4 Ways To Add Purpose And Giving Into Your Business Mission
I hope you have a big cup of coffee in hand because today we are going to dive into the idea of incorporating charity and giving directly into your business model.
If you’re a follower of my blog, then you probably already know that I love talking about business. I derive a lot of joy from seeing other entrepreneurs get started in the business world. But there is something bigger than that that drives me to continue putting in the time on this blog (which is a full time job in and of itself), and that is the idea of spreading social entrepreneurship.
As I introduced to you in Social Entrepreneurship: How to Save the World and Make the Big Bucks, social entrepreneurs are those who set out to leverage their businesses in order to help a cause or fix a social problem. Some of them are non-profits, and some aren’t.
I believe that social entrepreneurship is the future of business. In today's world we are seeing more and more companies use social and environmental awareness to market their businesses, and for good reason. Compared to other generations, the millennial generation is more concerned with the sustainability and ethics followed by the companies they purchase from. On top of that, millennials as a whole give more of their personal income to charity than previous generations, even outside of a business.
I believe that in the coming years we will see a surge in social businesses that aim to contribute to the greater good. And in fact, that wave has already started.
When it comes down to it, creating sustainable businesses that take on a single or multiple causes is one of the most important things we can do as entrepreneurs. We have the opportunity to make changes to the world more quickly and efficiently than any other sector, all the while earning a living doing it.
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It is an immense power to be able to influence others. For better or for worse, it seems that cash is the most effective way to shape the world the way we want. If you've ever wanted to use your business to push for the greater good or tackle a social issue that is important to you, now is the time to get started. With all of the technology available to us now, it has never been easier for the individual to change the world.
So let’s talk about a few of the ways you can easily work your purpose-driven business.
4 Ways To Power A Charity Or Cause With Your Business
#1. Donate A Percentage Of Total Revenue
If you’re just starting out and have no idea how to begin with the “social” part of your social business, donating a percentage of your total revenue is a super simple way to get started. It also seems to be best for companies that have higher profit margins per unit sold. Why, you ask?
Let’s say you decide to donate 10% of your total revenue. If your gross revenue one month is $10,000, then you would be set to donate $1,000 of that money to your charity of choice. That’s all well and good, unless you have low profit margins.
In this example, low profit margins might mean that you bring in $10,000 in sales, but it cost you $9,000 in expenses to do so. If that is the case, donating a percentage of total revenue will work against you. In this case, it may be best to donate a percentage of your total profits.
Of course, Profit = Income - Expenses.
So in this scenario, your profit is actually $1,000 ($10k income minus 9k expenses). And thus, you would decide to donate $100 that month (10% of $1,000).
#2. Start Your Business As A Non Profit
When people think of charitable businesses, non profits are one of the first things that come to mind. Non profits do have some benefits, including tax exemptions and government grants that can help float your business easier than a traditional profit driven business.
Non profits also have the benefit of various connections that aren’t available to profit based businesses and can help them expand quickly.
That being said, there are some downsides as well. First, the paperwork. Oh, the paperwork! In exchange for all of these goodies granted to you by the government, as the CEO of a nonprofit it will be your responsibility to provide detailed records of your business (at least until you can hire someone else to prepare them).
Another downside I see is that non-profits aren’t the best option for people who are trying to become financially independent.
While you could theoretically pay yourself a high starting salary that is written off as an expense on the books, this is one of the main complaints of anyone who looks into donating to a non profit organization. High administrative costs and thus lowered giving makes the organization look greedy and indulgent.
My advice? If you haven’t yet reached FI, start with a for-profit business structure. There are plenty of ways to give to a cause and build up your nest egg simultaneously. And, you always have the option of starting a non-profit down the road once you’ve become financially independent.
#3. Give Your Products Or Services
Giving money is usually the first thing that we think about when we consider making donations. However, depending on what your industry your business is in, giving of your products or services can also make a big difference.
If you’re in the early days of your business with more time than money, or you simply don’t want to deal with doing the research needed to give your dollars responsibly, this can be a great option. Let’s look at a few scenarios.
Let’s say you run a housekeeping service and want to do more to improve the lives of others. Maybe you could offer 1-2 free cleans per month to a disadvantaged family or elderly couple who have trouble doing the cleaning themselves at that stage in their life.
Perhaps your current clients could nominate someone they feel is deserving. You could also contact local home care nurses to scout out people they know who could use your services.
Or maybe you run a clothing shop somewhere in town. Could you help outfit homeless folks who are trying to interview for a new job? Or are there some local families whose kids could really use a couple of awesome outfits to make them feel great at school?
At the end of the day, giving comes down to two major things: creativity, and resourcefulness. What help can you offer to the world?
Remember, the type of help you give doesn’t have to be related to what your business does. You could run a coffee shop but decide to clean up local parks or provide support to veterans in your free time.
Get creative, be resourceful, and you’ll find that there are a thousand ways you can make a difference with your business.
#4. Give Your Knowledge Instead Of Money
One of the most important assets in today’s economy is knowledge. It’s no wonder the information industry is booming- people need knowledge and skills almost more than anything else to compete in our job market.
This makes teaching an excellent way to give back to others, and it only costs you some of your time. There are a ton of ways to teach, and you certainly don’t need to have a degree in education to get started. Here are a few ideas:
- Offer free classes at your local community center on a topic you know well
- Create free Youtube videos that can help others worldwide
- Offer to teach an afterschool class at the local grade school
- Give free tutoring sessions to students who need them
- Help foreign students learn your language by chatting with them through language learning sites like Italki.
Three Tips For Social Entrepreneurs
#1. Don't Wait To Get Started
So many people seem to think that they need to be making a ton of money in their business before they can start giving money, and that’s just not the case. In fact, I highly recommend you start donating from the very beginning.
Giving is both a habit and a mindset. You are much more likely to give when you are well off, if you started when you weren’t. So don’t make the mistake of waiting to gain a certain amount of money or status. Just start now- you won’t regret it.
#2. Your Customers Will Be Delighted
Remember that 73% of millennials who would prefer to spend their money on socially conscious, sustainable businesses? That business must be you! In an era where self serving businesses are being phased out and socially positive ones are supported, it will only benefit you to make a commitment to your cause and stick with it.
Your customers will love you for it, and you will find deeper meaning in your work that pushes you to reach for bigger and better goals.
#3. There Are Tax Write Offs For Charitable Giving
Did you know that you can write off the amounts you give each year when you file your business taxes? As tax season rolls around each year, I like to look at it this way- I can either give this money to a cause I support, or I can give it to the government. I hedge my bets on the charity!
I want to leave you with one of my favorite quotes from Margaret Weis that keeps me inspired to be a social entrepreneur and promote social entrepreneurship to others. The world is a big place with many problems, but it is also full of people who want to help and who care about the issues they and others face.
It really is up to us to make the changes we want to see and to lead the pack towards a brighter future. We simply cannot wait for anyone else to do that for us.
“Like a drop in the vast ocean, each of us causes ripples as we move through our lives. The effects of whatever we do - insignificant as it may seem - spread out beyond us.
We may never know what far-reaching impact even the simplest action might have on our fellow mortals. Thus we need to be conscious, all of the time, of our place in the ocean, of our place in the world, of our place among our fellow creatures.
For if enough of us join forces, we can swell the tide of events - for good or for evil.”
Question: How do you plan to use your business for the greater good? What causes mean the most to you, and how will they influence your mission? Let me know in the comments below.