Global to Local: Measuring Impact
By Lizzie Bildner
These days, corporate social responsibility (CSR) is merely a table-stake for playing the business game. Recently, companies and governments have made enormous strides to rethink models of business and investment that prioritize social impact alongside profit making. As William D. Eggers and Paul MacMillian note, we’re ushering in a new economy that has “emerged at the borderlands where traditional sectors overlap.” The “solution economy,” they note, values social outcomes such as data, reputation, and social impact. It’s this third outcome that I’d like to focus on.
Because of scale companies such as Warby Parker, corporations such as American Express, and international governments can measure and create significant cost saving and humanitarian value among causes as diverse as empowerment, sustainability and recidivism. What we miss in the noise these Goliaths make, however, is the impact generated by millions of small-to-medium sized businesses (SMBs), that takes place on a much smaller scale.
As the founder of the nonprofit, Sharitive, I’ve spent the past year exploring small business giving and how removing inefficiencies and increasing community engagement can improve both charitable and business value. Through Sharitive’s pilot operations, we discovered that most small businesses are inherently charitable: 75 percent of SMBs already support their communities, through in kind or financial gifts; on average SMBs give six percent of profits as compared to large corporations that give one percent of pre-tax profits.
From these facts, it’s clear that local business owners are invested in the community in which they live and work. But, the question remains, how do we measure the social impact of local in-kind gifts? How do we frame the value of a community of engaged residents, businesses, and municipal leaders? Sharitive is looking at not only these questions, but also at how proper communication can spread engagement and ownership over local social issues. As the Columbia Business School Social Enterprise Conference on October 4 approaches, I challenge us all to think small. Collectively, how can we apply CSR mechanisms and quantitative metrics that work on the international level to the neighborhood scale? In our minds at Sharitive, we’re just at the starting point.