
Purpose Capital: How Far Can We Go?
By Alison Leontaridis
There is a seismic shift happening in the business world, a move to connect our Capital to Cause. Increasingly we look for ways to align our business ventures with charitable acts and we see unique and strategic alignments evolving between culture leaders, corporations and causes.
Some of this comes from our increasing exposure to the ever-prevalent needs we see around us. We are more aware than ever that almost 800 million people don’t have access to safe drinking water, that every 30 seconds a child is trafficked, and the rainforest is disappearing at a rate of 78 million acres/year.[1] We know the need is great. And we know, even if we can’t always pinpoint how, that possibly, hopefully, we could do something to help.
Some of our connecting capital to cause is for less altruistic reasons. There is smart business sense to decisions we make to evolve how we do business or face disdain from the Millennials and Gen Z’s who have made a clear stance towards tying their substantial purchasing power to companies connecting their products and services to Cause.
In their groundbreaking book, (which I cannot recommend more enthusiastically) Good is the New Cool, Afdhel Aziz and Bobby Jones give one powerful illustration of the size of the opportunity that awaits brands: the annual global spending power of Millennials is $2.5 trillion and 95% of them say they would switch brands to one that supported a good cause. This alone is changing the shape of how business must be conducted.
Regardless of the motivation behind it, we can no longer ignore the fact that we need to look for ways our businesses can align with humanitarian, environmental or social causes. There are an infinite variety of business models for how to do this, but generally they fall into the categories below:
1. One For One — This is a popular model for new product-based companies who donate something for every product sold. Sackcloth & Ashes for example, gives a blanket to a homeless shelter in the region of each purchaser of their luxury blankets. Toms donates a pair of shoes for every pair purchased. Warby Parker donates a pair of glasses for every pair purchased and 10 Trees plants trees for every product purchased. They have planted over 14 million trees through this model.
2. Percentage Based Donations — Companies using a percentage based model align with a cause and make donations to this cause based on a percentage of sales. An example of this is Lady Gaga’s recent “Born This Way” campaign with Starbucks where 25 cents from every specified drink sold went to her charity dedicated to teen empowerment.
3. Non-Profit Within a For-Profit — Many larger corporations have developed their own foundation or non-profit within the larger business structure of their company. This model is ideal for organizations with a clear alignment with a cause. The work of the corporation funds the work of the non-profit. Strong community development examples include the Tim Hortons Foundation funding sports programs for kids and the Orange Door Project, a foundation developed by Home Depot to eliminate youth homelessness.
4. Brand Alignment — These companies are not necessarily claiming a specific amount of money from all sales goes toward a cause, but are providing donations to a specific cause or charity and championing this cause through their public relations and marketing efforts.
5. Volunteerism — The value of social capital is seen so clearly in models where employees are encouraged to volunteer. Whether it’s running a United Way campaign or volunteering for Habitat for Humanity, this is a model where there is not a direct financial tie to a cause or charity but clear support through other means, namely, time and human capital.
Clearly some of these models are easiest when developed from inception. However there are many ways to evolve an existing business structure to include cause alignment. It is essential that we respond to the ever-growing client demand for social and environmental good to come out of their consumer choices. Structural business changes aside, we do this by engaging one of our most valuable assets: Social Capital.
Social Capital is the human element of the world we live in. It is the constructs and networks we develop that make it possible for there to be capital exchange. In business specifically, Social Capital is the collection of skill sets, contacts, hours of time and communication capacity that exists between employees, peers, prospects and competitors. It is everything a machine cannot do for us: introductions to a potential employer, brainstorming innovation, camaraderie and friendship in the workplace, communicating a vision. Social Capital is a powerful and immense resource in business that receives very little attention, strategy or financial support.
But, Social Capital is really just the beginning. Even deeper than engaging our employees in our business-to-cause dynamic, we need to tap into the Purpose Capital, or the driver behind the Social Capital.
If Social Capital is the network, time and human resources in our companies, Purpose Capital is the accumulated power of motivations, passions and the “why” each individual brings to the group. Purpose Capital is the essence of Revolution, the belief that it’s not enough to just bring people into the same room, but to bring people together with a unified goal or pull toward the same preferred future.
I recall leading a workshop to help a team of employees engage in some socially conscious team building activities. Through exploring what motivates these individuals personally and what they were uniquely passionate about, we discovered that more than half the team had been significantly impacted by cancer. Some were already engaged in fundraising for cancer related causes, running races or volunteering to canvas, and others wanted to get involved. Two team members were cancer survivors themselves and their team members hadn’t even know. They aligned their Purpose Capital towards a cancer prevention fundraiser and experienced unbelievable growth in their team dynamic, which was the original goal of the activity, as well as raised a significant amount of money for their cause.
If we don’t tap into the invaluable resource of Purpose Capital, we are using a limited and non-renewable resource in Social Capital that will eventually deplete itself. There are only so many hours we can volunteer. There are only so many contacts we can share. These resources become increasingly effective when we connect to the deeper “why” and engage our employees at their deeper level of Purpose.
How do we tap into Purpose Capital? Here are some questions to ask yourself to get the process started:
Does your company have a clear Mission, Vision and Value statement?
How clear are your employees on what that statement is?
When you hire employees are you looking solely at skill sets and qualifications (Social Capital) or are you driving deeper for value alignment (Purpose Capital)?
Where could your organization align with a social, humanitarian or environmental cause?
Purpose Capital aligns the individual and shared deepest drivers of a team and facilitates exponential growth in our Social Capital to allow us to do something really truly wonderful together for our business success and human success. Purpose Capital is the key to unlocking the box of Social Capital.
For those of us employers or leaders who want our work to make a meaningful impact in the world and who want our work to be infused with deeper purpose than bringing home a paycheque or filling our 9–5 or trophies on our shelves, perhaps we can cling to the African Proverb that says:
If you want to go fast, go alone.
If you want to go far, go together
When we look at the world and the challenges we are faced with: poverty, deforestation, climate change, the lack of clean water, epidemics, human trafficking, discrimination, terrorism, I think it’s safe to say….Let’s go far.
[1]https://thewaterproject.org/water-scarcity/water_stats, http://www.tearfund.org, http://www.rain-tree.com
aleontaridis@rhapsodystrategies.com
