Doing Good With (Through) Business Outline

Doing Good with Business My Story…

My legal career started off in-house within Fortune 500 companies, while in my “spare time” I worked with nonprofits. What was most fascinating was the number of small businesses that would approach me with ideas similar, if not identical to the ones of my nonprofit clients. Amazing ways to mix business with impact, that they’d cast off under the doomed “project” status; believing it was impossible to do something good and make substantial money at the same time. As if impact would somehow serve as a distraction.

Or worst, they’d abandon the idea all together under the auspices that “good” would be better handled by a nonprofit organization.

The Goal…

The goal here is simple. Walk out exorcised of any beliefs that good is solely for the hands of charities. If you dream of making a positive impact

whilst making beaucoup money, then do it! Using the different avenues I present as a springboard for brainstorming ways to integrate good in a way that is authentic to, and resonates with, you.

Why Does This Matter?

So why does any of this matter? Good question. Let’s start with the most apparent fact; because people are starting to expect this from you.

Research shows over 50% look for some sort of social responsibility or impact mission when choosing a product or service. Not only that, but they are willing to pay more for a product or service to support it.

Millennials not your market?

Remember, they do get older. So if they aren’t now, they will be. But other reasons why this matters? Two words; competitive edge. By integrating good you’re given a great way to differentiate from others. Not only that, but depending on how you play it, you have a marketing angle (think TOMS) or a way of building brand loyalty.

Need more reasons? The law may be a good one. The reality is, states are starting to make humanitarian rights, environmental conservation and sustainability in the supply chain legal requirements of operating. Just look at what California is doing with its mineral laws. And what the SEC requires in your yearly disclosures on the same. Or even look at the tough labor/slavery laws being put into place.

But there’s one last, and the most important, reason; it just feels so stinkin’ good. Doing good feels good.

And when something you pour your heart and finances into is also able to leave a positive lasting impact on someone else; how much better can it get?

Ways to Do Good

Structure (Entity Structure That Is) A sorta easy (but sorta hard) way to do good with business is by building social impact into the business ground up.

I go into this in my Startup Grind article that’s attached here. Essentially, a great 1

way to cement good into the business is by choosing an entity structure that mandates it, like a benefit corporation or L3C. Both of which ensure a business carries out social impact, while making it attractive for social impact investors and Mission Related Investments (MRI’s) from foundations.

In Texas, neither of these entities are available (yet), but you can write up your formation documents in such a way that they mimic the requirements of these other entities. For example, requiring the business to run in a way that is sustainable, and keeps a list of stakeholders in mind when making decisions.

Another way to embed good is by building impact into the business model. There are really three different ways to do this, one being impact as something that happens incidentally, one where impact happens alongside the business and the last where impact is the business.

And if neither of these fit, careful recruitment (working with staff all the way up to a board and investors who

hold impact as high a priority as you do) is another option.

Hybrid Structure This might fall into the “structure” camp, but warrants its own mention. If the way a business plans to do good is financially unsustainable (for example, giving away software or training a very specific group for little to no cost) then there is nothing wrong with creating a nonprofit subsidiary under the forprofit organization. That way, the business can continue doing it what it does and be closely tied to this other organization with a charitable/social mission.

Create Partnerships Another way to do good is by partnering up.

Ways I’ve seen partnerships manifest is where the community, businesses, school, and charity leaders come together to tackle a problem, for example food desserts. A business leader in the community might offer up space or expertise, a school might agree to house programs with its students, or

supply student worker and a charity might agree to develop programming.

Partnerships can be buttoned up in any number of ways; you could create a public private partnership reduced down to a contract. Or even create an entirely new entity. For example, an LLC where financing or capitalization is involved. Back to the example of the food desert, you see this often where grocery stores, suppliers, finance institutions or charities come together.

A new entity can also be important where its sustainability will come down to ownership by each of the partners.

Regardless of how it’s put together, the key will be finding a way to keep everyone engaged and getting it all down in writing.

Networks and Consortiums Networks embrace the birds of a feather mentality, by creating a physical (or virtual space) for like minded entities to work together. This could look like monthly meetings around a project or issue, a list-serv, annual community project, or any number of things. Basically a group of people or

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entities that are like minded and come together to address [fill in blank here].

If you’re really serious about this whole networking thing (in other words, ready to change that “It’s Complicated” status to an “In a relationship”) you might consider creating a cooperative. Which allows you to leverage the number of participants into buying power. But ultimately, the goal is leveraging the resources.

Cause Marketing Let’s say you want to be social impact “lite.” In other words, do something that doesn’t require too much time or resources but still allows you to do some good. Nothing wrong with that.

In this case, the short and light nature of cause marketing may be a good one.

This is what you see when Yoplait says it’ll donate x amount of money from each cup to Susan G. Komen.

Admittedly a quick(er) and easier way to give back, know that this avenue has caught the radar of consumer organizations. Because businesses were claiming to give more than they

actually did, didn’t’ give much, or even worse, didn’t give at all. So some states monitor this pretty heavily.

At the very least, write up a contract outlining a specific amount or formula for each donation, the donation cap if any, payment timelines, and marketing obligations (keeping in mind tax restrictions on the charity). This should all be clear in the marketing materials too. And you’ll want to double check the states you’re marketing in to see if they require a contract to be filed or bond posted.

Programs (Donations if you have to) And last, but of course not least, there are the good ol’ service programs. This is the volunteer day at the food shelter, or employee giving programs you typically think about. Though less engaged, these are still great ways to instill a philanthropic culture into the business and get everyone (employees and vendors) thinking about the bigger picture.

As an aside, and this is my own personal thing, I always advise businesses to do something more than coat drives and

monetary donations. Not that either is bad, and they’re both in need, but it’s important “good” be engaging, not top down. Which requires more than just money or things, it requires empathy and investment. So however you cultivate these programs, do so with the community’s true needs in mind.

Other Ways to Do Good…

I’ve covered a few ways to do good with business that are (for the most part) pretty peripheral. But there are also a few operational ways to do good, like: • Being intentional with your supply chain, working with suppliers in a way that supports fair trade, conservation, upward mobility and sustainability. For example, where coffee is harvested in a way that’s good for the earth and the people who work that land. Or using a service provider that hires those who are down on their luck.

• Going for certifications, and operating your own business in a way that focuses on diversity, upward mobility and sustainability. There’s no lack of bodies that do this. With focus

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• •

on supply chain, facility management, employee management and even day to day operations.

Hiring Education

The End

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