As originally posted on Forbes.com
In decades past, business leaders had to focus on two things: product and profit. In modern times, they must add social impact to the list. If leaders want to win the war for talent and customers, they must abandon the traditionally siloed approach to social impact and instead integrate social consciousness into every seam of their business.
The data speaks for itself. More than two-thirds (67%) of millennials would not work for a company that does not have strong social responsibility commitments, and alternatively, 87% of consumers would purchase a product simply because the company “advocated for an issue they cared about.” It is understandable why a study from the Harvard Business Review and EY found that businesses with a clearly established purpose perform better than those without one.
One company with a comprehensive social impact strategy is Google and its philanthropic arm Google.org. “[O]ur goal is to identify how we can bring the best of who we are as a technology company to help address complex challenges,” said Jacquelline Fuller, president of Google.org, via email. “Everyone benefits from a more equitable world.” Although most companies cannot operate at the level of Google.org, which awards $200 million in grants each year, companies of all sizes can be inspired to implement social impact into their overarching strategies.
As a member of the board of Tides, a globally-known philanthropic partner and nonprofit accelerator, I have witnessed these changes in action. It can be difficult for leaders to know where to begin, so here I highlight three companies who have been successful in their efforts. All of them have worked with Tides, and all of them are achieving their social responsibility objectives in the central impact areas of employees, supply chains, and customers.
Pledge 1%
Pledge 1% is a unique organization that encourages companies at all stages, from founding to post IPO, to pledge at least 1% of their equity, profit, product, or employee workday time to their communities. Spearheaded initially by the founders of tech companies Salesforce, Atlassian, Rally, and now a special initiative of Tides, Pledge 1% provides an outstanding example of the social impact movement at scale.
Since its launch in 2014, it has grown 150% each year and has amassed pledges from more than 8,500 companies across 100 countries. “Imagine a world where giving back is baked into the DNA of every single business. At Pledge 1%, that’s our goal,” said Scott Farquhar, board member and co-founder and CEO of Atlassian.
Pledge 1% understands the importance of involving employees in social impact initiatives, encouraging its member businesses to commit 1% of staff time to volunteering. At Salesforce, the company that pioneered the concept, team members have volunteered more than 1 million hours since 1999, undoubtedly having a measurable impact on their communities — and on the employees themselves.
Kate Spade New York
When seeking an arena in which to create social impact, companies can also tackle their supply chains. While there are myriad examples of companies lambasted for unsustainable practices, such as Nike and Apple, there are few examples of companies who have gotten it right. Kate Spade New York is one notable exception.
“[W]e encourage all women to be the heroines of their own stories,” CEO Anna Bakst said in an email. “Our brand promise carries over to the way we think about social impact and responsibility.” In terms of supply chain, the company has progressed beyond a basic negative screen — ensuring no child labor is involved, for example — to a positive screen that supports small producers through its On Purpose initiative.
As Bakst explained, the company is “empowering women by intentionally bringing our supply chain to marginalized communities.” For its first project, it focused on a community in Masoro, Rwanda, where it built and financed an independent, employee-owned business staffed by local women. (Tides supports this work through grantmaking in the community.) Last year the new company, Abahizi Rwanda, produced 32,000 handbags for KSNY.
“We know that our customer connects with On Purpose and the stories of the women who make this product,” said Bakst. “By going direct to the supplier, we found that we could scale our business along with creating greater social impact.”
Twilio
As Bakst suggested, companies should also consider their customer base when evaluating social impact initiatives — how can they help more people, while also reaching new markets? Cloud communications platform Twilio is one company that found great success in using its expertise to expand both reach and impact.
In 2017, it launched an impact fund, funded by its 1% pledge and managed by Tides in the form of a corporate Donor Advised Fund, which “supports nonprofits and social enterprises” that are utilizing “innovative communications technologies.” The fund provides both grants to nonprofit organizations and equity and loan investments to for-profit social ventures whose missions align with Twilio and Tides, such as Hack the Hood and Edovo.
From 2017 to 2018, Twilio’s revenue increased by 63%. Erin Reilly, executive director of Twilio.org, believes the success of the “for-profit” and “for-good” arms of the company are intertwined. “[W]hen our social impact program grows, so too does our business,” she wrote. “Creating a virtuous cycle between the two and actively making them inextricably tied is important for the sustainability of both efforts.”
As these examples have shown, social responsibility can spur corporate success . To many emerging leaders, in fact, generating social impact is more than a catalyst; it is an essential component of running a business in the modern world. “At the end of the day, social impact will not be successful if it’s a ‘nice to have,’” explained Reilly. “Put the full weight of the company behind your program, and you will be amazed by the impact it has on the strength of your business, your customer’s trust in you as a company, and your employee culture.”
