Profit with a purpose
Profit is not a dirty word.
After many years of working exclusively with nonprofits, we were sensitive to how we would be perceived when we decided to take on clients from the private sector. How could a company named Idealist Consulting work with for-profit companies? Back then, the implication was that a nonprofit’s goal is to increase social impact, whereas the private sector's goal is only to increase wealth. But how could a business named Idealist Consulting not work with the private sector? Our idealism runs deep: our goal is to change the world, not just a sector.
These days, most people realize that socially responsible businesses are also capable of doing good and that nonprofit status can be more tax code than social mission. The old-fashioned double standard that pits nonprofits against the private sector is rooted in our interpretation of profit. By reconsidering how we think about profit, we can understand how the private sector has the same potential for positive impact as nonprofits.
What is profit?
Simply put, profit is financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something.
By this definition, successful nonprofits do, in fact, turn a profit. The difference is that they often need to spend that profit before the year’s end. On the other hand, the private sector can spend their profits as they wish. Financial gain is not the issue, but it does matter how the money is spent. Profit and purpose don’t have to be mutually exclusive! In fact, if done correctly, the more profit you earn, the more purposeful your impact you can make. Nonprofits don’t have the market cornered on goodwill, and the sooner we recognize the potential of the private sector to effect meaningful social change, the sooner we can address major societal ills.
Do more good
The Google slogan of “Don’t be evil” (changed to ‘Do the right thing,’ by parent company Alphabet in 2015) actually reaffirms the weak accountability of the private sector. If doing no evil is where the bar is set, the private sector is likely not going to be doing a whole lot of good. While I’m not advocating for rules to dictate how individuals or companies should spend their financial gain, I do believe that if you benefit from a community, you, in turn, have a responsibility to contribute to that community. Many companies pay lip service to this sentiment, but then why doesn’t every business contribute?
There are three reasons why:
- They don’t think it’s advantageous. (Which is wrong)
- We haven't held them accountable. (Which is changing)
- We haven’t made it easy. (Which is true)
Make it easy
The third point is the true crux of the issue. Imagine for a moment that every purchase you made was making social impact through product, equity, or time. When you spend money with Idealist Consulting, that’s exactly what happens.
All of our private sector customers contribute to a shared social impact through our Pay it Forward Program. They are automatically enrolled in the program, which blends the altruism of a nonprofit with the efficiency of a business. They are qualified to gift labor to nonprofits, receive a positive promotion, and build relationships across the nonprofit/private sector divide. This is called integrated philanthropy and the outcome is a better world for all. Had Idealist Consulting decided to focus exclusively on nonprofit clients, this program and its positive impact would never have taken off or served so many.
“Idealist Consulting is establishing themselves as a progressive leader through the Pay It Forward program. Everyone’s talking these days about corporate responsibility – Idealist Consulting is giving us a direct way to actually do it!”
--Michael Leland of Mortgage Trust
We’re all in this together
When I founded Idealist Consulting, I recognized that if we’re going to truly make a difference, we had to drop the old stereotypes of business (for ourselves and for the companies we work with). The nonprofit community simply can’t do it alone. Businesses can and should use their influence to serve the greater good as well; we all have to work together to change the world. It’s time to do more good.
It takes a while to figure out how to create sustainable systems for your company or nonprofit that enables you to give back in meaningful ways. To learn more about our journey, and the path I took to start Idealist Consulting, check out the post below.
