If you run an organisation where creating social impact is your primary aim, you are inevitably going to have to make decisions that compromise financial returns in favour of your social impact.
Imagine this: You’ve signed up to being a social entrepreneur, you’re on a crusade for change and you’ve committed to the highs and lows that will come your way. Work life balance feels like a mythical utopia right now and you find yourself dreaming about overheads and cash flow. In addition to the stresses of being your own boss you also find yourself facing moral dilemmas.
On one occasion an opportunity to scale your organisation comes up. It would allow you to grow much faster than you ever dreamed, but to take advantage of the offer you are required to flex your organisational values and change your model.
What do you do?
Here are two real examples to help bring this to life:
Recently I visited an organisation in Delhi called Goonj who use clothing as an alternative currency. Goonj have recognised that a surplus of clothing exists and have made it their aim to match this surplus to a need. They take donated items of clothing and approach communities that lack clothes, they then agree upfront on a piece of community improvement work that the community will complete to earn the clothes. The clothing is given as payment once the work is done. The improvement that is made is unique to that community, but it’s always bottom-up and based on need. One village may build a bridge, another a road. The model leaves a legacy of community cohesion and togetherness. This legacy means that the community improvement projects continue long after Goonj have given the clothing and left.
It’s a great model and highly replicable, more donated clothes create more impact. However as a values led organisation they firmly believe a donation of your old clothes is not a gift to them, it’s a favour to you. The focus is on the dignity of the recipient not the pride of the donor, so they do not market themselves aggressively or campaign for contributions. They’d rather fewer donations than those given for the wrong reasons. As a comms person I can’t help but think that a little more focus on marketing could achieve a big spike in contributions, but doing it the right way is more important to Goonj than doing it the fastest way.
A second case study is of one of our fellows (who I shall keep anonymous for the sake of this post). They were approached out of the blue and offered a fairly hefty sum of money. The amount was significant and the terms very favourable, it came with just one condition: the investor wanted to become chair of the organisation. The social entrepreneur was initially flattered by the offer and excited about the potential injection of cash and expertise, however, after several exchanges the investor suggested it might be a good idea to change a core element of the organisation’s model as it made business sense. The problem was the part they wanted to change was having the deepest social impact – by providing employment opportunities to a particular group- even though it wasn’t the most profitable way of operating. Doubtless to say the social entrepreneur declined the money, happy in the knowledge that the way they were operating was best for their beneficiaries (even if it wasn’t generating the most sales).
Just like the investor aforementioned, many may not understand a social enterprise like the founding social entrepreneur or staff who are there for the day-to-day. Values are at the core of what social enterprises do and profit is the grease that helps them fulfil their aims. Social enterprise is not conventional (and will never be so) and only those inside an organisation can really decide what is best for them when business and values rub up against each other. Both organisations above have worked out what is non-negotiable and have stuck true to these principles, if you are thinking about growing, I would encourage you to do the same.