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Why you can expect to see more businesses embrace social missions in 2019

As 2019 opens, the world faces many of the same troubles that plagued us last year and the year before that and the year before that. To help chip away at systemic problems like racial discrimination or global poverty, some entrepreneurs and private sector corporations are leveraging their strengths toward affecting change.

That doesn’t mean corporate intervention in social causes has been universally cheered. Many remain skeptical of large companies’ motives in adopting a philanthropic mission, whether it be baked into the business model or simply an advertising campaign.

And for those companies, taking a stance on social issues can be a risky, if calculated move.

Most recently, Gillette made headlines for an advertisement touting values of the #MeToo movement, and encouraging men to be “the best” they can be. Some praised the commercial for providing a positive model for masculinity in a world still rife with sexism, but others criticized the company for oversimplifying a complex issue.

Before Gillette’s ad campaign, Dick’s Sporting Goods dropped assault-style rifles and started advocating for gun control after the shooting at Stoneman Douglas High School, and Nike featured former NFL quarterback Colin Kaepernick in ads that supported the player’s on-field protests against institutional racism.

While methods and motivations can vary greatly, businesses that go this route share a common tenet: Working for social betterment is probably a good investment — financial or otherwise.

Here are some of the takeaways of the trends we saw in 2018, and why we’re likely to see more of them in the coming year.

1. Younger workers care more than ever before about the social mission of businesses

Across the board, companies are starting to invest more money and resources toward social mission, according to an annual report from Deloitte. This is particularly true of companies hoping to attract younger talent; the same report noted that 86 percent of millennials think business success should be measured by more than just financial performance.

The result? More organizations, no matter their business structure, are working to address societal problems in some way.

In 2017, LinkedIn expanded a program to support refugees seeking to achieve economic self-sufficiency in the U.S. And this past year, Pepsi, Procter & Gamble, and other large corporations announced a joint venture to reduce plastic waste in the world’s oceans.

For businesses, it’s important to stay relevant, said Erica Volini, who co-authored the Deloitte report. “Being silent today, it doesn’t work. Because being silent is being viewed as being apathetic. That’s not acceptable from employees, and that’s what they’re craving.”

Large, profitable companies have more resources to devote to tackling major social issues, but Volini said she expects small and mid-sized companies to take on social issues as a way to attract and retain talent, as well.

This doesn’t mean that all young people are looking to private ventures to drive social change. In order for true systemic change to occur, governments need to have a hand in these initiatives, argue both Jason Spicer of University of Toronto and Tamara Kay of University of Notre Dame.

“Thirty to 40 years ago, social enterprise organizations defined themselves in opposition to the government,” said Kay. Now, she said, social entrepreneurs are “realizing they can’t get to scale in a way that solves systemic issues without the government.”

Following the Democratic wave in the 2018 election, Spicer said he expects this year to see a “rising generation of social movements and activists” call for stronger government cooperation in solving social issues. Newly elected Rep. Alexandria Ocasio-Cortez, D-N.Y., for example, has led the charge in advocating for a “New Green Deal” that would transition the U.S. to 100 percent clean energy within the next 10 years with the help of a federal jobs program and significant public investment in the environment.

While it’s unlikely to be passed by the current divided Congress or championed by President Donald Trump, the plan has earned attention from an upcoming generation eager to see the government play a stronger role in tackling issues that affect them such as climate change and student debt.

2. Labs and incubators are sprouting up to help launch social entrepreneurs

As social entrepreneurship grows, many ventures are getting their start with intermediary groups that help such businesses get off the ground.

One such example is the Massachusetts Institute of Technology’s D-Lab, which provides practical resources to social entrepreneurs, many of whom are working to combat poverty abroad. D-Lab students receive assistance with designing business plans and raising funding for their initiatives. The lab also sponsors field experiences so that these entrepreneurs can actually become familiar with the areas they’re seeking to help, if they’re not originally from these countries.

One successful venture to come out of MIT’s D-Lab was Moringaconnect. Its founders, Kwami Williams and Emily Cunningham, started the organization with the goal of helping small-scale farmers produce and sell products made from the moringa tree on a global market.

Williams, who is Ghanaian, studied aerospace engineering at MIT, but neither he nor Cunningham had run a business before. By working with D-Lab, they were able to travel to Ghana to speak with farmers and buyers on the ground about sourcing and selling products before starting their company. Elliot Avila, founder of Imara Tech, took a class with the D-Lab in college, and learned how to market a farm tool he designed while in Tanzania.

Other examples of organizations that work to help social entrepreneurs get their businesses off the ground include Ashoka and Halcyon Incubator.

“When we take the approach of sending people to [developing] countries, they don’t know the regulatory environment,” said Nardia Haigh, a management professor at University of Massachusetts Boston who has studied social enterprise extensively. She said that about 50 percent of such organizations end up changing their regulatory structure due to legal issues.

“If they don’t focus on that in the beginning, it’s going to set them up for failure,” she said.

While intermediaries provide some valuable guidance to social entrepreneurs, plenty of issues remain within the field. Ewald Kibler, an assistant professor of entrepreneurship at the Aalto University School of Business in Finland, would like to see these intermediaries do a better job of addressing burnout among social entrepreneurs this coming year.

“It’s a myth in our society that social enterprise companies are key to making our world a better place,” said Kibler, who added that when these entrepreneurs aim to tackle major systemic issues without significant support from funders and consultants, they often take on more than they can handle. Research that Kibler worked on for a study recently published in the Harvard Business Review found that employees of small social enterprises often experience stress and poor sleep when trying to achieve both commercial goals and positive change.

Kibler said that intermediaries often focus too much on helping social entrepreneurs develop a business pitch that outlines “how they can help others and save the world,” but overlook the importance of well-being within the company. This year, he’d like to see “social good” companies “focus on helping their own employees as well as their business.”

3. Private ventures with a social mission are trying to improve how they measure impact

Despite the growing number of ventures, socially driven businesses still struggle to prove they’re actually affecting social change, rather than just working to turn a profit.

The pressure for companies to quantify their success partly comes from funders, who often offer incentives based on entrepreneurs’ ability to prove their product or service is changing lives — or the environment — for the better.

“It’s hard to demonstrate that,” said Mary Kay Gugerty, a public policy professor at the University of Washington. “That’s not something businesses are really set up to do.”

Gugerty, who co-authored a book on this problem called “The Goldilocks Challenge,” said she encourages social entrepreneurs to be careful about the kind of claims they make. Rather than report that they gave 10,000 loans that transformed people’s lives, for example, she said they should focus on customer surveys that ask these people how their products worked for them.

Haigh, the UMass professor, said she’d like to see companies adopt more rigorous techniques to highlight not only successes but also failures, “to get a much better understanding of how these enterprises are affecting lives of people who are these beneficiaries.”

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