Langhorst Carla - The giveback economy social responsibility practices for business and nonprofit

The world is changing, for the better.

For thousands of years people have had to focus primarily on being self-serving for survival. What separates humans from other animals is the ability to choose the others best interests over their own. We are able to resist our natural instincts.

Throughout the years, institutions have been created to help those in need. In the Middle Ages, faith organizations took on this role, with religious orders looking after everything from orphanages and hospitals, to feeding the poor. Along with faith organizations, in the late 1800s and early 1900s, large institutional charities emerged including The Salvation Army, The Red Cross, and The United Way. In many ways, the entire nonprofit sector emerged during that period.

Recently, though, this ethos has permeated society. The number of nonprofits that have incorporated in the last few decades has skyrocketed and continues to grow. This trend is expected to continue as the psychographics of people today has changed.

People want to make a difference. They want their lives to be meaningful. The new way to do this is to support a social cause.

Millennials are a huge part of this. The New York Times identified that millennials are more interested in making a difference, not just making money, and working for organizations that demonstrate community giveback strategies. Many are actively choosing employment within the nonprofit sector rather than a higher salary in the private sector (More College Graduates Take Public Service Jobs, The New York Times, March 1, 2011). As millennials continue to emerge as the generation with the largest consumer dollars and take over the workforce, companies are seeing this as essential in terms of strategies in the giveback economy.

This is the emergence of true social justice rather than charity. People and organizations recognize the value and the relationship of giving versus what they get in return. Both sides are important for the giveback economy to work. Just giving or just receiving is not sustainable.

At the same time, we are seeing that the old paradigms of profit, profit, profit are no longer working. A giving back social responsibility strategy is becoming a necessity.

With the ethos of society changing, there is a trend that people dont want to just give their money when making a difference in the world, they want to be part of the change. A whole generation of youth wants to spend summers overseas helping to build schools in a developing country. People want to know more about how their donations are being used or are considering how to make an in-kind donation.

Volunteering is part of the high-school curriculum in many places. Beyond that, volunteering is considered an important thing to do during postsecondary education and even after graduation to improve ones rsum.

People are, however, not giving as much when it comes to money. Historically, giving 10 percent of ones income was a societal norm. It was ingrained in people to give during the weekly church service, or it was something that the neighbors would talk about. With the booming economy and the growing middle class during the 1900s, this was something that was achievable financially for the majority and it was driven through social pressures.

Today it is increasingly difficult for people to make the income necessary to live the middle class lifestyle, so there are and will continue to be a decreasing number of people who can afford to give 10 percent of their income to help others and an increasing number of people who need support.

Given the number of areas across North America which are not considered affordable, such as San Francisco, New York City, California, Vancouver, and Toronto, fewer people can afford to give money. The societal norms of giving are simply no longer normal.

Maybe part of the reason people are giving less money is that there are simply too many nonprofits using direct mail, and telemarketers that irritate consumers.

A social innovator with an idea can simply launch. There often might be a similar idea that is done in another part of the country, or even in a neighboring municipality, but there isnt a driving need to identify this in advance.

Why isnt the social innovator pausing to join or help expand an existing initiative? Most social innovators that launch an initiative are doing it for a personal reason, they are extremely passionate about it, and it is tied to their core values. They believe in it so much that they want to take personal ownership over it. When they do their research and see a gap in a single marketplace, it is natural to simply launch their own organization. They might see that other organizations are doing something about the cause, but it might be difficult to partner with an existing organization due to the work in getting buy-in or even the openness to work together. Rather than attempting to jump through hoops working with an existing organization, they launch.

Government social services no longer necessarily need to be run by a government organization or a nonprofit, and for-profits are entering the space and being awarded contracts to perform social services in a more cost-efficient manner.

For decades, for-profits have optimized their operations and minimized their costs, which has made them more cost effective (even when delivering a social service). Why would a government award a contract to an organization that costs more, is less value-focused, and without collecting taxes when compared to a highly efficient, value- adding, and taxable organization?

Garbage pick-up in many urban centers, a central service, has been outsourced to for-profit organizations that can perform the function at a fraction of the cost of the government itself.

In healthcare where there are nonprofits that provide the basics of care, there are for-profit organizations that provide supplementary services including blood tests or the logistics of managing medical supplies. In the United States, for-profit healthcare providers are often better managed and more efficient than their nonprofit counterparts.

As time goes by, more organizations are invited to provide social impact.

With all these changing paradigms, it becomes obvious that there is a need for something different. And along comes the emergence and increasing need for social innovation and social enterprise.