Sustainability is increasingly at the heart of business. There is a wide acceptance that commercial organisations must have purpose beyond simple profit; that there is also a need to strengthen society and protect the planet.
Many businesses do, of course, contribute to the wider social good, supporting social enterprises, making charitable donations or searching for more sustainable ways of operating. But activities designed to have a positive social impact are generally funded out of profits. And when profits are squeezed, for instance because of unexpected events such as the pandemic, these activities are also squeezed.
In an ideal world, there would be ways of delivering business growth while at the same time increasing social good. That might sound impossible. But it isn’t. And a social enterprise called Givewith is leading the way in making this happen.
Unlocking global abundance
Social value economics is the framework that powers Givewith, proving that social good can be an integral part of economic activity. And the value of economic transactions around the world is huge: roughly $97 trillion according to research by the Yale Initiative on Sustainable Finance. Givewith helps companies create a real, demonstrable impact on society at the point of their transactions, which brings concrete, bottom-line business advantages to both the supplier and buyer involved.
It’s a simple, but truly innovative, concept. And it works because social good is funded at the point of the transaction, which is more profitable and more efficient than trying to accomplish the same goals with post-transaction profits.
In Givewith’s model, both parties to a transaction – the seller and the buyer – derive additional business value from an activity that has a positive impact on the planet.
The beauty of shared value is that both the buyer and the seller involved in the transaction can generate business value by reporting the social impact to employees, consumers, investors, and business partners. “The act of leveraging the transaction can actually transform social impact from a cost centre into a revenue generator,” says Givewith founder and CEO Paul Polizzotto notes.
How can buyers benefit from transactions that contain a social value element, while also maintaining the best price and terms? The truth is that they can do so in several ways.
The business value is more than just a boost to brand reputation, as valuable as this can be. Givewith helps companies share the impact with key stakeholders – companies can gain value in the form of greater consumer loyalty, more effective employee recruitment and retention, increased employee productivity, improved innovation, and positive environmental, social and governance (ESG) scores.
In fact, research shows using Givewith can uplift employee engagement by up to 9 per cent, and employee retention by up to 5 per cent. Importantly, social impact can also influence investment decisions. Environment, social and governance (ESG) ratings are important for many investors and including social impact as part of its transactions strengthens an organisation’s ESG ratings. This in turn affects share price as well as the ability to raise funds at favorable rates.
In addition, these transactions can uplift the organisation’s net promoter scores by as much as 10 per cent, having a direct impact on its sales. In effect, buyers that work with Givewith can obtain all these benefits, without compromising on the best price and terms.
The seller also benefits by using social impact as unique sales tool. Traditionally, companies use marketing, advertising and public relations tactics to generate awareness about the virtues of their product or solution. But this client acquisition approach is costly and inefficient, considering companies spend 25 per cent of their revenue on selling, general and administrative (SG&A), the majority of which is related to selling, commissions, advertising, promotions and travel.
In contrast, using social impact as a sales incentive through Givewith can be 13 times more effective than other customer acquisition tools, according to research.
Sellers can increase their revenues by up to 7 per cent when using social impact as a sales differentiator. The bottom line is stronger too: a 2 per cent increase in sales margins can be achieved because of the reduced discounting on deals and effective redeployment from underperforming client acquisition budgets.
Positive social impact from buying and selling
Givewith’s objective is quite simple. It is combating the most pressing issues facing the planet. And the way it achieves this is simple too.
Givewith uses a variety of sources – from streaming real-time data and best-in-class third-party data sources to proprietary company research and nonprofit data. The Givewith platform also accounts for research into what employees and consumers care about, the standards adopted by the company, its ESG ratings, and other critical data, to identify the social issues a seller’s prospective customers can benefit the most from.
The impact varies depending on the organisation – from climate change to education to human rights. By identifying a prospective customer’s favourite causes, an organisation can identify the social impact incentives that will be most effective for the seller to use.
The organisation can then decide which social impact body would be best suited to delivering this incentive. To enable this, Givewith has developed a large network of organisations that are addressing environmental and social issues: social enterprises, NGOs, charities and nonprofit organisations.
When the sale is agreed, the social impact element is monitored, measured and validated by Givewith. The degree of social good is reported to key standard setters, and both seller and buyer receive storytelling materials (videos, photographs, research) and reporting assets that they can share with stakeholders, including investors, employees and customers, generating additional value from the transaction for both sides involved.
Case study: IBM and BCG
There are many transactions that prove the value of Givewith’s model. One is IBM’s sale of its Hybrid Cloud Platform to Boston Consulting Group (BCG).
Using its database of organisations that deliver social impact, Givewith identified Indigo Ag, an agriculture technology company that works with farmers to store carbon by changing farming techniques, as the most suitable partner for BCG.
IBM was then able to offer the carbon credits, via Givewith partner Indigo Ag, to BCG as a sales incentive. This was successful, and IBM’s Hybrid Cloud Platform was procured. As a result, BCG got a little closer to its net zero carbon target and the world became a little more sustainable.
Change through transactions
The Givewith model turns selling and buying into an engine for positive change and has led to more than $100 million being directed to social impact initiatives that have benefited 60 million people. It brings entirely new funding to social issues. Instead of competing with charitable donations and philanthropy, Givewith’s model takes the funding needed for social change out of business transactions – money that would otherwise be spent on less effective sales incentives.
It’s time to change the way business and society interact. Integrating social impact into the sales cycle is a more efficient, profitable, and sustainable way to improve businesses and the state of the world.