Making money is great, but as companies grow and reach stability, many founders begin to have deeper motivations. What can you really do with your business? How far can you go to make a genuine impact? Whether you’re looking to change peoples lives, leave a legacy, or just solve a problem in your local community, you can do it through business. Social impact companies are growing every year, and founders are finding endless ways to fuse business, creativity, and problem-solving. And as we’ve learned through our project, Penji for nonprofits, giving back is one of the most rewarding feats a team can accomplish together.
Social impact companies (aka social enterprises) can be loosely defined as ventures that focus on work that solves community problems in a conscious, sustainable, and systematic manner. In this article, we’ll discuss why they are important, give a few examples, and explore how you can create a social impact program for your sustainable business.
Why are social impact companies important?
Why is social impact important for business? Most companies are profit-driven, but it doesn’t mean you can’t make money while making the world a better place.
Here are a few reasons why social impact companies are valuable in any industry:
- Filling gaps. Social impact companies fill in the gaps that state aid can’t reach. It may be through giving people jobs, supporting an under-privileged group, or providing an avenue where local goods can be sold. They don’t simply offer charity but empower people to make a dignified living.
- Raising awareness. The social impact of business can’t be ignored. Apart from providing livelihood, it can also bring awareness to a certain issue. For instance, cosmetic brand Lush is known for supporting small, grassroots organizations and allocates funds to uphold animal protection, human rights and environmental justice.
- Fostering development. The conscious intent to make the world a better place makes social impact ventures reliable partners for development. And the largest social impact companies aren’t just changing lives – they are also making bank.
What are examples of social impact programs?
Social impact programs typically put a part of the profits back into the people they support. It may involve giving a certain portion of profits to benefit a community. But it can also be pledging donations for every item sold, as in the “buy one, donate one” model.
But some social impact companies take it a step further. Besides putting money back to community programs, they also make sure that their supply chain is clean and sustainable. And it goes without saying that having sustainably-sourced raw materials is one of the best ways to create a social impact. After all, most raw resources are cultivated by or obtained by low-wage earners.
Apart from that, most social impact ventures provide regular employment to vulnerable people to give them financial independence. In short, almost every aspect of a business model can become socially impactful when done right.
Here are a few social entrepreneur examples that put the concept into action. We’ll discuss how these ventures apply their social impact programs in the next section.
A Wellness Business that Saves Women
Savhera is a wellness-based business that sells essential oils. They create employment to help Indian women escape exploitative sexual work. As one of the most vulnerable sectors in the country, giving women employment can help them live a better life.
A Low-Waste Personal Care Business
Vida Bars is a social impact company that uses clean source eco-friendly materials to sell personal care products that mostly contain vegan ingredients. They value cleanly sourced raw materials and lessen their packaging.
A Company that Detects Fake Media
- Truepic is a startup provides image and video verification for clients. In an age where images can be easily manipulated by anyone, the truth is harder and harder to catch. Their services allow institutions to achieve the highest standards of accountability and transparency.
How to create social impact programs that make a difference
- Begin with a worthy mission. A good social impact program treats communities as partners to achieve a mission. That means giving the people the power to decide what kind of services and help they need. After all, it’s the people that best know how to approach their problems. It is with their help as well that we get to see solutions.
For example, Savhera, which we discussed above, started out when the founders spoke to an Indian woman who was being trafficked. The woman needed employment to be freed from sexual exploitation. And the idea came to be. Today, the company’s essential oils benefit Indian women and continue the traditional healing and religious practices.
- Connect with the right people. Next, it pays to connect with key influential people in the community you want to help. Who are the people you can network with so that the program will have a stronger impact? Having key people as point persons can help develop trust and credibility in social enterprises.
The story of Truepic shows us how connecting with the right people can make a difference. The venture originally did not start out as a social impact company. However, upon the advice of US diplomate Mounir Ibrahim, the company began to pivot. The founders decided that their innovative image verification tool may have more impact on curbing accusations of false claims.
- Make it sustainable. When building a social impact program, it’s crucial to keep in mind that these are not a one-time deal. Instead, know that they are the sum of efforts and structures that make long-lasting change possible.
For instance, making impact reports, and checking up on the people you’re serving are just some of the ways you can continue showing support. After all, you have to prove to the people that your intentions are not just for show.
Vida Bars is a good example of a sustainable social impact program. After all, it’s incorporated right into their product – they don’t use plastic packaging and they mostly use vegan ingredients.
Starting your own social impact company
If you’re looking to start a social enterprise, all of your current business skills apply – networking, marketing, and deciding on your mission and values. It doesn’t matter if none of the other businesses in your area are taking the leap. With a bit of grit and determination, you can take your business model from basic to revolutionary.
One thing is clear: social impact companies have a real potential for creating change. In the end, it’s up to each entrepreneur to decide what really matters to them. There’s always something bigger than profit.