The New Economic Model: Profit + Purpose 2.0

Amy Jo Martin
April 26, 2017

Amy Jo Martin

Founder of Digital Royalty and Social Media Expert

Bcorp

The business model of the future. What's next for Do Good + Do Well companies?

Double or even triple bottom line companies. Most people are familiar with the them thanks to the TOMS shoes phenomenon. The buy one, give one business model that does well ($) and does social good at the same time. For each pair of shoes you buy, TOMS gives a pair to someone in need. The new BOGO - exchange get for give.

Secretly, I can't say I'm in absolute love with the actual shoe design but I do love them and proudly buy the shoes because it makes me feel good to support the company. And let's be honest - it's a pride thing to flaunt your "giveback-ness" on our feet. Vibrant conversations with complete strangers have been sparked due to the charitable tokens on my toes. Then there are Warby Parker glasses. Even better, they're on your face versus your feet. They make for great first impressions – hello giving, caring bright eyes, nice to meet you. Wink.

So what's next? How can we continue to innovate this "do good, do well" economic model in order to use business as a lever for changing the world? I spy an answer to this question.

Before you start your company or non-profit, please consider this option. (Or at least read the bullet points below. I won't be offended if you skim or skip to the magic bullets. I actually think in bullet points so more power to you.)

I've come across a few companies that have taken the "for profit, for purpose" one step further. They're integrating a solution to a social problem into the product. For example, ArtLifting helps the homeless and disabled sell their artwork so they can put a roof over their heads. Brilliant concept given the problem and solution are so tightly integrated into the company's sellable product. The challenge has become the core component of the company and solution. Research has shown these homeless artists don't want to be a charity case, they don't want a handout. They just want an opportunity to change their life. Having a job restores their dignity.

So, why wouldn't someone just start a non-profit or charity? What's the difference?

With non-profits, there's a finite amount of resources. Think of a bucket that has a certain amount of money inside. Once you use that money, you're done. You have to go out and ask for more. Fundraise. Sometimes this means filling out 14-page grant applications for a $5k grant that take a year to process. Slow moving. There are so many non-profits that are fighting for this money but it's incredibly limited.

With a for profit + for purpose company, you're growing your bucket of money and self-sustaining. You have the potential to grow and scale your business with infinite potential resources because you're generating revenue while also giving back and making a social impact. With ArtLifting, the homeless artist receives 55% of the profit, 44% goes to the company and 1% goes to shelters they work with. They license the art, print the art on tangible items and sell the original art as well as prints. ArtLifting is what's called a b-corp, a Benefit Corporation.

What's a b-corp? Just like an s-corp, it's a legal business structure that allows the government to classify your business type. The main difference is that with a b-corp, you have a legally-binding social mission so the company can protect both bottom lines - financial and social.

Meaning, if you're filing as a b-corp and you have investors, they can't push the company away from the social mission in order to maximize profit. The company can protect their social bottom line so it's not compromised for financial success. If investors want to shift direction or strategy in order to make more money but that will jeopardize the company's social impact, the company can legally push back and lean on the b-corp status. There are many companies out there that have a give-back component but they don't file as a b-corp. You don't have to be a b-corp. As of now, there are no tax benefits to b-corps. (Not yet at least!)

PROS to For Profit + For Purpose Business Model:

  • Your product and message IS your marketing. By simply existing, your customers are your sales people. It can become a movement. (TOMS shoes, example). Example: ArtLifting didn't spend a penny on marketing to get started.
  • You know those millennials that everyone has an opinion about? They are conscious consumers - meaning they care where they spend their dollars, even it it means paying more, and this trend is transcending the millennial generation.
  • Legal protection (b-corps explained above)
  • You can make MORE impact as a for-profit company.
  • This allows people to start for-profit companies that serve as wage-earning, full-time jobs vs. starting a charity that's a side hobby. Because this economic model is generating revenue, it can be a "day job" where you focus all of your time and energy.
  • You're doing good and doing well. (Aka - have cake & eat it too. Yummy.)

CONS:

  • Skepticism - Anytime there's something new, people will develop innovation allergies. Some people have concerns about exploitation and companies using a social mission in order to get more profit. (When actually the impact has more potential as a for-profit entity.)
  • Lack of education - The business model simply isn't well known yet. This fuels skepticism and many people are not aware they have this option when starting a company or business.

To learn all there is to know about this business model, listen to Liz Powers, co-founder of ArtLifting, explain her journey and the details of getting started. She bootstrapped her company starting with $4k and personally living very lean in her 20's. She quickly grew the business to six figures in revenue before receiving funding from investors like Blake Mycoski from TOMS shoes.

Do good, do well. Do double bottom line. For profit + for purpose. For sure.

The post The New Economic Model: Profit + Purpose 2.0 appeared first on Amy Jo Martin.

Amy Jo Martin

Want Amy Jo Martin for your next event?

Find out more information, including fees and availability.
Find Out More
Keep Reading
Sticky Note Strategies
Amy Jo Martin
Amy Jo Martin
April 02, 2019
You can use this quick method anywhere, anytime to deal with any situation – big or small. You need 4 different ...
Building Your Personal Brand
Amy Jo Martin
Amy Jo Martin
March 25, 2019
Whether you have no following or a celebrity following, the five principles below are important to keep in ...
The Art & Science of Navigating "Why Not Now?"
Amy Jo Martin
Amy Jo Martin
January 18, 2018
After spending the past decade up-close and personal with some of the world's most iconic ...
Sticky Note Strategies
You can use this quick method anywhere, anytime to deal with any situation – big or small. You need 4 different colors of sticky notes. Step 1: Choose one sticky note (color 1) and write your Goal, Opportunity or Idea. (Note: It could be disguised as a current Problem.) Step 2: Directly below the first sticky note, write (on color 1) WHY you wa...
Read More
Building Your Personal Brand
Whether you have no following or a celebrity following, the five principles below are important to keep in mind as you build your brand online. (And they'll make the social media algorithms like you!) For more than a decade, I've been helping build some of the largest personal brands out there, including for Dwayne "The Rock" Johnson, Shaquille...
Read More
The Art & Science of Navigating "Why Not Now?"
After spending the past decade up-close and personal with some of the world's most iconic Renegades and recently interviewing more than 100 of them, I've started to spot behavioral trends. These are similarities in how they navigate from idea to action, from dreaming to doing. I ask them to tell me about a moment, hour or day when they had a bi...
Read More
Social Media: Anything is possible
I've shared my frustrations with social media and I've listened to many of you express similar sentiment. In reality, most of our frustration is with social media users (humans) not necessarily the communication channels themselves. I've recently witnessed some incredible situations where social media has created paradigm shifts and saved...
Read More
Social Media: The Way Forward
I've been hitting the sauce pretty hard every single day for the past decade. The social media sauce, that is. It's been a huge part of my career and life. I'm grateful to have had a front row perspective and hands-on participation with some of the biggest events, campaigns and personalities that have shaped the space. After 10's of thousands o...
Read More
Social Media Cleanse
** Update video below. Confessions from my social media cleanse. Hello Friends, Today I’m entering my first social media cleanse. For the next week, I’m off the sauce. Social media that is. Consider it a detox. This is an open invite to anyone who wants to join my little experiment. My goal is to jumpstart a shift in my use of social media. ...
Read More
The New Economic Model: Profit + Purpose 2.0
The business model of the future. What's next for Do Good + Do Well companies? Double or even triple bottom line companies. Most people are familiar with the them thanks to the TOMS shoes phenomenon. The buy one, give one business model that does well ($) and does social good at the same time. For each pair of shoes you buy, TOMS gives a pair t...
Read More
Month of Bizarre Media Moments
We're currently experiencing the largest media paradigm shift in decades and it's just the tip of the iceberg. Over the past 30 days, I collected a few situations that have blown my mind. They're highlighted below. This demonstrates just how quickly our media environment is changing. Call them bizarre, call them fascinating, call them Big Leagu...
Read More
Reverse Engineering Empathy
Empathy and bubbles. Two buzzwords. The reason we're so obsessed with these words is because we have a deficit of one and surplus of the other. Six months ago I moved from an urban city in a blue state to a rural area in a red state. When I say rural, I mean the closest town has a population of 948. So, I literally and physically moved int...
Read More
State of the (Media) Union
Social media is the ultimate democratizer, equalizer, uniter and divider because it gives a voice and platform to anyone who is willing to engage. We are witnessing, and contributing to, the largest media paradigm shift in decades. The convergence of our country’s declining trust in traditional media, the growth of social media adoption, the ab...
Read More