UK: Searching for Social Impact

        According to findings of the Charities Aid Foundation (CAF), UK consumers want businesses to be more open and transparent about their philanthropy.  See today’s Guardian article entitled “New Survey Shows FTSE 100 Companies Have Increased Charitable Giving.”  Over half of the 2,000 British people CAF interviewed commented that they would be more likely to purchase a product if part of its price was donated to charity.  In addition, those aged 18-24 increasingly express a desire to work for businesses that are ethical.  Job seekers within this age range see working for a company that allows one “to give back” to be a major selling point.  

        As a result, UK businesses seeking to have a social impact are taking on more sustainable approaches, are re-thinking their purpose, and are marketing their products in the context of how they help solve social problems.  Klara Kozlov, head of corporate clients at CAF, urges businesses to adopt a “framework for reporting their philanthropy activity and …. measur[ing] and report[ing] the impact of their giving.”  She emphasizes that the public reporting of social impact is essential.  

        The impact investing sector in the US serves as a relevant model for these businesses.  Like the nonprofit sector, the impact investing sector has social impact as goal, but it also has profit earning as an aim.  In other words, it is a growing sector for those consumers and investors who are increasingly making their choices based upon their “personal, social, and environmental values”, and thus demand that businesses have a double bottom line: profit and social impact. In sum, a double bottom line means that a business will both earn a profit for investors and produce a benefit to society or social impact.  (For more on impact investing, see “Impact Investing: The Power of Two Bottom Lines”).  Since impact investors also expect a financial return, the sector has had to bring a level of rigor commensurate with the financial markets to bear upon the measurement of both elements of their return.