Call it values or call it humanity (recalling perhaps the roots of philanthropy in Ancient Greek as love of human beings), in giving, we are more in tune with our values, our best hopes for ourselves, more in tune with our own humanity.
This is why we talk here about ‘giving back’.
Others have given to us, from our parents and families to our friends and community, our nations too in the form of nurturing infrastructures of upbringing, education and opportunity. We are not just giving, we are giving back.
This is not just a turn of words. It is a more open-eyed recognition of what we mean by success, that we are beneficiaries of help from others and in turn we are able to return the favour. The Nobel Prize winning economist Herbert Simon has argued that 90% of our economic wealth can be traced to shared, social investment of these forms.
Without giving back, we would all be less.
How we give back of course reflects who we are. In exploring the practices of giving back in what follows, we can’t claim to be comprehensive. But the key contexts– including delving into corporate strategies, and the evolving landscape where charity converges with entrepreneurship – are encouraging places to start, orientated towards how we can take shared action with others.
We can’t wait to see how you find ways to give back.
Charity as a business: How non-profits are adopting entrepreneurial mindsets to drive impact
There is a long history of charitable action, but that doesn’t mean that charities are backward-looking. Following the example of great social entrepreneurs such as Michael Young, Sheila McKechnie and John Bird, non-profit organisations are increasingly adopting a visionary, entrepreneurial mindset. This strategic shift involves being far more savvy in commercial terms in pursuit of charitable values, not only to amplify their impact but also ensure financial resilience and long-term sustainability.
- Diversifying revenue streams
A crucial facet of this shift is the diversification of revenue streams. There is growing recognition of the scope for non-profits to move beyond traditional donation models, venturing into alternative funding sources such as trading income as a social enterprise, or investment options such as community shares. Here at Pilotlight, we operate as a charity and as a social enterprise. It is not that diversifying income is an end in itself, the key is to find the right financial balance for the organisation in question. But by embracing diverse income streams, charities can enhance their financial resilience and reduce their dependence on the uncertain cycles of donations.
- Leveraging innovation for social impact
As in any commercial setting, your future earnings, future impact and your organisational sustainability tomorrow will reflect the extent to which you are able to innovate effectively today. By staying agile and fostering a culture of innovation, non-profits position themselves as dynamic agents of change. Charities can leverage technology, creative thinking and adaptive strategies to address complex social challenges. To learn more, one of the earliest resources on non-profit innovation by the late, great Robin Murray is still one of the best – The Open Book of Social Innovation.
The benefits of running a business with a charitable purpose
As charities have learned from business, so too businesses have learned from charities. A longstanding focus on what makes for business excellence, for being great and not just good, has evolved into a growing movement embracing the practice of ‘purpose’. In effect, this is directly akin to businesses signing up to charitable (or wider public benefit) goals.
The evidence is encouraging that businesses that integrate a wider purpose into their core mission experience a cascade of benefits. The two key ones are heightened employee engagement and augmented brand reputation.
- Employee engagement and satisfaction
For all the pressures of earning a living wage, most commentators recognise that the contemporary workforce also seeks more than just a job; employees are increasingly drawn to purpose-driven work environments. Cultivating a sense of purpose within the workplace can help attract top talent and it can also nurture a more motivated and productive workforce. As a result, businesses that prioritise giving back do appear to report higher levels of employee engagement and satisfaction.
- Enhanced brand reputation and customer loyalty
In a similar way, thanks to the pioneers of ethical shopping, consumers today are more conscious about where they invest their money. Businesses that align with charitable causes not only enhance their brand reputation but also foster customer loyalty. There can be a virtuous circle between what a company does to give back and how its brands resonate in a lasting way with a socially conscious consumer base.
The challenges and opportunities of running a charity as a business
A business or social enterprise model for charities is not a simple option. It offers new opportunities, but it can also throw up a distinctive set of challenges. The pressures of commercial trading are powerful – academics talk of the way in which organisations shapeshift like chameleons to become more like those with whom they are competing in markets (‘isomorphism’). The key to success is for charities to recognise and to navigate both the opportunities and the challenges if they are to succeed on a sustainable basis without compromising the integrity of their values and mission.
- Financial sustainability
The most straightforward model of financial sustainability is one that relies wholly on grants or one that relies wholly on trading income. With these, you can align the culture and systems to what you are offering. But this comes with a dependency on a single source of income. Where charities embrace trading, with part of their income being earned as a social enterprise, this can be a benefit, if it reduces the risk of dependency or it generates income from new and additional sources. But of course it can also represent a strategic risk if it requires costs or investment that the charity will find hard to afford.
Balancing the financial equation of a charity-as-a-business model can be intricate. We tend to talk of finding your financial balance with the charities we support, rather than assume that financial diversification is always a good thing.
- Maintaining mission integrity
The second challenge is one around primary purpose. As non-profits adopt entrepreneurial strategies, a delicate balance is required to ensure that profit goals do not overshadow the core mission of social impact. Is trading, for example, a means to an end, such as a way to generate revenues to spend on core charitable activities, or is it an end in itself, such as a way to advance the mission of the charity directly? The first in particular carries risks of mission creep.
The role of social enterprise in the charity sector
Social enterprises, organisations that blend profit-making with social impact, are therefore on the rise as significant contributors to the charity sector. With this model, comes some key components of a model that looks to sit in a balance between the traditional models of private and charitable sectors.
- The dual bottom line
A defining characteristic of social enterprises is their commitment to a dual bottom line—financial and social. This allows organisations to address social issues while maintaining financial viability. By intertwining profit with purpose, social enterprises chart a course towards sustainable impact.
- Measuring social impact
Effectively measuring social impact is a challenge and social enterprises have often been in the lead in exploring methodologies and tools to quantify and communicate their impact to stakeholders. By providing transparent metrics, social enterprises enhance their credibility and attract support from stakeholders who prioritise measurable outcomes.
How businesses can use charity to build brand awareness and loyalty
In UK business, the first generation of ‘cause related marketing’ in the 1990s used charities and people’s willingness to take action for charities to reflect well on the company running the campaign. Computers for schools was an early example in the UK. Since then, there has been more of a critical take on the way in which companies can pick up – and put down – charitable causes, but the most progressive businesses have been adept at taking advantage of what they do to give back to position themselves and their brand in the public eye. You can think of this as a ‘halo effect’.
- Creating authentic connections
A sense of authenticity is what makes the difference. Businesses that get this right are able to create genuine connections with their audience by aligning with causes that resonate with their values. Through authenticity, businesses can forge emotional connections that go beyond everyday transactions.
- Showcasing Impact
In turn, authenticity, to be sustained, calls for a degree of transparency and accountability. Businesses can showcase the impact of their charitable contributions where they go beyond the marketing rhetoric to provide tangible evidence and assurance of positive change. By demonstrating a commitment to accountability, businesses can build trust and credibility.
The future of charities as businesses: Emerging trends and innovations
The landscape of charities as businesses is therefore continually evolving. This is shaped perhaps by two key emerging trends that hold the promise of redefining how social impact may be achieved.
- Technology and digital transformation
Technology is becoming an integral part of the charity sector, facilitating innovation, efficiency, and connectivity. Even if technology itself is not staying still, non-profits are leveraging digital tools and platforms to enhance their reach, streamline operations, and amplify their impact. From crowdfunding platforms to advanced data analytics, technology is driving a new era of interconnectedness and charity can be at the heart of this.
- Collaborative partnerships
Collaboration emerges as a linchpin for the success of charities in future, for two reasons. First, strategic partnerships allow organisations to pool resources, share expertise, and maximise their collective impact. This is true across sectors too, where business and charities come together. Second, such as in advocacy and campaigning, collaborative models enable non-profits and businesses to have a louder voice and greater influence, creating a more potent force for positive change.
The ethics of charity as a business: Balancing profit and impact
Values bring people together, but they can also keep people apart. As the lines between charity and business blur, consideration of values become all the more important.
- Ensuring transparency and accountability
Transparency is a way to build trust across diverse stakeholders, particularly if there is independent assurance around what is shared – such as signing up to third party verification standards or certification. By fostering a culture of openness, organisations can build credibility and resonate with constituencies who might otherwise question what is being said. It may or may not be, as David Korten claimed, that ‘corporations rule the world’, but the power of business in influencing economic life is undoubted and the charity sector will always typically be advocates of accountability in that regard.
- Ethical marketing practices
Marketing plays a crucial role in promoting charitable action. From avoiding greenwashing to emphasizing long-term impact over short-term gains, ethical marketing practices are integral to maintaining integrity.
The power of giving back transcends mere altruism; it is a dynamic force that shapes communities, defines corporate cultures, and fuels social progress. Whether through personal acts of kindness, corporate philanthropy, or innovative models where profit converges with purpose, the impact of giving back is profound and transformative.
In this short journey, we have explored the ways in which an agenda of giving back is being reflected increasingly in the landscape of both business and charities, learning from each other, reacting to each other. We have looked at individual and corporate giving, social enterprises, and the ethical considerations that underpin the intersection of profit and impact.
It is easy to frame giving back as an individual action, or the work of a single institution. In truth, we need the humility to see that giving back is about creating collective impact, that giving back cannot be the exception, that it needs to be the norm. To paraphrase what a great person once said, in giving back, we can be the change that we wish to see in the world.
Giving back with Pilotlight
Pilotlight is a charity that helps people and charities to do more for their world. We do this by bringing charities together with business and business experts who can tackle the pressing issues charities are facing.
For our pro bono volunteers, whether giving back through their employer or working with us on an individual basis, supporting charities is a way to give back, but also a unique learning experience. The learning outcomes we track, for Pilotlighters and for charity leaders, include:
- coaching and listening skills
- understanding of different leadership styles
- understanding of society and different sectors.
