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Profit + Purpose: How Social Innovation Is Transforming Business for Good by Kyle Westaway

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Chapter FourFund Through Commitment

Raising funds is one of the most challenging and time-consuming jobs for every founder, whether of a for-profit or non-profit organization. As we saw with the story of Method, this may be true even if a product is gaining substantial sales. As we saw with Charity: Water, the same can be true even if the organization is creating strong impact.

The purely for-profit model presents its own distinctive challenges. As high-profile for-profit purpose-driven companies like Ben & Jerry's, Burt's Bees, Patagonia, Whole Foods, Method, and Warby Parker have reaped such rewards and have proven the concept, there is no question that the concept of social impact investing has gained traction. A growing cadre of investors is looking to put their money into companies that can come through with both a solid financial return on investment (ROI) and a social return on investment (SROI), which is the social and/or environmental impact of the organization. But this in no way means that money is easy to attract, or that satisfying these investors is any less difficult than pleasing those looking primarily for quick returns. In many cases, it may be more difficult due to the added variables that come into play when looking for financial, social, and environmental performance.

When it comes to finding investors for social enterprises, the investor and the social entrepreneur must be in clear agreement about the expected outcomes in terms of profit and purpose. The ...

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