Recently, Larry Fink, the CEO of BlackRock, the world's largest investing firm, sent a letter to the businesses he invests in, imploring them to be more socially responsible:
"Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate."
Fink's letter (read the whole thing here) made big news because BlackRock, like most investment firms, has traditionally been focused on only one thing: financial return. This makes sense given that BlackRock's primary fiduciary responsibility to its investors is to enhance the value of the money it manages. Now they are defining value differently than just financial returns.
Why? And is it good business? Fink understands something that those of us working directly in the social sector instinctively know: the so-called millennial generation (those between the ages of 25 and 38) are keenly interested in social impact, and this includes the vendors they use and the brands they buy. In fact, a 2015 Nielsen study found that 73% of millennials surveyed were willing to spend more on a product if it comes from a sustainable brand, and 81% expected their favorite companies to make public declarations of their corporate citizenship. And when you consider that millennials are going to be the recipient of more than $30 trillion in wealth transfer from their Baby Boomer parents over the next decade, you realize satisfying millennials is critical to business success.
How do you become a social impact business?
It's easy to talk about social impact, but for most businesses it's hard to do. It requires a reorientation on how you define corporate values and culture, and places a premium on making opportunities for your employees to engage the community in meaningful ways. It also requires that you have a clear process for making direct investments in organizations and causes that your business wants to support.
Unless you are a large company, you likely don't have the infrastructure or staff to do any or all of these things, and may not have the headcount or budget to hire it in-house.
Mission Edge: Your "Social Impact" Partner: At Mission Edge, 501c3 organization, we work with businesses to help them make a social impact that reinforces their ideals, and serves as an engine for enhanced employee engagement and retention.
We do this in three ways:
- Corporate foundation management and planned giving. We help companies set up their corporate foundation, easily creating a vehicle to deploy capital in the community. Using our fiscal sponsor infrastructure, we provide complete accounting and transparency to the giving process, and help company's set up their policies and procedures for the social impact investments. To date we've deployed more than $15 million into projects working in the community.
- Corporate skilled volunteerism, Board service and Mentorship. We offer a full complement of programs that link corporate employees with direct engagement opportunities working with social impact organizations. In addition, we bring corporate employees in to mentor new and innovative nonprofits and social enterprises through our SAIL accelerator. To date we've linked corporate employees with skilled projects at PCI Global, ARTS, Ocean Connectors and more.
- Investment support and analysis. Because we are deeply engaged in the San Diego social sector, we are able to provide businesses with guidance on how to make a social impact that is in line with corporate values and strategy. We can help with sector analysis, investment vetting and other support services to ensure a good outcome.
How is your business showing its social responsibility? Contact us if you would like to discuss some ideas for how you can help your company make a greater social impact.
Remember, you can do well and do good at the same time. The future demands it.