Enabling Social Good in a For-Profit Environment: What Works? Methods for Creating and Supporting Social Impact

Abstract

What makes a successful for-profit social venture? While some of these principles may be strategies that would benefit any for-profit venture, not necessarily one with a social mission, I hypothesize that themes will emerge that are particularly relevant to helping businesses thrive that are also pursuing social missions. This is because many of the responsibilities and considerations of a for-profit social venture differ from traditional companies. This thesis seeks to provide three key pieces of information to any aspiring founder; what does success look like for a social venture, how does one go about measuring it, what needs to be done in order to create a successful venture that generates the most good in the world. This is done with the goal of discovering which of these mechanisms can best be aided by governmental policy to help this new type of venture. I approach this investigation through the lens that because this is a relatively new business model, it is important to create a new categorization system for these ventures as a helpful way to contextualize how they function and add value to society. Traditional metrics for success such as revenue, traction, year over year growth, and the like alone are not sufficient when evaluating social ventures. Thus, a clear understanding of what success truly looks like in this field, how it is measured, and action steps on how to achieve it are needed. I will be looking at case studies of social ventures that have garnered significant attention in recent years due to their perceived conventional success and growth. I will look for themes and threads of commonality within the examples in an effort to extract principles that can be considered best practice for those seeking to start successful social ventures. Several themes emerged among the successful ventures I studied. Most prominently, successful ventures were started by founders who (i) had a personal connection to the issues they were trying to solve, (ii) the founders taking pride in measuring impact outcomes, and (iii) successful ventures produced “experience-driven” products and services. One of the strongest factors is (iv) a deep commitment to their given area of social impact, and a high degree of openness with the customer about this priority, which creates the goodwill that ultimately largely powers the company’s success. As these businesses have a track record of truly having a positive impact on the world when their goals are clearly outlined and measured, I also recommend that federal and local governments alike embrace policies that support the adoption and growth of the for-profit business model, namely in the form of pursuing a legal status as a benefit corporation, among others.