Ten or even five years ago “impact” was seen as its own industry. Few people had heard of impact investing, and words like “purpose”, “impact”, and “social enterprise” were nearly synonymous with non-profits. Today, however, the idea that a for-profit organization can also change the world for the better is becoming part of the mainstream conversation. There are now bellwether examples in all industries, at all stages, and in all geographies. Impact is everywhere. Why? Well one reason, as Canada’s Prime Minister Justin Trudeau might say, is “Because it’s 2016.”
Impact is accelerating at an unprecedented pace. We’ve quickly transitioned from viewing impact as a sector, towards an impact economy where impact is ingrained in every sector. Whether it’s food, footwear, real estate, or athletics, the business of impact has pervaded each industry and found a ravenous market. People and organizations care more now about changing the world than they ever have before.
“73% of young professionals say they want a job that allows them to make a direct positive impact on the local community” says Keith Ippel, CEO of Spring University. “Companies need to focus on positive outcomes to compete for the best talent. Combine this with the 70% of young professionals who are seeking to start their own business in the next 5-10 years and you have an unstoppable movement as this generation begins to drive mainstream business.”
A major driver of this movement is the millennial consumer. Millennials are now 2 billion strong and have a buying power of 2.45 trillion dollars as of 2015; they are willing to put their money and their time where their values lie. This creates a double call to action for companies to capitalize on both buying power and ensuring that their values are aligned with the new workforce (60% of millennials state that part of the reason they chose to work for their current employers is the company’s “sense of purpose”). But what about money saved and invested? Millennials are increasingly inclined to put their money where it will create an impact, causing industry leaders like Morgan Stanley, Goldman Sachs Group Inc., BlackRock, and other major Wall Street firms to take note and develop their own impact investing opportunities for clients.
There is also been a change in the psychology when viewing impact goals such as sustainability, socio-economic assistance, or charity; what was once strictly a cost is being recognized as a long term benefit. Companies like TOMS Shoes, Elon Musk’s SolarCity, and Everlane have proven that doing good and being “for-profit” do not have to be mutually exclusive. Furthermore, long term studies have shown that impact companies that have gone public, dubbed as practicing “Conscious Capitalism” by Raj Sisodia, systematically do 10X better than their industry counterparts.
Specific hubs have already begun to emerge as major players including cities in the Netherlands, Sweden, and Canada where the trifecta of government, education, and commerce is converging on support for an impact-heavy economy. Vancouver is an excellent example of a small but impact-dedicated city in which a great deal of impact businesses are both starting up and flourishing. Successful reference companies and entrepreneurs such as Ryan Holmes of Hootsuite, Denise Taschereau of Fairware, and Ryan Spong of Foodee make a compelling argument in support of for-profits who are on a mission to make a difference to more than just a bottom line.
As for funding, investors have become more educated about the opportunities that lie in social impact and are learning that along with a satisfaction of personal values, investing in this part of the economy also provides a satisfaction of business goals. Again, a slew of impact-specific investment organizations are using Vancouver as a major conduit. These include Renewal Funds, Varshney Capital, Pique Ventures, and Toniic Network, the world’s largest impact angel network with investors in over 26 countries.
Outside of Vancouver, traditional investing firms, consulting agencies and even large investment banks are adding impact arms – Bain Capital, Zurich, J.P. Morgan Chase & Co., and AXA are all good examples. Additionally, as crowdfunding and now equity crowdfunding become more established, everyday consumers are now capable of putting their money directly where their values are. This is leading to an entirely new audience and approach to fundraising for socially conscious entrepreneurs.
There are also a growing number of resource hubs dedicated to supporting this space. These range from impact-only coworking spaces like the HiVE and Groundswell, to social enterprise accelerators like UBC’s Sauder S3i and SFU’s RADIUS, through to Spring U, Canada’s first international startup school and incubator for aspiring impact entrepreneurs – it now runs in 30 cities on five continents with programs spanning idea validation, launch, growth, and funding.
As Keith Ippel also notes: “With tools and resources ranging from SocialEdge.org, Unreasonable Institute, and B Corp, it has never been easier to get started. When you see the likes of Stanford and Harvard creating content, resources, and events on impact, you know this is the space where innovation, and where the big changes, are happening.”
The Inevitability of Impact Strategy
In the next 3-5 years, each industry will see more entrepreneurs doing good deeds while doing good business. The traditional concern of “purpose over profit” will be balanced by an increasing number of proof points.
Millennials are the purpose generation while baby boomers are searching for ways to give back and express their values through their careers, their money, and their time; 8 trillion dollars and hours worth of it actually. As millennials continue to grow as the dominant workforce generation, and retiring boomers vote and participate with their wealth, businesses and entrepreneurs will need to find a way to make impact a core part of their businesses model and brand value. This will be one of only a few ways to stay relevant and financially robust over the long run.
Eventually, if all continues in the current direction and awareness grows along with support, “impact entrepreneurship” will become the new entrepreneurship. And business for social impact? Well, that will just be business as usual.
Interested in becoming an impact entrepreneur or weaving impact into your growing business? Spring U has worked with over 300 alumni, offers a global mentor network of over 100 amazing change makers, and delivers courses in 30+ cities. Apply now to a Spring U cohort near you or help us bring Spring U to your area: Learn More
Jennifer Chin is the Community Manager at Spring U. She is passionate about helping new entrepreneurs grow their impact and get passionate about what they can do to make the world a little better. To chat with Jen about starting up, impact, or partnering up email her directly or apply now to Spring U.