For-profit businesses and non-profit organizations have always had opposing goals in the past. For-profit businesses have generally existed for one reason and one reason only: to make money. The more money they made, the better. This philosophy generally resulted in the excesses of the 80-hour workweeks that were often a badge of honor in the 1990s, and the out-of-control excesses that led to the collapse of the mortgage industry in the 2000s. Millennials, who grew up watching it all, have had enough.
Millennials are poised to be one of the most generous generations in history, in spite of being saddled early with more college debt than any generation in history. However, they are demanding more of the businesses they work for than to just turn a huge profit. Millennials want to make a difference in the world and they want their businesses to do the same. Conversely, they are also expecting more from non-profits.
In the past, non-profits have enjoyed the freedom to simply “do good” with very little oversight. Donors often gave because the mission was good, not necessarily because the organization produced significant results. The wealthy felt good about giving and the organizations felt good about “doing good” – even if the majority of their funding went towards overhead rather than actually accomplishing their mission. Once again, however, Millennials want to change that mindset.
They are demanding a better social mission from all types of businesses and more accountability from non-profits. This is giving rise to a triple bottom line in traditional businesses, and even a new breed of business sometimes referred to as a “social enterprise.” A social enterprise has a mission similar to non-profits of the past, but the same profitability goals as any other business. They may raise initial capital through donations to get their business up and running, but they don’t do so without solid business plans and a target date for becoming self-sufficient. While some may continue to rely on donor funding to some degree, most aim to at least gain no more than 40% of their income from donors.
Some examples of these social enterprises include TOM’S shoes that pioneered the idea of sending one item to a developing world for every one item purchased, and the Women’s Bean Project. The Women’s Bean Project hires and mentors formerly incarcerated women to make bean soups and other goods. These are just two of the many businesses that are bringing solid business practices to the world of philanthropy.