Browse a recent list of fastest-growing companies in America and you’ll notice a pattern. Yes, there are plenty of fancy AI and tech firms, but there is also a growing force not seen so consistently before in the private sector: businesses that give back.
We’re not talking about nonprofits, here. Nor are we referring to massive corporations that make the occasional donation for the PR boost or to clean up their own mess. We’re talking about businesses that make “giving back” a key part of their existence– one of the core reasons they operate. Some (like ourselves at Wholeheart) go so far as to build “giving back” into the business model through various social impact initiatives.
Why would a business choose to reduce profits for the sake of giving back? As it turns out, giving back is good for more than your soul– it’s good for business. When you make a commitment to giving back in business, you attract a multitude of benefits for your brand and your bottom line.
Giving Back gives your business a story
Imagine there’s a service that helps connect homebuyers with real estate agents. Well, you don’t have to imagine– there are tons of them. An business built on this premise would have a hard time competing in today’s oversaturated market.
How about a service that helps first-generation homebuyers connect with inclusive brokers and navigate the real estate market? Boom– inspiring story, awesome impact, successful business.
“Access to homeownership is a dysfunctional part of our society. It is heavily White and heavily wealthy. We realized we had a responsibility to start to solve inequality in housing by removing the obstacles to homeownership, one being that brokers treat everyone as if they knew how to buy a home.”
John Berkowitz, founder of Ojo Labs
Stories help consumers connect with your brand and crave the higher purpose of your product or service. When your business makes giving back a part of its story, it immediately has a story worth telling– and worth supporting.
Giving Back gives people a reason to support your business.
Making money is great, but it doesn’t give people a particularly compelling reason to support your business. Most businesses operate with the sole intent of making money, and most people aren’t particularly enthused to give their money to them.
When you give back through business, you give your customers the ability to give back simply by being your customer. People want to feel good about themselves. If they know that supporting your business has positive reverberations elsewhere, they’ll be more inclined to do business with you.
40% of consumers seek purposeful brands and trust in brands to act in the best interest of society.
Globe Scan
Giving back will inspire people to support your business in other ways, too. Like promoting your business to others through word-of-mouth, referrals, and showing support on social media. All of these actions can greatly extend your reach and drive new business.
Knowing the success of your business will have a positive impact on the community, you’ll find more people going out of their way to help make that happen.
Giving Back helps differentiate you from the competition
Let’s say you’re trying to decide which dog toy to purchase for your pup. You’re comparing two virtually identical plush toys– they’re the same material, aesthetic, and price point.
You notice the tag on one toy states that a portion of profits goes to support the care and adoption of animals in your area. Which toy are you going to buy?
Unless you actively hate animals (shame, shame), you’ll probably buy the one that gives back. That might even be the case if it were $1, $2, or $3 more than the other toy.
91% of Millennials would switch brands to one associated with a cause (compared to 85% U.S. average).
Cone Communications
In a world where consumers have plenty of options for just about everything, it pays to differentiate yourself from the rest. Having an awesome product or service is the foundation for that, but you can hedge your bets by taking it a step further.
Giving back is a sure-fire way to help you stand out in the marketplace, stir up some warm and fuzzy feelings, and ultimately give people a reason to choose you, and not the other option.
Giving Back supports a healthy community that can support business
Businesses need healthy communities in order to survive. A community that is sick, broke, and neglected is heartbreaking, but it’s also economically defunct. When people are scraping by to survive, they won’t be heading out for bougie brunches, $18 cycling classes, or a leisurely day of shopping downtown.
“Business and society have a symbiotic relationship: the long-term viability of the corporation depends upon its responsibility to the society of which it is a part. And the wellbeing of society depends upon profitable and responsible business enterprise.”
Harvard Business School Roundtable 1981
Companies have an ethical duty to invest in the communities around them, but also an economic one.
While the dividends from investing in your community may not be apparent right away, a continual investment over a number of years will doubtlessly lead to a better environment in which to conduct business. Not only will the community be in better financial shape, they’ll also be more likely to look to business leaders as partners and a potential solution (not creator) of their problems.
Giving Back builds positive brand associations
When people think about your brand or business, what do you want coming to mind?
Is it a faceless, soulless entity that wants nothing but the contents of their wallets?
Or is it a cherished and integral part of the community– a wholehearted business that gives back as much as it prospers?
When people walk past your storefront or scroll your website, should they feel inspired and hopeful Or should they feel untrusting, uncertain, or undeserving?
Brand associations happen on many levels, including (if not primarily) the subconscious one. Intended or not, those who encounter your brand will form a brand association that will directly affect how they feel about your business, products, or services.
A brand is the set of expectations, memories, stories, and relationships that, taken together, account for a consumer’s decision to choose one product or service over another.
Seth Godin
Giving back in business is a sure-fire way to create positive brand associations with your audience. They’ll look at your business and see not a soulless entity looking to take-take-take, but a reliable partner that wants to improve the world around them– starting with their customers, of course.
Giving Back provides a higher purpose.
Anyone who’s accomplished even a modicum of success will tell you: the high fades quickly. Each new milestone and goal reached quickly fades, as you recalibrate your focus on the next. When you reach that one, the cycle begins again.
Making enough money to support yourself and your loved ones is an honorable goal. But you may find that once you reach it, the excitement begins to fade. Further success becomes a contest of status and showmanship– look at this car, this new house, this vacation.
“I’m encouraging young people to become social business entrepreneurs and contribute to the world, rather than just making money. Making money is no fun. Contributing to and changing the world is a lot more fun.” – Muhammed Yunus, Nobel Peace Prize winner and founder, Grameen Bank
Muhammed Yunus, Nobel Peace Prize winner and founder, Grameen Bank
When you give back through business, you inherently have a higher purpose. Your success does not only positively benefit you, nor is it even limited to your family and friends. The more you succeed, the more the world succeeds around you.
Maybe there are even specific groups, organizations, or individuals that stand to benefit from your success. That’s one heck of a reason to get out of bed in the morning, and put in that extra few hours some nights.
This higher purpose will motivate your staff, as well as yourself. More and more, people are demanding that the work they do mean something– that it have a positive impact on the world. If you want to attract and retain top talent, pursuing a higher purpose is a great start.
Giving Back is Good for Business
When you give back in business, it tells your customers that you care about more than profits. It gives them a reason to support your business, a meaningful brand story to pass on to friends and family, and positive brand associations around your business.
Giving back also provides a higher purpose in your business, giving you and employees a greater sense of satisfaction and drive to make the business succeed.
We challenge you to think of one way you could give back in business over the next three months.
Could you make a donation to an important cause or individual in your community?
Could you provide an in-kind donation like pro bono work or volunteer time?
Could you partner with a local nonprofit, charity, or team up with other business owners?
There are so many ways to give back through business. Pick one and make it happen. It might just be the best thing you ever do for your business.