The domino effect of doing well by doing good

The world is changing in several ways. Technology is evolving and shaping people’s lives, new services are available, changing the way we see and do things. However, this changes’ pace varies significantly from reality to reality, and while some people are benefiting from holograms and augmented reality, some others are struggling with health issues caused by poor sanitization. But as I mentioned earlier, the world is changing, and one of the changes I want to outline is that nowadays there is more awareness around the BoP’s problems and there are more efforts being done around that. I do believe, as well, that we are not just facing a trend but an actual change in heart.

Gen Y-ers and their seek of purpose

There is something remarkable and very different about the millennials that is valuable for our means: this new generation is more socially conscious. And as they try to project that on their daily activities, the workplace has been highly impacted by this change of priorities. Millennials don’t just go after a salary, but after a job that satisfies them and that is aligned with their philosophy of life.(1)

Why is this important? Social enterprises can highly benefit of this. They can fulfill many millennials’ expectations and priorities, and get an injection of world class talent to their businesses. And having a quality workforce enhances excellent results, which later attracts investment.

The other face of corporations

This perspective and motivation shift hasn’t only affected people. Markets in general had to evolve and react to this new factors. Furthermore, as the diffusion ways were highly effective, sticking to a new way of doing business is highly appealing for companies too and is being seen as a competitive advantage. I particularly find the following trends very interesting:

• Important companies are making socially responsible “investments”. And the one that I found very impressive is Goldman Sachs’s interest in Social Impact Bonds. They were the biggest investors for the first US SIB program, giving $9.6 million for the cause (2), and even that it is generating loses instead of revenues, they are not planning to give up. Furthermore, they are willing to invest another $4.6 million in a similar program (3). Although not all companies have Goldman Sachs’s liquidity, having them setting an example is a big step for this kind of programs to gain traction.  
• Corporate citizenship has become a big deal. Being a good corporate citizen gives companies visibility and make them more appealing for investors and potential employees. There are annual rankings measuring this and being published on important media, such as Forbes magazine. (4)
• Companies are willing to work with social enterprises. As this alliance can empower both parties’ employees and make them gain more skills (among other benefits), some companies are finding very appealing to participate in this symbiosis. One interesting example I found was Deloitte UK, incorporating social enterprises to their target customer’s list not just to make profit but to benefit their employees (5).

Why am I bringing this up? I believe this new dynamic will have an impact in the market, promoting an environment where social innovation is an important player. It is right now impacting people and companies. Even more importantly, I believe this will also continue in the mind of investors, and when the market is finally stable for social enterprises, SIBs, and similar social motivated investments, it will be not just a trend but a way of profitable investment that will be here to stay.

(1) The Guardian: Generation Y: why young job seekers want more than money. February 19, 2014. http://www.theguardian.com/social-enterprise-network/2014/feb/19/generation-y-millennials-job-seekers-money-financial-security-fulfilment

(2) Goldman Sachs: Social Impact Bonds. October 2014. http://www.goldmansachs.com/our-thinking/pages/social-impact-bonds.html

(3) Reuters: Wall Street not giving up on U.S. social impact bonds. July 28, 2015. http://www.reuters.com/article/2015/07/28/us-usa-socialbonds-idUSKCN0Q22GF20150728

(4) Forbes: America’s 100 Best Corporate Citizens. April 13, 2013. http://www.forbes.com/sites/jacquelynsmith/2013/04/11/americas-100-best-corporate-citizens/

(5) Social Enterprise Buzz: Why Deloitte UK is choosing to work with social enterprises. June 25, 2014. http://www.socialenterprisebuzz.com/2014/06/25/why-deloitte-uk-is-choosing-to-work-with-social-enterprises/