Using an Impact Lens: A small yet meaningful way for your business to be a force for good
Photo Credit: Chris Titze Imaging
For small- and mid-sized businesses, instituting some sort of Corporate Social Responsibility program can often feel unrealistic. International brands like Patagonia and Ben & Jerry's have the high-profile founders and big dollars behind their goals to change the world through their companies, donating millions of dollars in profits to causes. Smaller companies operate with fewer employees and (sometimes) smaller margins than these mega brands. For entrepreneurs especially, with their heads down growing their companies, thinking about how to make a positive impact with their companies might take a back seat to urgent initiatives like capturing market share or raising capital to expand.
Good news. Getting started with making a positive impact with your company doesn't have to be complicated or time-consuming. Integrating positive impact into your existing business operations can create big impact on your community. Whether you have a consumer good, a service, or a business of not-for-profit where there's social impact already baked into your product, creating an impact lens can make sense.
What is an impact lens? An impact lens is the practice of asking a few questions about the impact of a business decision to help you make a good decision. It’s up to you what type of lens or lenses you’d like to start with: sustainability, social impact, local economy, or others. For instance, when choosing a vendor you could ask is the business locally-owned, making it more likely my economic impact remains in my community? Is the business owned or operated by women or BIPOC leaders? Do the people who work at this company earn a decent wage? Do I have any other information about the business’s reputation or practices?
Your business is already making a positive impact by contributing to the economy and creating jobs. Being conscientious about your interaction with other businesses can increase that impact. An impact lens is a meaningful yet often overlooked way for your business be a force for good. Here are three areas in your business where you are making decisions all of the time and could easily apply an impact lens.
Vendors or Suppliers. No matter the type of business you manage, you work with vendors. These may be the manufacturer for your product or vendors to procure wholesale goods. Small businesses may outsource professional services and hire businesses to support tax, HR, accounting, legal, marketing, PR, or IT. By choosing companies run by women, Black business owners, or other people of color, you can support businesses that have traditionally been under-invested in. Choosing these businesses helps create wealth in communities that consistently receive less investment capital. In Colorado, the Center for Community Wealth Building has created a fantastic list of women, BIPOC, and refugee- and immigrant-led businesses. And ShopBIPOC is a large and still growing marketplace to shop BIPOC businesses in Colorado.
2. Banking. Where is your money spending the night? In addition to your business checking account, you may have business credit cards, a line of credit, or an investment sweep account for your business. By using a local bank or community bank you can make an impact on your community because your deposits are loaned out to local customers. Additionally, using a nonprofit financial institution like a CDFI (Community Development Finance Institution) for business loans, or a credit union for your personal savings create a larger impact. In these organizations, the funds are loaned to businesses or individuals that may not have access to bank loans. Plus, all of the profits from the company are reinvested in the organization instead of lining the pockets of shareholders. The Opportunity Finance Network’s CDFI locator is a resource for lenders that serve your area.
3. Referral Partnerships. Do you have formal referral partnerships with other businesses or consultants where you exchange referral fees for new clients? Or informal referral networks where you recommend folks for professional services? Look at your referral partner list. Does it include women-led businesses? Does it include BIPOC-owned companies? Be intentional about sending business to local companies or communities that have traditionally been under-invested in. I love referring folks to the Blog for the Sistahbiz Global Network, a resource for Black women entrepreneurs. The blog often provides lists of top Black women professional service providers – to call on for your own needs or to refer others to.
Using an impact lens is a small but powerful step in integrating your values into your business. Research shows that consumers are increasingly interested in working with companies that have stated social and environmental principles aligned with their brand. A Cone Communications study on Gen Z attitudes toward purpose-driven companies found that 90% of Gen Zers think companies should be acting on social and environmental issues and 75% say that when a company takes a stand on an issue, they will research the company to see if it is being honest.
While using an impact lens on your current business operations may seem far from taking a stand on an issue, it may provide you some credibility when and if you decide to voice your business point of view on big issues. By building impact into everyday decision-making, your customers will see that in your business you walk your talk.
This article was originally published in The Pursuit, an online magazine for TARRA