For many social entrepreneurs, making money is bad PR. We need to kill this stigma, before it’s too late.
5 min read
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“Oh, so you’re a for profit.” Over the course of my 20-year career as a social entrepreneur, I’ve been on the receiving end of this loaded phrase more than a handful of times. At first, people are impressed with my company’s mission to make the world a better place. Then I explain that we make money and are profitable. With that, often, comes judgment.
For those of us trying to tap into the power of economic markets for good, this stigma is unfair — and quite frankly — not helpful. Furthermore, it’s a dangerous perspective for a world that needs to promote and uplift purpose-driven entrepreneurs more than ever.
By default, people generally assume nonprofits are good. They praise and support a charitable organization’s mission to improve the world. Money-related nonprofit terms like “fundraising” and “donation” conjure up, for most people, warm and fuzzy associations with goodwill and altruism. Charity status comes with a protective brand armor.
On the other hand, while most people admire a social entrepreneur for her core mission to do good in the world, they’re simultaneously less forgiving — even suspicious — when she brings up terms like “earnings,” “revenue” and “profit.” Concerns about greenwashing are reasonable, but let’s get real — if a business can produce revenue and do good at the same time, we should all be thrilled. (That is of course, unless the company is a monopoly or otherwise unjustifiably extracting funds from people or organizations.)
I feel very fortunate that my own social enterprise has grown for two decades. Sadly, however, I’ve also seen many promising social entrepreneurs focus too heavily on promoting their mission, for which they are guaranteed positive feedback. They then end up sidelining their margin, which may not be as praise-invoking — but is critical to their survival. Most of the social impact conferences I attend concentrate on the inspirational good attendees are doing. It seems even industry insiders are uncomfortable talking about the money-making side. And this is the area in which most social entrepreneurs could really use the help.
None of this, of course, is to undermine the game-changing, wide-ranging work effective nonprofits do. Often, nonprofits are the best and only way to accomplish positive outcomes via the goodwill economy, such as donations, sponsorships and government funding. On the other hand, social enterprises are able to tap into a different source of funding: the powerful forces of market economics. Each comprise an important part of the greater ecosystem needed to power positive change.
Let's consider that by 2050, there will be an estimated 9.7 billion humans on our planet, and more than 11 billion by 2100. Experts know this impending growth in population and consumption will exacerbate global problems including environmental destruction, illness and poverty. In this climate, social entrepreneurs will continue to be a critical force in the effort to tackle major, pressing issues like these. We need to elevate and promote them — not stigmatize them for profitability — so they can proudly work alongside nonprofits and other well-intentioned forces. Furthermore, in doing so, more investors will be compelled to fuel purpose-driven companies, which will in turn tap into the power of markets to protect people, animals and the planet, in a virtuous cycle.
Some good news is that, over the past decade, America has already taken steps toward creating this new landscape. Since 2010, 33 states across the country have passed legislation allowing for the creation of “benefit corporations.” These are a type of for-profit corporate entity that includes positive impact on society, workers, the community and the environment, in addition to profit. However, in most states, benefit corporations are still treated like all other corporations for tax purposes. Does it really make sense to put a small mission-based business in the same tax category as, say, Exxon — simply because it’s not purely a charity? Perhaps the next step is to shift, at a large scale, how we measure and incentivize the unique work social enterprises do.
Recently, an environmentally conscious Starbucks employee named Stephanie Muttillo started a petition on my company’s advocacy platform, calling on her employer to stop using wasteful plastic straws. Within days, nearly 150,000 people had signed on, and Starbucks soon announced that it will stop using plastic straws in all of its 28,000 stores worldwide by 2020. Many restaurants and municipalities are following suit.
It’s a victory that will have a significant impact on reducing global plastic pollution. However, without our profit-generating donor recruitment business model, we would not be able to maintain the free advocacy platform that makes thousands of successful campaigns like Stephanie's possible. It is profit that provides us the ability to reinvest back into the platform that serves our mission to make the world a better place. I’m proud of this, but it’s taken time to get to this point, juggling a double bottom line of doing good and making money. It’s a journey that would’ve been a whole lot smoother, without the added stigma of profitability.