There're many rewards to business ownership (other than money), from the freedom of being your own boss to the pride that comes from having changed your market by providing a better service. For me, and for many businesspeople, there's another reward; having a purpose. In my case it was to change how people looked at and executed PR. Even if it's not changing the lives globally, there's still an immense satisfaction in a few happier people around the world. Even a recent interview with Lifehacker I did got me several emails saying that I helped make someone's working life better. That's all part of the plan.
As a result of these rewards, the concept of the purpose-driven business has emerged, finding its way into big business and the startup ecosystem. It's not just about helping through words either; studies have shown that participation in charitable activities increases employee morale, and entrepreneurs are working hard to create businesses that make societal impact with the work they do. Famously Salesforce CEO Marc Benioff has said that companies need to focus on having a purpose, which can (in his case) include donating a section of profits toward charitable work. Though that might be impractical for most, there are many things to know about the purpose-driven way.
What is a purpose-driven business?
Businesses have often been divided into two major types: non-profits and for-profits. This means that a great deal of people assume that to be purpose-driven you have to be a non-profit, sacrificing the, well, profit of being a for-profit enterprise. That doesn't always the case. Ari Kalfayan, founder of the Startup & Tech Mixer, an organization that helps entrepreneurs find their purpose early in their careers, says purpose-driven businesses are different from non-profits in that they are profit-earning enterprises with a conscience. You don't have to be an altruistic samaritan; you simply have to care and think of ways that you can improve the world in even the smallest way. For Kalfayan, what drives a purpose-driven business is that founders see a need within society and they work hard to fill that need.
"There are two types of entrepreneurs in the community," he said. "One, they just want to get rich, ... and that's fine and we're totally okay with that. And the other side is people who actually want to enact change in the world. And that change can mean many things: social change, change in business. [This means that] they may be giving away products and money for their service...[or] they're finding a social need within society and filling it. And that's what's driving the business."
Big companies are listening.
Large corporations are also jumping on board because of the proven impact that changing a company culture has on the bottom line and their employees. While it's one thing to say you want to work somewhere because you get paid money, and you, much like Frito Pendejo in Idiocracy, like money. It's another to say that you care about the company's mission--loyalty isn't built upon the bricks of simple cash.
One study I found showed that if employees felt they are working towards a good cause, it increased their productivity by up to 30%. Another study showed that volunteering made employees more satisfied and productive.
Chipotle is an example of a large company that has explored the benefits of letting its employees volunteer, enhancing their brand reputation at the same time. Corporate social responsibility has become needlessly buzzy, but it does mean something when executed properly. Realized Worth, a company that "engages corporations in corporate citizenship," came up with one of the few useful pamphlets in corporate history to educate employees on why they should care and how to take part in said responsibility. It works, in my mind, as it actually has statistics and information about the positive effects of the corporate social responsibility programs that the company offers. While it's obviously promotional for Chipotle in the sense of creating a "goodliness" internally, there are many people that want to help but really have no idea how to, even in a small way.
Another company I found in the space was Bright Funds. When they partner with a company, they create an internal workplace giving program. The business then has the ability to choose to support charities its own employees care about, boosting morale and helping bring more funds to non-profits. The company can even choose to match each employee's contribution, doubling those dollar amounts. While this is commonplace with many companies, including a former employer of mine, Bright Funds has streamlined introducing it to companies that might have no idea how.
CEO Ty Walrod worked previously with an organization that worked to repeal the "Don't Ask, Don't Tell" policy in the military. When he saw how technology could unite people to make a difference in the world, he decided to find a way to use it to improve the world of charitable giving, which, as I noted, has never been that easy to integrate before this point. Every little bit helps.
The purpose-driven advantage
Kalfayan and Walrod, among others, have found that having this purpose-driven mentality early gives startups a distinct advantage. As organizations grow, they tend to lose sight of their initial purpose. Furthermore, some companies may not have a grandiose view of the way in which they can change the world but still want to make it better, thus the term "purpose" can mean a lot of things which aren't strictly about being a superhero. Both believe that when an organization reaches a certain size (in the 10,000 to 20,000 range), that leaders that focus on sheer profit and growth over inspiration and purpose don't do as well.
"We've seen a huge shift in companies," said Walrod. "Especially where companies choose to match their employees' charitable gifts, because it gets the company aligned behind what the employee cares about."
It's a muddy term, but purpose-based business can be done in many ways. Change.org is has a dual purpose of creating wealth for the economy and improving social good for the world through simple petitions. Even huge social networks like Facebook and Twitter (and many others such has Reddit or Instagram) have demonstrated their ongoing potential to do tremendous social good, such as Zuckerberg and his wife regularly making large charitable donations. In the end, a company can only invest so much money in an employee's loyalty before they have to start thinking about what inspires them.