The Case for Businesses with a Social Purpose

As recently as 10 years ago, the consensus among entrepreneurs was generating profits and acting with a social purpose were mutually exclusive. Most argued (and many still do) a business’ function is to maximize revenues, minimize costs and optimize shareholder value. Generating positive social and ecological outcomes, on the other hand, is the domain of charities, non-profits and non-government organizations.

However, that point of view is shifting rapidly as a growing number of professionals recognize many of the costs incurred by for-profit organizations have the potential to benefit their community. In fact, a business owner’s social impact can be enormous; and so, too, can the potential benefits to their bottom line.

Today, there are countless examples of socially-driven brands who are not only surviving, but genuinely thriving while benefitting their employees, stakeholders and the public. That said, you’ll want to be weary of a one-size-fits-all approach. With numerous ways for your business to make an impact, it’s important to choose opportunities which align financially, culturally and practically with your goals.

Corporate Tax

Paying taxes is unappealing. But it is also a necessary part of doing business. Ideally, your corporate tax dollars will enable the government to deliver a well-educated workforce, build and maintain public infrastructure, provide services to ensure public welfare and wellbeing and ensure economic stability.

This is not to say you need pay more than your fair share of taxes. However, adhering to this social contract between yourself and the government sets the stage for you, fellow businesses and the community to thrive.

Employee Profit Share

Sharing business profits with employees is an effective way to incentivize your workforce, improve your bottom line and increase the value of your business. Moreover, with greater economic outcomes for individuals and families, profit sharing plans typically correlate to greater employee wellbeing and job satisfaction.

Corporate Social Responsibility

Charitable giving has numerous potential benefits for both your business and the recipient organization – especially when the cause connects closely to your business’ corporate mission and values. Most obviously, these donations (of time, money or both) immediately benefit people in need. But they can also increase your brand’s profile in the community while increasing employee morale by allowing them to take and active role participating in worthwhile initiatives.

Values-Aligned Suppliers

Your organization has plenty of opportunities to magnify its impact by carefully selecting the vendors and suppliers you choose to work with – especially as more businesses seek to create social value. The first thing to consider is whether your partners’ values align with your own. Next, whether they also give back to the community. That way the money you’d spend regardless will systematically filter down to other impactful initiatives at no additional cost to you.

Supporting Your Family

As the saying goes, “charity begins at home.” Owning a successful business offers numerous economic benefits which allow you to support the people most near and dear to your heart – your family. You can invest in your children’s education. You can teach them about the principles of entrepreneurship, such as hard work, commitment and financial management. You can also involve them in your organization’s corporate giving programs to provide hands-on exposure to how businesses can create social impact.

Darrell Wiens, CPA, CA, is a Partner with MNP. To learn more about how you can improve your business’ social responsibility – and how MNP can help – contact Darrell at 780.969.1414 or [email protected]​​​.

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