Tuesday, January 12, 2010

Will businesslike charities become charitable businesses? Part 2

A couple of days back, in Part 1 of this post, I discussed the trendy idea that businesses and charities are inevitably going to merge, and took the position about the nonprofit side of the equation that I simply don't see this happening for a variety of reasons.

But what about businesses: are they becoming more charitable? Will business force out nonprofits by taking over our turf?

Again, no.

There is no question that more and more businesses have figured out that having social outcomes do a variety of good for the community and for the business. They build morale among staff, help develop a corporate culture that attracts people who care and are motivated, and provide a competitive edge to attract customers who also care.

This trend is largely evident in smaller companies who are more flexible, and most evident in smaller companies led by younger owners and managers. New entrepreneurs often try to marry up their entrepreneurial skills with a social or community problem, and are not shy about saying that they need to make money in order to do good. Look at Tom's Shoes, one example that's on television a lot. Great organization, great idea. But if the for-profit side doesn't sell shoes, the charitable side can't donate them.

The thing to remember is that this trend, while incredibly laudable, is still a distinct minority among business. It gets lots of press since it's newsworthy (read: unusual/weird) but it is nowhere near mainstream yet. And, given the behavior of so many for-profits (see yesterday's post) in the recent past, I don't suspect the idea of always doing social good will become the norm in practice for a long, long time.

So, to summarize both posts, more nonprofits are becoming businesslike in their pursuit of mission--but nowhere near all. More businesses are pursuing social good in addition to profits, but nowhere near a majority.

Both of these are good things that we should encourage, not angst over.


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