Social impact. Social good. Social enterprise. Whatever you call it, it’s on the rise.
Each year, more and more for-profit companies with explicit social improvement agendas are popping up around the world. Meanwhile, established corporations are also getting in on the social impact game, approving programs designed to make some kind of contribution to society at large, above and beyond the requirements of corporate responsibility. While some of these efforts have succeeded, others have had disastrous results.
What does it really mean to be a “social” company, or to have a “social impact” plan as part of a larger business strategy? What distinguishes empty talk about social good from well-organized efforts that make a real difference in the lives of ordinary people? With so many brands trying to prove their commitment to social good, what distinguishes crass marketing ploys from genuine efforts to improve lives?
Executives Roger L. Martin and Sally Osberg put forward a particularly strict definition in their 2007 article for the Stanford Social Innovation Review. In “Social Entrepreneurship: A Case for Definition,” Martin and Osberg argue that “social entrepreneurship” is a special category of business, distinct from other organizations that attempt to promote some kind of benefit for society.
According to them, a social entrepreneur “aims for value in the form of large-scale, transformational benefit that accrues either to a significant segment of society or to society at large [...] the social entrepreneur’s value proposition targets an underserved, neglected, or highly disadvantaged population that lacks the financial means or political clout to achieve the transformative benefit on its own.”
In other words, while a social entrepreneur may return value to their investors, that is a side benefit of their true goal—transforming a bad situation for people without the money or means to do it alone. This understanding of social entrepreneurship deliberately excludes companies and initiatives that provide social benefit without seeking to “transform” the systems that cause the problem in the first place.
For a more generous point of view, we can look to academics Michael E. Porter and Mark R. Kramer, and their work on “shared value.”
In their 2011 Harvard Business Review article “Creating Shared Value,” Porter and Kramer argue that current models of value creation focus too narrowly on short-term profit for shareholders, at the expense of other forms of value that benefit not just companies, but the communities in which they operate. They urge companies to focus instead on “shared value,” which they define as “ creating economic value in a way that also creates value for society by addressing its needs and challenges [...] expanding the total pool of economic and social value.”
According to them, “Companies can create economic value by creating societal value. There are three distinct ways to do this: by reconceiving products and markets, redefining productivity in the value chain, and building supportive industry clusters at the company’s location.”
Social Impact: A High Bar
While the “shared value” concept is broader than Martin and Osberg’s concept of “social entrepreneurship,” it still excludes many of the brands we tend to think of as providing “social impact” or “social good.”
The popular one-for-one giving model, for instance, doesn’t qualify as an example of either social entrepreneurship or shared value creation. While companies that give away one product for every product they sell are certainly providing some social benefit, they do not necessarily work to transform the underlying systems that cause people to lack such products in the first place—meaning that they are not engaged in social entrepreneurship. They also do little to reshape the way products and services are developed. While one-for-one giving may redistribute value, it is not true shared value creation as defined by Porter and Kramer.
Both the “social entrepreneurship” and “shared value” frameworks place the creation of societal good before profit—if not at the expense of profit. Both also assume that a company aiming to create lasting societal good will try to transform society in some way, rather than just delivering value through established channels.
In other words, if we use these points of view to form a rough understanding of what a “social impact” company actually is and does, we can conclude that such a company must:
- Deliver material value to people who may not be able to pay the company back in money or publicity opportunities, and
- Do so in a way that creates lasting, systemic change, ensuring that the affected population will continue to receive value long after the end of any particular campaign.
No small task! But even with the bar set so high, there are some companies whose social impact initiatives satisfy both criteria.
Beer, Soap, and Bouillon Cubes
In her 2020 Harvard Business Review article "Marketing Meets Mission," academic and Unilever social mission director Myriam Sidibe explores the work done by several major brands to positively influence public health in parts of Africa, Asia, and Latin America.
Carling Black Label Beer, for instance, has used its strong position in the South African market to lead large campaigns against domestic violence directed at women—which studies show is linked to the nation’s record-high levels of alcohol consumption. Knorr, a Unilever-owned food brand, successfully worked with public health officials in Nigeria to increase national consumption of iron-rich leafy greens and bouillon cubes, helping to address the country’s widespread problem of iron deficiency anemia in young women. Finally, in a campaign spearheaded by Sidibe, the Unilever-owned Lifebuoy soap brand has supported and organized initiatives to increase handwashing in Africa, Asia, and Latin America, leading to a significant reduction in diarrhea, respiratory infections, and eye infections.
In addition to spurring systematic change and creating shared value, each of these brands demonstrates, in Sidibe’s words, “license to try”—that is, some logical connection to the issue the brand is trying to address, and the resources to make a real impact. Carling Black Label can speak with some authority on the impacts of alcohol abuse; Knorr can honestly claim a stake in discussions around nutrition; Lifebuoy has good reason to talk about hygiene; and so on.
In each case, the brands are not overextending themselves in a shallow attempt to gain points with the public by glomming onto the social issue of the day. Instead, each brand works to solve a well-defined problem that is within the scope of its actual expertise and abilities. Unlike Ancestry.com’s tone-deaf attempt to address the legacy of slavery in the United States, for instance, the above campaigns demonstrate a deep understanding of the issues involved, and a commitment to results.
Making a "Social Impact"
So, how can brands interested in social impact set up campaigns that are likely to spur long-lasting positive results? Sidibe argues that the best social impact campaigns are supported by five “roots”:
Inspiring Behavioral Change
For the benefits of a social impact campaign to stick, it will need to inspire a population to dramatically change the way it approaches a given problem. The best social impact campaigns use the techniques of marketing to convince large numbers of people of the benefits of doing things differently.
Winning Internal Support
Social impact campaigns are inherently risky for the companies that undertake them—no company wants to make a mistake and be perceived as ignorant, cynical, or actively harmful. For a campaign to succeed, all stakeholders at a company must be educated about these risks, and shown how the benefits of the program outweigh the costs of a potential failure, both for the brand and the population it hopes to serve.
Measuring the campaign’s impact on brand affinity, organizational morale, public trust, and other benchmarks is critical to proving its positive benefits, and securing ongoing support from key decision makers in and out of the organization.
Brands can do more good when they work with partners than when they work alone. Coordinating with government agencies, NGOs, and other stakeholders provides greater access to skills, resources, and networks, improving the program’s likelihood of success.
Driving Systemic Change
Finally, social impact campaigns should seek to make lasting change to the systems that create social problems in the first place. Rather than papering over problems with temporary solutions, brands aiming at social impact should design and implement plans that will continue to deliver value to affected populations long after a particular campaign is over.
Clearly, running an effective social impact campaign isn’t as simple as making a few feel-good advertisements. Companies that want to leverage the power of their brands to make a real difference in society have a hard road ahead of them—but the benefits of making a genuine impact can make all of that work worth it.