How We Prioritize Impact Matters

Today, there seems to be an ever-increasing number of social enterprises in operation. Despite the criticisms the movement may face in regards to some groups merely using causes as a marketing strategy instead of an authentic social mission (also known as “cause-washing”), it’s become clear that the overall awareness and interest in social enterprise has grown tremendously. In my view, we have moved beyond the notion that social good in business is a fad, and it’s solidified its presence in our markets and daily lives.

Some social enterprise leaders and practitioners may call this an oversimplification, but I’d like to suggest that there are really only two types of core models for social enterprise. This is one of the distinctions I like to look at when establishing the motives behind social good businesses. It doesn’t offer a complete picture, but I’ve found it to be telling nonetheless.

1) The Cause and Effect Model

Within this model, organizations and businesses seek to take a social impact action once a purchase — or some other exchange — is made. Often times this comes in the form of a “percentage of sale” charitable donation or the donation of a physical product. Most often people will think of TOMS shoes and their ‘buy one, give one’ approach to the shoes they sell, but there are hundreds (if not thousands) of companies who employ a similar strategy. This model could also be summarized as “Post Purchase Impact”.

2) The Impact Integrated Model

This model is identified by its inclusion of impact efforts within the core business activities or its supply chain. These organizations are integrating social impact into their work prior to the sale of their product or service. I like to say these groups are “leading with impact” then inviting customers to take part. Examples of this type of model are the Goodwill thrift stores or The Giving Keys, as a more modern example. Contrarily, this model could be summarized as “Pre Purchase Impact”.

I believe there is a place for both impact models and that both are needed to be implemented in order to aid in the wide range of social, environmental and cultural ills our world faces. Additionally, these models are not mutually exclusive. They can happen in tandem.

However, I would advocate for everyone to consider ways to implement the Impact Integrated Model and what we as shoppers should be rewarding. An integrated, or pre-purchase impact, approach shows a commitment to a clear mission prior to the final step of making a sale.

I must mention, that I do not have an unbiased view on this, as this has been the approach of my work in establishing Krochet Kids intl. and KNOWN SUPPLY — apparel and accessories brands focused on employing vulnerable women to produce all of our goods. That being said, I can share from my experience and mention these closing thoughts on models for social enterprise:

• The work is never done. The social issues we are facing and the demands of growing a profitable business create an extremely complex combination of factors. Look for groups who are committed to improving more than those who say they have it all figured out.
• Authenticity is key. Get to know the backstory of the brand and understand not only what motivated them to begin addressing a specific social issue, but understand how they keep their aim for impact front and center.