Blurring the Lines between Charity, Entrepreneurship

In the past, defining the difference between charity and entrepreneurship was relatively easy.

Charities focus on giving back to their communities, while entrepreneurs focus on making money.

But the lines between these seemingly opposed industries have begun to blur. More and more corporations have stepped up their philanthropic giving and participation in social justice. And more nonprofits and charities are embracing the branding and product placement traditionally offered by profit-focused businesses.

Just recently in the U.S., as several states contemplated restrictive new voting laws, many of the biggest companies in the world — Google, Amazon, GM, and Starbucks, among hundreds of other businesses — joined a petition telling Congress they opposed any “discriminatory legislation” that would make voting more difficult.

The changes don’t end at political participation, either.

Charity and the e-Commerce industry have become intertwined for many companies, and it’s especially true when those businesses have a customer base that’s socially conscious.

That’s often the case with brands focused on spirituality and wellness, but it’s also generally true for the younger generations, the majority of which say they want the brands they support to make a positive difference in the world.

In a somewhat novel approach called “cause marketing,” brands are weaving charity into nearly every part of their business model, using “causes” to drive analytics, acquisition, and targeting.

This approach often involves donation options as customers finish their purchase on an e-Commerce site, making them feel good about their purchase and the company they bought it from. It also expands the reach of the company, from positive press and word-of-mouth, as well as data-mining that improves the companies’ ability at targeted marketing.

Another example of these blurred lines is the “for-profit social enterprise.”

As described in a Forbes column, a traditional social enterprise doesn’t focus on capital returns, but rather social equity and social benefits.

For-profit social enterprises are built on traditional business principles and profitability is always a vital goal. As stated in the column: “Everyone served by the organization is a paying customer.”

By paying a small fee, social entrepreneurs say that customers receive more equal footing in with the company — something often missing in traditional charity models.

Anant Kumar, the founder of LifeSpring, a maternity hospital that provides India’s poorest women with health care, considers himself a social entrepreneur.

“Think about a charity,” Kumar said in the Forbes article. “For the recipient, you’re really doing them a favor. You are the donor. They are the recipient. So, you’re not on the same level. When you’re not on the same level, there’s an accountability gap.”

Kumar isn’t the only person embracing this new trend of “social entrepreneurs.”

WE Charity, one of the biggest nonprofits in Canada, was founded by two entrepreneurs, brothers Marc and Craig Kielburger.

Both Marc and Craig Kielburger have advanced business degrees, best-selling books about the relationship between charity and economics, and frequently give inspirational speeches to the thousands of people involved in their organization.

The brothers brought that entrepreneurial spirit to their charity, initially called Free the Children, then later renamed as WE Charity.

In their books and keynote addresses to their thousands of followers, the Kielburgers frequently bring up the positive impact that’s possible when socially conscious leaders combine the best ideas of entrepreneurship with the altruism that drives the most successful charities.

“What if purpose is the game-changing differentiator that gives products an edge?” Craig Kielburger said. “Purpose can be the inspiration for a new venture, but it can also be used to retrofit an existing product, all the while providing a tangible social impact that consumers can see.”

Photo by RODNAE Productions from Pexels