For-Profit Businesses in the Social Cause Economy

John SchoberBusinesses, Cross-Sector Collaboration

When you think of the social causes, you likely think of the players as nonprofit organizations or government agencies. But, the reality is that for-profit businesses have been an important cog in the social cause economy for some time. Consider the following ways that businesses contribute to social causes:

  • Businesses are an important channel to donors and volunteers, i.e. in the United Way model
  • Social causes benefit from the knowledge and experiences of lawyers, accountants, managers, IT professionals, etc, as board members and volunteers
  • Businesses are cheerleaders for civic engagement, as they encourage their workers to vote, participate in the census, and get involved in their communities
  • Businesses are drivers and/or participants in social causes, e.g. through corporate foundations;  diversity, equity, and inclusion efforts; workforce development initiatives; economic development initiatives;  and others

Businesses also  benefit from social causes, whether as the target of specific efforts or as secondary beneficiaries:

  •  Services provided via social causes make workers more productive, e.g. social services (i.e. addiction support, poverty/homelessness), workforce development, entrepreneurship
  • Nonprofit organizations are training grounds for business professionals, as businesses often use board participation and volunteering as part of leadership/employee development programs
  • Community efforts to retain and attract people (arts and culture, placemaking, education, etc.) make it easier for businesses to retain and attract employees
  • Participation by workers in social causes helps workers achieve work-life balance as these efforts are a source of meaning and purpose in their lives

Like many other elements of society, the role of businesses in the social cause economy is changing. We see three dynamics that will be particularly interesting to watch over time:

How will corporate giving and volunteering programs coexist with funding and volunteering platforms?

Businesses continue to be an important channel to donors and volunteers for nonprofit organizations, but that channel is not as pronounced as it used to be, as platforms like VolunteerMatch and GoFundMe have made it easier for individuals to support causes without doing so through their employers. These platforms are here to stay…will employers-as-channels no longer be necessary, or will employers evolve to continue to play an important role?

My perspective is that these and other platforms will be important tools for businesses in their employee engagement and development efforts. Businesses are motivated to promote teamwork and camaraderie among their employees and to provide professional development opportunities, and volunteering and board participation are effective experiences for both. But businesses find that the exercise of creating and managing board and volunteer opportunities takes a lot of work, so tools that make it easier are welcome. Likewise, employees will find these tools helpful for creating their own team-building experiences at work and for building skills that they can use in advancing their careers.

How much will “meaning and purpose” drive employment?

There is no getting around it…finding meaning and purpose in some jobs can be difficult (brings to mind my high school job of drying golf balls at the driving range). But increasingly, workers are looking for purpose as a key factor in their choices of careers, jobs, and employers. This is especially true for the millennial generation.  In response to this, businesses are implementing employee engagement and corporate social responsibility efforts that are attractive to employees. What role will these benefits play vs traditional factors (salary, health care, etc.) in attracting and retaining employees, and will they mitigate the problem of job-hopping?

Various reports, including The Millennial Impact Report from the Case Foundation, indicate that the importance of meaning/purpose/mission in the selection of careers, jobs, and employers has grown quite a bit recently. The trend thus far could be a product of low unemployment and a decade-plus recovery, and it could change significantly when there is a change in that trend. But with the investment in employee engagement efforts and the support of volunteering and community-focused team-building exercises that we see, I will be surprised if there is a diversion from the long term trend.

How far will the for-profit sector go in becoming agents of change? 

The growth in B-Corporations and Corporate Social Responsibility efforts, and the momentum building around stakeholder capitalism suggest that the trend of businesses as agents of change is here to stay. The real question is how far will this go? It is hard to imagine the community impact motive even approaching the profit motive as a factor for businesses generally, at least until a system for measuring community impact and evaluating the corresponding risk and reward is broadly accepted.  But that doesn’t have to happen for us to see dramatic changes in the degree to which for-profit businesses advance social causes.

The causes in which I expect to see the most change are those in which the profit motive and the community impact motive are strongly aligned. Local economic development and workforce development are great examples, as the interests of businesses and the community are in lockstep. It is no surprise that these have been taking on greater importance in communities, with increased investments and evolving business models in entrepreneurship, apprenticeships, and business retention and expansion, for example.

It is also encouraging to see that some social causes like diversity, equity, and inclusion and the environment are evolving in the context of businesses to be more motivated by opportunities for reward (i.e. better productivity, more profits, employee attraction, etc.) rather than by risk mitigation (avoiding lawsuits). To the extent that these causes can be tied to profits, I expect to see significant change here as well.

Lastly, it will be interesting to watch how the advocacy for stakeholder capitalism evolves for large corporations vs small and medium-sized businesses. Small and medium-sized businesses that are local or regional in scope are often ‘tied at the hip’ to the communities in which they operate, and so could be great examples for their larger counterparts, who seem to be the targets of the advocacy for more focus on stakeholders rather than stockholders.