Frequently Asked Questions
A Social Purpose Business is a company whose enduring reason for being is to create a better world. It is an engine for good, creating societal benefits by the very act of conducting business. Its growth is a positive force in society. As the company prospers, its stakeholders and the communities in which it operates prosper too.
The company’s social purpose goes beyond the company’s products or services, guides everything it does, and determines its strategy and culture. The company’s social purpose is placed at the core of its operations, central to the company’s brand proposition, as a focal point, guidepost, or “stake in the ground”, at the heart of what the company does, as an animating, motivating, raison d’etre. This purpose sets the company’s strategic vision and decision-making, determining the significant choices it makes. It helps the business decide what to start doing, what to stop doing, and what to do more of. The social purpose acts as a headlamp illuminating the company’s growth pathway.
In addition to the altruistic motivation and sense of responsibility to create more social good, there is a strong business case for having a social purpose.
Evidence is mounting that businesses that stand for solving societal challenges are performing well – in terms of market growth, meeting changing customer needs, and energizing their employees. The research on the social purpose business case shows there are six main business benefits for pursuing a social purpose business model.
Having an authentic social purpose builds customer commitment and creates a competitive advantage. Social Purpose Companies attract and retain customers and build customer brand advocacy. A Social Purpose Business increases employee engagement and is more able to recruit, retain, and motivate employees and build employee brand advocacy. Businesses that demonstrate social purpose enhance stakeholder relationships, thus enabling more and new collaborations on shared business and societal goals. Having a social purpose builds social capital by strengthening the business’ operating context and increasing trust. Having a social purpose also improves financial performance, increases access to capital, and helps manage systemic societal risks. Lastly, a social purpose inspires innovation generation, enabling business transformation, and enhancing resiliency. For some, social purpose goes beyond maximizing profits and shareholder value, and for others, it is how they create value and grow. Either way, profits are an essential and fundamental feature of a Social Purpose Company.
Another reason businesses decide to become a Social Purpose Company is when a values-based owner is preparing to sell their company, and they wish to firmly embed their social purpose going forward. At significant moments in the lifecycle of a business – its founding, merger or sale – it will need to revisit its purpose. Other business leaders choose to develop a social purpose for their business because it can knit their culture and strategy together.
More and more, business leaders recognize that society is expecting that business contributes to creating a better world for all.
Companies that adopt and express their social purpose in all that they do are undertaking business model innovation. Corporate social responsibility (CSR), on the other hand, is a management approach for the company to identify and address its top social and environmental risks and impacts. At its best, it is pursued as a strategy with goals and targets incorporated into a business plan. While an essential quality of a well-run company, CSR influences the business strategy, rather than the business model. Social purpose, on the other hand, is the reason a company exists, a higher societal ambition than a CSR strategy.
UWLM has heard and is responding to our business partners, who increasingly want to play a much greater role in creating positive social change with the United Way in addition to, and beyond, traditional philanthropy. It is exploring and piloting innovative new ways to work together to co-create an even stronger community, where individuals, communities, and businesses thrive – for the benefit of all. Through the Social Purpose Institute, UWLM is helping companies learn more about becoming a Social Purpose Business and how they can create more societal value for their customers, employees, and communities through their business activities. It’s how the UWLM will remain relevant in a changing world and continue to work towards creating healthy, caring inclusive communities with all its partners, including non-profits, government, businesses, and individuals.
United Way is uniquely positioned to foster social purpose, bring about new partnerships, and new ways of working together to foster real and lasting social change. It has a broad network of relationships in the community and across sectors. It has deep roots in understanding its local communities’ needs and social challenges. It has the expertise and trust to bring together the right people to make change.
B Corp and the Social Purpose Institute initiatives are different and complementary. The Social Purpose Institute provides information on how to develop and embed a social purpose and matches Social Purpose Businesses with opportunities to collaborate with other businesses and stakeholders in tackling societal issues. The development, adoption, embedment, and activation of a social purpose is a multi-year strategic undertaking, that is likely to result in social innovations and social collaborations along the way. At any point in the process of becoming a Social Purpose Business, including beforehand or after, a business may wish to pursue B Corp certification. For companies adopting and then advancing their social purpose, the B Corp assessment tool will become a useful checklist to identify and address gaps.
B Corps are companies certified by the non–profit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency. B Corp companies are businesses that self-assess against a third-party Social Impact Assessment and score a minimum of 80 of 200 points. To maintain their status, B Corps must re-certify every other year. 10% of companies are randomly chosen for on-site audits. Companies must also amend their articles of incorporation with a special resolution that company directors will consider all of a company’s stakeholders to inform their decisions.
Some of the B Corp assessment questions include social purpose topics, such as ‘does your company’s mission statement commit to a specific positive social or environmental impact?’; and ‘are any of your products or services designed to materially improve society or the environment and to what degree?’. (paraphrased). For more information on B Corp, please visit: B Lab Canada.
Yes. The process of becoming an authentic Social Purpose Company centers around the assets and competencies the company brings to the world and then matches those to the societal (social or environmental) issues on which it can have the most impact and/or which will impact the company. Companies from all industries and of all sizes have something they uniquely bring they can mobilize for social good. It’s about uncovering what that is and then embedding it into the company to begin sustained societal change, by the very act of doing business. No company can do this alone – and so it naturally means new collaborations and partnerships are forged to collectively create long-term, significant change.
If done through a rigorous process such as the process the SPI programs offer, companies should be able to develop, implement and accrue the benefits of a social purpose within three to five years, depending on various factors. It takes about a year to define and clearly articulate the company’s social purpose and another year to fully embed it into the company, aligning relationships, processes, strategies, and operations to the social purpose. Then it is another year or more to build capacity to collaborate effectively with ecosystem partners, foster social innovation, and position the business to progress on its social purpose goals. Every company is different but these are broadly the timelines to thoroughly bring a genuine social purpose to life in a company and in the ecosystems where it is active.
A company’s social purpose is why it exists, its overarching ‘North Star’ by which everything is viewed (a decision lens) and aligned to. A company’s Vision describes the ideal state that it wishes to achieve; it is a declaration of where the company is headed; it sets a defined direction for the company in the future. Some think of it as “how is the world made better by our work?”. Mission is what a company does, similar to a mandate. Values define how you behave. Your Values should be enduring, and your Vision could be a 10-year (or more) strategic direction, which sets the course for your company’s growth strategy and social purpose execution.
See the graphic below that illustrates this.
The United Way has developed relationships with leading local and global social purpose business experts, practitioners, and advisors. Through this network, the United Way curates quality learning and activation experiences for the business community and its partners. With its cohort-based and professional development programs, the Social Purpose Institute at the UWLM is unique in having a proven success track record with businesses that are activating and living their social purposes every day.
No, the United Way is not using this project to attract corporate donations. United Way’s ambition through this initiative is to support interested businesses to adopt, embed, and implement their best-fit social purpose so that businesses bring all of their assets, resources, competencies and relationships to improve society. This includes and goes beyond philanthropy.