On a bright Saturday morning in Boston, I decided to relax and take some time for myself instead of the usual grind. One of my favorite things to do on Saturday's is to read books that help me learn more about how I am running C&M Group, and Insightfully.
Today, I picked up a book about John D. Rockefeller's life. Regardless about how you feel about his politics, most can agree he was one of the most renowned businessmen, and built one of the biggest oil businesses in the world.
I have always been known to focus on giving back. In fact, with my first company, I wanted to donate a percentage of profits to a local charity that supported tennis, however, was immediately discouraged because it is hard enough to grow a startup, and giving away a percentage of profits early on was a "bad idea". In reality, business models are changing rapidly, and more than ever, more businesses are trying to do more good versus profit.
Here are four ways your full for-profit business can still do good, without deviating from your vision.
1. Corporate Social Responsibility
Large corporations such as General Electric, Coca-Cola, and other Fortune 500 corporations are realizing that they exist because their customers love their products and services.
Similarly, Fortune 500 companies can go extinct if they don't create an environment where they are creating an atmosphere for their businesses to co-exist with the communities they are apart of.
An example of corporate social responsibility would be a brand instituting a weekly community service requirement, and later, publishing those results in their annual report.
For example, Coca-Cola donates time and money to many organizations supporting water cleanliness and purification because of its incorporation with organizations such as Vitamin Water, and the need for greater oversight in regards to water cleanliness in developing nations.
2. Percentage of profits
The percentage of profits is one of the better ways to incorporate a do-good component to your business. One of the best ways to do this is to focus on what not-for-profit or organization your business cares the most about, and focus on helping them.
For most businesses, it is important to also be relevant to what the organization your business is supporting is in. For example, if you run a college mentorship program for individuals going to college, it wouldn't make strategic sense to donate a percentage of your profits to an organization that caters in helping pets in puppy mills, even though it may help tremendously.
The reason this is the case is because your donation will simply be a financial donation, not a strategic donation.
On the other hand, you could donate that profit to an organization that helps females get interested in STEM education, which would serve as a greater return on investment for the organization because they would be receiving strategic capital, as well as your business because you are supporting an organization that is relevant to your business.
Similarly, businesses like Sevenly have adopted this model to help local charities by donating $7 of every product purchased to the cause it weekly features. For example, this weeks purchase on Sevenly would help build a school for Dalit children in India and transform their lives. What an awesome way to benefit so many individuals. Not to mention, Sevenly, as of Janurary 2015, has raised more than $1,554,040 for different causes.
3. Buy one, donate one
The buy one, donate one business model is becoming a huge trend, especially in direct to consumer businesses, such as Warby Parker, an eye-glasses company with outlets across the US.
Warby Parker has raised 60 millions of dollars since its inception, and according to Neil Blumenthal, the buy one, donate one, business model was the foundation for the business, and many investors questioned its success.
A similar business that has achieved monumental success has been TOMS shoes.
Do you believe that customers buy these products because of their unique business model? I am a customer of both, and can say that Warby Parker as a business becomes more attractive because it is so focused on helping individuals without glasses see clearer. It improves the facade of the business, and makes me want to do business with a business doing good.
4. Setting out to do good from the start
How many entrepreneurs truly set out to do good in the world, while still making a significant profit? Entrepreneurs such as Peter Thiel, Max Levchin, and others from the Pay Pal Mafia talk about making meaning in the world.
One company that comes to mind is Ecoviate, a company building a community around consumer sustainability. They do this by building software applications geared to help individuals be more conscious about there environmental footprint, in exchange for rewards such as "30 days off a Rhapsody subscription".
Ecoviate is a prime example of people over profit, and hopes to help more individuals become eco friendly, while still making a healthy profit in the process.
Too many businesses are concerned with making money, and not about creating value. Moving into the new era of startups, we are discovering business models that are making not only a financial impact on our economies, but an environmental impact.
Communities and platforms that are geared for change can have an exponentially greater impact than simply building for an acquisition. These are scenarios where everyone wins.
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