How to balance purpose and profit as a social entrepreneur
26 Feb 2020
You need to bring in that cash-money. But income sources don’t always align with impact objectives. Our head of communications Sophie joined a cohort of SSE students to learn more.
It used to be so easy. You knew exactly how you wanted to have impact, and you were scrupulous about taking on funding that was hyper-focused on those objectives.
But now you’re running an organisation that’s bigger. You’ve got a team, you’re striving for sustainability, and you might be considering expansion.
You want to diversify your income streams and bring in more money (who doesn’t?). But the opportunities presenting themselves don’t drive your impact goals in a clear-cut way.
Yes, the revenue will ultimately help you achieve your social mission. But is this type of trading or partnership really part of your purpose?
The occasional tension between mission and money will be familiar for many of you running established social enterprises, charities and community businesses. It’s a topic we explore on many of our Trade Up programmes, which support leaders to increase income and impact, with a focus on diversifying income through trading.
I wanted to learn more about balancing purpose and profit, so I joined a session with students on our Health and Wellbeing Trade Up Programme, run in partnership with Guy’s and St Thomas’ Charity. The session was led by the brilliant Bev Morton of My Next Chapter, who often works with the SSE community to help us explore purpose.
Here’s what I found out:
Purpose = focus
Making decisions about diversifying income can feel stressful. When should you follow the money, and when should you say no?
“Knowing your purpose is helpful in focusing. Social entrepreneurs are often drawn to every opportunity, because we’re highly enthusiastic and opportunistic people,” Bev explained. “But that can lead to burnout.”
Being clear on your purpose gives you a framework for figuring out your next steps, and understanding when to say no.
What do we mean by “purpose”?
“Purpose is about knowing what your ‘guiding star’ is,” explained Ian Baker, SSE’s head of learning. “Purpose is the part that stays fixed. Your model might change, but this guiding star should be a decision-making tool.”
Bev shared these useful definitions of the difference between purpose and mission:
|Mission||What you do||
||Example – the BBC: “To enrich people’s lives with programmes and services that inform, educate and entertain.”|
|Purpose||Why you do it||
||Example – the BBC has six purposes:
To explore your organisation’s purpose, Bev suggested working through these questions:
- What’s important now?
- Where are you going and why?
- Where are you now?
- Where have you been?
You could also try…
- Simon Sinek’s TED talk: Start With Why
- this advice article from Macquarie,
- this guide from Nobl Academy that looks more broadly at purpose, vision, mission and values
Don’t forget to involve your team and stakeholders in the process!
Keep returning to your purpose
Spending time developing your purpose is pointless, if it sits on a print-out in a drawer gathering dust.
Your purpose should feel like a living part of your daily work. It’s a decision-making tool. At SSE for example, we have developed a checklist for potential partners. If a corporate promotes aims that obviously contradict our purpose to create positive social and environmental change, we won’t accept money from them – however alluring a big pot sometimes seems!
Involve your team
This isn’t just about decisions you take as a leader. It’s about keeping your team involved and motivated.
They signed up to work for you because they believe in the change your organisation wants to make in the world. They’ll no doubt have strong feelings about that!
So consult your team, when you’re unsure about whether a source of income is pulling you away from your core purpose.
In an ideal world, all the money you bring in would perfectly drive your impact aims. But things rarely work out that neatly. Social entrepreneurship is a spectrum – some activities will feel more social, others more enterprising. Sometimes these two elements will feel completely at odds with each other.
There’s often no right or wrong answer in these situations. Models have to evolve in response to changing environments. “And flex is really important, because it allows resilience,” as Bev pointed out. The role of a leader is navigating ambiguity, and making what feels like the best decision at the time.
In hindsight, you won’t always get it right. And that’s okay.
Just keep checking in with that purpose statement as a guiding star. It will help you justify the actions you took at the time, and keep you and the team motivated to achieve what you set out to do.
How do you toe the line between profit and purpose, when it feels like they’re at odds? Let me know @sophiehobson and @SchSocEnt on Twitter