A New Narrative of Business and Philanthropy

A generation ago, the nonprofit community was the main place to find people focused on transforming the world for the better. It used to be that if you wanted to make money you’d start a business and if you wanted to make a dent in global poverty, transform a local community, or care for widows and orphans, you needed a charity. It's an entirely too common, and damaging, false dichotomy. Too many business leaders have assumed that their chief contribution to the world was through the money they gave away. 

That's simply not true enough. It's time for a more complete story.

This thinking is illustrated well by a conversation I had with my friend last week. I'll paraphrase: 

"I wish my business were making more money; I feel terrible that I don't have anything to give away," John explained over lunch last week. He went on to talk about how he had hoped to make such a difference in the world by creating a business that could provide a perpetual funding stream for the charities he and his wife love. But as it stands, his business hasn't yet reached the financial success he expected and he worried he wasn't making an impact.

"How many jobs has your business added in your community in the last 9 months?" I asked.

"15 people full-time and 20 part-time."

"How many regular customers do you know by name? And where were they spending their time before?"

"Oh, I don't know. Probably about 100 of 'em I know by name and dozens more I recognize as regulars," John explained, his eyes lighting up. "These guys used to hit the bar after work. Now they come here and bring their families too."

"Are you sure you're not having an impact?" I asked.

My friend was missing the opportunity to celebrate the work God is doing through his business in creating jobs and bringing families together.

Thankfully this false dichotomy between doing good and making money is dying out. Today, those two traditional classifications of business and ministry constitute the ends of an increasingly-crowded continuum.

continuum 3-3-16.png

On the left, the focus of the enterprise is mainly (or solely) financial profit without intentional affects on employees, vendors, the community, the environment, or other stakeholders. Similarly, on the right, the focus is mainly (or solely) on the mission or the cause that the organization seeks to address, e.g., providing clean water or ending sex trafficking. We increasingly see large corporations and small startups shift away from a singular focus on shareholder value to include goals for positive and measurable social, environmental, or Kingdom impact. 

Somewhere in the middle is the sweet spot for impact investing, found at the intersection of maximum risk-adjusted financial return and measurable social/spiritual impact. Accordingly, impact can be found through investments in early-stage technology companies, agriculture-focused economic development venture funds, US-based private equity firms, social impact bonds, international loan funds, or even loans directly to individual charities.

The goal of Impact Foundation is to be part of a big shift in how we think about the roles of business and philanthropy. If you're eager for a new narrative, join us as we search for ways to tell a better story.

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Toward a Practical Theology of Capital