Maybe it sounds hoity-toity to say you’re an altruistic business. Yet, it’s a lot easier to wrap your mind around when you think about it as setting up a giving-focused business model. This article discusses how to build an altruistic business.
What is an altruistic business? Authors Getz and Marbacher define it as “a business whose purpose is to create social value first, not social value as a by-product of—or along with—profits.”
Why should you start a company that cares? For one thing, you’ll enjoy the good feelings that come from helping others. At the same time, it benefits your business too. Advantages include:
- Greater reach in the community
- Improved relationships with partners
- Enhanced customer loyalty
- Increased employee engagement
Across industries, there are compassionate companies that are making a difference, especially during the COVID-19 pandemic. For example, a medical manufacturer worked nights and weekends at no extra cost to deliver ventilators faster. Or a French textile producer shared its high-quality mask design online to let other manufacturers quickly produce reusable, washable fabric masks. Or a Belgian energy company didn’t charge for energy consumption for two months.
So, how do you build up a compassionate business? This article provides several important considerations in developing the giving-focused business model. We’ll cover:
- Defining a business mission
- Establishing your altruistic business model
- Encouraging employee involvement
- Promoting the ways that you’re giving back
Define a Business Mission
From the outset, your company mission should include a philanthropy focus. A charitable business prioritizes social value. Even if it means a financial loss, an action that benefits the broader community ecosystem would be pursued by the company.
Financial performance is not the end goal. It is a result of altruistic business actions. So, the mission will need to reflect a desire to put the community first.
Think of the glasses retailer Warby Parker, which gives a pair away for every pair sold. Or shoe brand TOMS which says it is “in business to improve lives.” For every $3 the company makes, it gives $1 away.
Dairy and food producer Danone takes a community-led business approach too. In Bogra, Bangladesh, its yogurt plant created more than 350 employees from an impoverished region and uses milk from over 500 local micro-farmers to develop a micronutrient-enriched product to counter malnutrition.
Establish Your Altruistic Business Model
Make your altruism about more than charitable contributions. Incorporate the giving-focused business model throughout your business planning. In addition to the mission you’ve outlined above, write down your business objectives. These will become the pillars for how you build your business up.
Increase the likelihood of staying the course by recording the goals in your business start-up documentation. Publicize it on your business website. Give someone the responsibility of keeping the business accountable for the compassionate mission.
You’re more likely to achieve your objectives by setting measurable goals and making them quantifiable and specific. Establishing deadlines can help your continued commitment to the charitable business as well.
Encourage Employee Involvement
Your altruism needs to be something where everyone can get on board. From the top down, develop a culture that embraces compassionate business.
Managers can practice servant leadership, which puts the business’s people first. Consider the trust and enthusiasm employees will show for a leader that they believe thinks of them first. Dan Price, CEO of credit card processing company Gravity Payments, reduced his own compensation from about $1 million to institute a new minimum wage of $70,000 at his company.
Encouraging employees to be altruistic and make choices that prioritize community also benefits engagement. “Doing these things leads to a higher sense of engagement, performance, retention, and communication,” said Jennifer Knickerbocker of Deloitte. The firm encourages its talent to offer pro bono services and volunteer, serve on boards, and participate in service trips. Knickerbocker added, “When you invest in people in a way that makes them perform better, you’ll be better for it too, and the results you achieve together will be greater.”
Promote the Ways You’re Giving Back
To achieve the full benefit of the giving-focused business model, you have to let others know what you’re doing. This is how you find business partnerships that can help you achieve your goals. You can reach out to nonprofit organizations to see where you are duplicating time investment. Review online directories to find like-minded businesses and bring those business leaders together to accomplish even more good for the community.
Promoting your altruistic business model on social media, your business website, and in press releases can also help you build a reputation in your community. This can draw in new customers, increase existing customer loyalty, and lead to new avenues for business success.
Conclusion
Now that you know how to build an altruistic business, it’s time to get out there and do great things with your products and services. Taking this approach from the get-go can help you corral startup costs, attract and retain employees, boost company revenue, and foster goodwill with business partners, customers, and your community.
