Organizations that serve a societal purpose are nothing new. Charities, which operate on donated funds, have been helping solve social problems for centuries. But a new type of organization is stepping up to the plate: the social entrepreneur.
Small businesses may be especially well positioned to incorporate social entrepreneurship into their missions. And doing so may help them appeal to increasingly affluent millennial customers, who want their purchases to benefit more than just themselves.
What makes a social entrepreneur?
In May 2013, Forbes detailed the explosion of social entrepreneurship, a phenomenon in which businesses combine conventional capitalist strategies with solving important problems of hunger, poverty and other global issues.
Examples of companies created by social entrepreneurs, offered by Business News Daily, include:
Do Good Buy Us, an online company selling products exclusively made by organizations that support social causes
Headbands of Hope, which sells headbands that are made in America and gives $1 from each sale to childhood cancer research
Accessibility Partners, which helps make information technology more available to those with disabilities
But social entrepreneurs don’t have to be focused on big, global problems. For example, Daniel Lubetzky, founder and CEO of the KIND snacks brand, considers social entrepreneurship the heart of his business. His belief is that entrepreneurship should work hand in hand with kindness and empathy.
Lubetzky's KIND Movement supports several specific charitable causes, but also focuses on spreading random acts of kindness. When Lubetzky sees a person doing something kind, he hands out #kindawesome cards that are redeemable for a free KIND bar. "You have a deeper purpose that drives you," Lubetzky told Entrepreneur. "You have to talk to yourself about what that purpose is."
Many corporate giants find ways to incorporate social entrepreneurship into their operations. For example, an IKEA business segment called the IKEA Foundation is solely devoted to helping children in poverty.
IKEA Foundation ventures change periodically. This year, a collaboration with social entrepreneurs in India has resulted in a limited-edition collection of pieces made by 600 Indian women from poor rural communities. The collection, available in Dublin starting in March, is called STADIGT.
How can a small business be a social entrepreneur?
With their deeper pockets and broader reach, large corporations may seem more viable sources of social entrepreneurship. But small businesses can play a part, too. In fact, because they are generally more closely held, more flexible and more nimble than super-sized corporations, small businesses may find it easier to follow their hearts.
Take the Entrepreneur “entreployee” winner for example: A Cup of Common Wealth. The mission of this Lexington, KY, coffee shop is threefold: “Embrace community. Serve others. Create culture.” The shop pursues this mission in diverse ways, from donating coffee to community events and empowering baristas to do what it takes to help a customer, to promoting a “pay-it-forward” wall on which people can purchase drinks for future customers. In these ways, this small company is attempting to make a big change in the lives of its customers, employees and community.
Good for the world, good for business
While most of the business owners who pursue a social mission do it out of genuine concern, there’s no denying it can also be good for the bottom line.
Millennials, the largest generation in American history, demonstrate higher loyalty to brands that have a social mission. As they enter adulthood, millennials are increasingly earning high incomes, so what they think and where they shop really matters. In fact, they currently dictate the majority of shopping and business trends. If you want to appeal to these influential, affluent customers, consider aligning your business with a cause millennials support.
It doesn't matter whether you run a nonprofit devoted to raising money for cancer research or sell personalized high-heeled shoes: Every company can find a way to do good.