So, you want to be an entrepreneur. You've got a great idea, and you're ready to take the leap. But there's one more question to answer: Should you add a social mission to your plan?
Social entrepreneurship, where for-profit companies have some component of charitable giving as part of their business model, is a growing trend among Gen Y entrepreneurs. One of the most well-known social ventures is TOMS, founded by Blake Mycoskie in 2006. Since inception, the company has donated more than 1 million pairs of shoes to children in need with its “buy one, give one” policy.
If you want to make a profit and make a difference in the world, read on to find the answers to some of the big questions about social entrepreneurship.
Should I launch my business first and add the social mission later?
Katina Mountanos and Liz Whitman, founders of New York City-based startup Manicube, caution that if you don't incorporate your social venture into your mission and value proposition from the beginning, you might run the risk of the social good becoming an afterthought.
A few other reasons to commit at the beginning:
- A social mission will set you apart from your competitors. And as a new business, standing out from your customers' other options will be key to your success.
- Your customers will get a sweet deal. Not only will they enjoy your product or service; they'll also feel good about themselves because you've involved them in contributing to a worthy cause. There's a good chance they'll share this with their friends, which is great for your word of mouth.
- You'll attract great talent. Mountanos and Whitman discovered that their employees find the social component of the business as inspiring and compelling as their customers do.
- This unique aspect of your business enhances your brand story and makes you more attractive to journalists. Pitch your vision well, and you'll likely see some press coverage.
How do I choose a beneficiary for my social mission?
When forming a social venture, you have two primary audiences: the traditional customer who buys your product or service and the beneficiary of your social mission. To make the largest impact, make sure these audiences have something in common.
Here's an example:
The Honest Company is a subscription-based online retailer that delivers natural, toxin-free baby products to their customers every week. Their chosen beneficiary is Baby2Baby, a Los Angeles-based nonprofit that provides assistance to families in need. The Honest Company has strategically chosen a partner that will benefit from the very thing they already do well, which is to create safe, eco-friendly products. They've aligned their two audiences in a way that allows the company to fulfill their overall mission: to give each child a chance at a healthy beginning.
If your new venture is a service provider, consider contributing a portion of your revenue to your choice of charity. Manicube gives Manhattan women the option to get manicures in their offices (a great time-saver). For each manicure service they sell, the company donates $1 to a female entrepreneur in the developing world.
Another thing to keep in mind when choosing a benefactor is to make sure the organization is credible and has a reputation to deliver what they promise. Mountanos and Whitman vetted their partner,Kiva, using Charity Navigator.
Is it worth it?
As a new business owner, you will have a zillion things to worry about. Adding a new aspect to the business before getting it off the ground may seem daunting and not worth the extra trouble or reduction in profit.
While managing a social venture will come with certain tensions (Who do you help? What's the best way to help them?), it's important to keep in mind that you'll be making a difference in the world. Despite your initial hesitations and the resistance you may encounter from naysayers, once you experience how amazing it feels to make that first donation, you'll do whatever it takes to feel it again.
Designer Rachel Roy, well-known for her numerous charitable collaborations, recently tweeted another benefit of incorporating a social mission: inspiration. Roy, who believes Charity = Clarity, says that “through giving back, you gain clarity, peacefulness, happiness and balance in your own life.”
Can you think of a better state of mind to be in when building your business?