees while engaging them in SBSR activities
- enhance the company’s brand reputation as a good “corporate” citizen
- promote customer and brand loyalty
- increase customers and sales
- save money (recycling, turning off power, retaining employees)
- expand the company’s visibility in the community
- provide good stories and content to share with target audiences
- build up competitive advantage
- foster greater public trust
(Excerpt from Beyond Your Logo: 7 Brand Ideas That Matter Most For Small Business Success)
In a Forbes article last year, contributor, Brian Rashid states, “Many companies are putting more resources into philanthropic work, and for good reason. Along with the warm feelings associated with altruism, business leaders contributing to the social good recognize that benefit philanthropy can provide for any company.”
He lists five benefits for businesses:
Giving the Company a Sense of Purpose
“Committing a business to philanthropy creates a vision for the company beyond turning a profit. This helps re-energize a business leader’s drive due to having emotionally fulfilling projects on the docket. That renewed passion can then manifest itself in business leaders’ work and vision, driving innovation and eventual growth.”
Maintaining the Brand Story
“One of the most important aspects of brand value and loyalty, is whether or not the brand is authentic and relatable. As you sculpt out what your brand stands for and ought to represent to consumers, social good works to add another layer of depth and realism for that narrative. Developing an authentic and socially conscious brand story will help set you apart from your competition.”
Facilitating Employee Engagement
“Employees who believe in their organization’s mission and projects will invest more into their work. By setting up philanthropic projects in which employees can participate, business leaders can inspire workers and establish some passion among them. Much like how social giving can drive the creativity of business leaders, it can also spark innovation among office workers. An inspired employee is often more productive than an unfulfilled one.”
Building Bonds with The Community
“Many believe that for-profit businesses hold unwritten social contracts with their communities. Much like their employees, consumers prefer interacting with organizations they respect; by entering the community through philanthropic work, businesses can establish a brand that people feel good about.”
Connecting with Target Demographics
“The connection with certain customer bases facilitated by community work goes hand-in-hand with building community bonds. By doing philanthropic work in local communities, your company can interact with the markets you wish to attract, while catering to what attracts them. Building strong bonds with these groups can then facilitate a loyal customer base.”
Social impact needs to be part of your business’ DNA
“Social impact can’t be ‘a nice to have’ or something you add on so that your company is able to say, ‘We give back.’ Social impact works best when it is an integral part of your company’s strategy, culture and values.” (Erin Reilly, “6 Tips for Making Social Impact Essential to Your Business from Day One,” Entrepreneur)
For ways to make social impact part of your company’s strategy, culture and values, read Erin Reilly’s article.