In Part 1 of this series, Hunsicker co-founder, Becca Self, shares her thoughts on why making real money is required to make real change. Part 2 on why Profits Needs Impact can be found here.

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“How did you decide to turn down the corporate appeal and follow your heart instead?”

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I’ve lost track of the number of times I’ve been asked a variation of this question from soon-to-be graduates, interns, and new acquaintances. There’s been a dissertation’s worth written on finding your career path and making comparison charts at forks in the road, and I’ve indulged in my fair share of lamentation about the injustice of the accepted two-tier system. You either prioritize “doing good” or “making money.” Thus, the two worlds operate in different silos, each functioning with their own established resources, approaches, and grievances. By and large, the nonprofit sector is expected to tidy up gaps that have been left behind or deemed unmarketable to standard capitalist ventures. Enterprise and ingenuity flow to the promise of dollars and virality.  

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But this is a false dichotomy. A two-tiered system doesn’t have to be the default. As a society, we don’t have to rely on generosity to address our fundamental needs. In fact, we do ourselves a disservice by relegating the protracted problems in life to charities and government alone. This duality siphons off the most creative minds to startups built for quick, infinitely-scaling convenience. 

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A two-tiered system doesn’t have to be the default.

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More dangerously, it implies that the society’s basic needs can’t be improved with capitalistic tools, forcing nonprofits to be stuck in a never-ending hand-to-mouth loop. We’ve taken the fundamentals that affect the most people - shelter, health & wellness, financial security, career attainment - and walled them off from the most powerful motivator humans have created - money. Think about that - any MBA student would recognize this as an absurdity. Are we really concluding that problems that impact too many people are not worth our entrepreneurial energy?

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We’ve taken the fundamentals that affect the most people - shelter, health & wellness, financial security, career attainment - and walled them off from the most powerful motivator humans have created - money.

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Like it or not, money is how our society has collectively assigned value. We pay people to do a job. We use our money to procure things we need and want. The inverse also then holds true - things that don’t matter are not monetized.  If compensation for that work is minimal, it won’t attract top talent, and it also sends the message that the work isn’t important, or at the very least, prioritized. 

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Similarly, if an entity doesn’t have a dependable revenue source of its own, like most of those in the nonprofit sector, operations can be forced to run on an aspirational year-to-year budget, reliant on the generosity of others and sheer good fortune of grant awards. This indebted balance sheet doesn’t breed confidence. Worse still, the lack of control over financial security limits the field of vision, forcing these groups to work from a defensive stance. Their work becomes reactive to omnipresent problems, rather than proactive. They’re left to put out fires with a foreboding sense that the water might be turned off tomorrow. 

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Put together, these drawbacks make a compelling case for why impact could be made more sustainably and substantially when the true market (and its measuring stick, profit) is put back into the equation for solving certain societal problems. The product or service offered must have a large appeal and a broad customer base to support it. If not, it needs either to be altered or discontinued. Financial metrics can serve as a more accurate data point to see if a solution is palatable (gaining market sharing, making money, etc.) The immediacy of these metrics and fast-paced nature of start-up mentality also encourages out-of-the box problem solving, unlike the glacial timeframe of generational community improvement. 

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Furthermore, success with returns more fully addresses needs over the long run and can also leverage entirely new (and deep) pools of impact investor dollars. The rules of capitalism are so entrenched in our society, regardless of socioeconomic status, that we are expending energy resisting this natural inertia. Benefits, both financial and social, will be able to flow more freely if we break through that dam and apply these same terms of engagement to societal good. 

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There is dignity in the exchange itself.

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But wait, there’s more. Beyond the economic argument, an entrepreneurial approach is needed on the most humanistic level. Companies function through sales, whereby customers place value on a product or service and commit some amount of their resources to acquire it. Not only is this a testament to the shared value of that good, but both parties are in agreement with the transaction. It is a two-sided relationship where each player is on approximately equal footing. 

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Sadly, this is rarely the case with social services, where one-sided charitable handouts are frequently distributed by those who have the power. That very structure creates a delineation between the haves and the have-nots. It breeds a culture where worthiness must be determined and in lieu of real currency exchanging hands, creates lopsided expectations for gratitude in return. Not surprisingly, demanding thankfulness is rarely successful and it creates feelings of resentment on all sides. On the contrary, there is dignity in the exchange itself. And when your customer-base is often not respected or knows that they have little with which to procure for themselves and their loved ones, factoring dignity back into the equation cannot be undervalued. 

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If we want to build a future to thrive in, not just survive in, we must leverage all of the available resources. Simply put, we cannot afford to keep profit out of societal good.

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Part 2 on why Profits Needs Impact can be found here.