Does doing good automatically make an organization a social purpose brand?
Walmart is the USA’s largest grocery chain. They sell organic produce in many stores that are located in areas where these products aren’t commonly available. While we applaud them for offering healthier choices, this doesn’t make them a social purpose brand. They’re a brand taking advantage of a rising trend in the produce market. Helping people eat healthier isn’t their purpose. Plus, there’s been justified criticism around their working conditions and negative impact on local small businesses. In our view, they’re not a social purpose brand.
Xerox has several excellent programs that support their corporate social responsibility (CSR) efforts. Their Community Involvement Program, is a “ ... long-running grassroots program (that) backs the voluntary spirit of our employees with funding support from Xerox.”
It’s a great program and a prime example of CSR done well. However, these efforts don’t make Xerox a social purpose brand. They’re a company whose primary goal is to make and sell products that benefit their shareholders through profits. Their CSR programs, while laudable, exist to offset their social, economic, and environmental impact. For us, an organization that has a CSR arm isn’t a social purpose brand.
Categories of Social Purpose Brands
We think of the following types of organizations as social purpose brands:
- Social Enterprises. We believe that the profit + purpose model is just as valid as the nonprofit approach.
- Nonprofits. Also referred to as non-profit organizations, not-for-profit organizations, non-business entities, and non-governmental organizations (NGO’s)
- Private, public, and community foundations
Let’s look at descriptions of each these entities:
Social Enterprises are quickly evolving, but we see them as organizations working towards a social mission using a market-driven revenue model.
Nonprofits are tax-exempt organizations that exist to fulfill a social mission that improves lives by addressing social issues or environmental concerns.
Private Foundations are a type of nonprofit with privately held pools of funds. They primarily support causes that are important to their founder(s) through grantmaking.
Public and Community Foundations are public charities that sometimes provide direct charitable services to the public, but they mostly focus on grantmaking.
What about B Corps & Public Benefit Corps?
There is a perception that all Certified B Corps are social enterprises. But, that’s not always the case. Per their website, “B Corps are for-profit companies certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency.”
Many Certified B-Corps fit within our concept of social purpose brands, such as LEAP organics, whose products “make both your skin and Mother Nature very happy.”
But others don’t really fit the bill, such as Athleta. A Gap, Inc. brand, their primary focus is on creating premium performance apparel. In business since 1998, they became a Certified B Corp in March of 2018. Their business wasn’t formed to address a social issue and their parent company is not a Certified B Corp. Although we applaud their move towards a B Corp structure, Athleta doesn’t fit our idea of a social purpose brand.
According to the Benefit Corporation website, “A benefit corporation is a traditional corporation with modified obligations committing it to higher standards of purpose, accountability and transparency.” Being a Benefit Corporation is a legal term, and as you can see, it doesn’t require that the company is built around a social purpose. As a result, Benefit Corporations don’t automatically fall into our definition of a social purpose brand, though many do.
Our Criteria For Defining Social Purpose Brands
With all of the options we’ve already explored, it’s no wonder that there’s no standardized definition for a social purpose brand. For us, it came down to three questions:
Question #1: Has your organization’s social purpose been baked into the DNA of your brand from Day 1?
If you’re a nonprofit or foundation, you should easily be able to answer this with a hearty “Yes!” By its nature, your organization was formed to address a social issue.
If you’re running a social enterprise, you should also be able to answer this question in the affirmative. Sometimes, the mission of social enterprises is less upfront, especially if they are product-driven in their revenue approach. But a true social enterprise is equally as committed to their mission as a nonprofit.
According to the History page of the Warby Parker website, “Warby Parker was founded with a rebellious spirit and a lofty objective: to offer designer eyewear at a revolutionary price, while leading the way for socially conscious businesses.” A leader in the social enterprise space, it’s clear that they launched with a social mission and their Buy a Pair, Give a Pair program is central to their mission as a business.
This aspect of social purpose brands is of paramount importance to us. If your organization was founded to do good, it fits our first criteria for being a social purpose brand.
What if an organization evolved from a for-profit brand to a social purpose brand? Though they can be difficult to find, we’ve run across social enterprises that started out as profit-driven businesses and nonprofits that have evolved into social enterprises. As long as your social mission is central to how you operate, you fit our first criteria.
Question #2: Does your organization have a positive social impact?
Having a clearly delineated social mission helps us determine if your organization fits our definition of a social purpose brand. Often, an organization’s tagline or mission statement describes their benefit.
The MacArthur Foundation’s mission is: The John D. and Catherine T. MacArthur Foundation supports creative people, effective institutions and influential networks building a more just, verdant, and peaceful world.
Greenpeace’s stated mission is: Greenpeace is a global, independent campaigning organization that uses peaceful protest and creative communication to expose global environmental problems and promote solutions that are essential to a green and peaceful future.
STATE is the Give. Back. Pack. company. For each bag purchased, one fully stocked backpack is hand-delivered to a local child in need.
Just by reading these mission statements, It's clear that these organizations are social purpose brands working towards a positive social impact.
Question #3: Who do you benefit?
Profit-driven companies benefit their owners, employees, management, and investors. While there’s an argument to be made that providing employment and creating profit has a social benefit, these companies aren’t intrinsically social purpose brands. In our view, the reason a social purpose brand is created is to benefit underserved, disenfranchised, marginalized, or persecuted people outside of the organization.
Acknowledging that environmental issues are ultimately social issues, we include organizations that work with these causes through environmental activism, advocacy, and education here as well. The ‘who’ here can be the specific people served by a local watershed, or society at large, as is the case with global climate change.
Putting It Together
The three questions above combine to form the elements of the litmus test we use to determine if an organization is a social purpose brand. You fit our definition if your organization:
- Was founded to address a social or environmental issue
- Has a positive social impact
- Benefits an underserved or marginalized population
The social good space is rapidly evolving, and we’re excited to be part of the conversation. It’s our hope that the term “social purpose” catches on, because we feel that it’s the most accurate and inclusive label to describe the new direction of this space.
To see some examples of work that we’ve done for some amazing social purpose brands, head over to our Case Studies.