Social entrepreneurship in action: how we balance purpose and profit in our business

Written by
Jannik Kaiser
Written by
Emily Johnston
September 28, 2022

Around 4 years ago we took a fundamental decision for Unity Effect, namely to transition our legal structure from being a non-profit association to a “normal” company. The reasons were manyfold. Most importantly, we felt that we can bring our purpose more to life as a business: offering and selling our services, and charging directly for the value we provide. 

As we saw ourselves as a social enterprise, we wanted to make sure that it’s our purpose and social mission that guide us, and that this commitment is also reflected in both our structural setup and daily work. 

In this article we will share concrete examples of how we fill the term “social enterprise” with life. This includes:

  • Our commitment to steward ownership 
  • What it means to be “for-purpose” in our daily work 
  • Giving back, e.g. through donations and pro bono projects 
  • Enabling personal learning and wellbeing 

Reach out to us if you have any questions around the topics or concrete examples - or would like to share your experiences with us! 

Commitment to steward ownership

One of the most fundamental questions for any social enterprise is how to reflect the commitment towards purpose and the common good in its DNA: the legal company structure. Starting off, we took time to understand the legal “wiggle room” we have to shape our statutes and how we can best structure our ownership rights. 

Up to this point, ownership (meaning: shares of the company) is 100% in our own hands as co-founders. And moving forward, we will explore the best model for us to transition to steward ownership. The so-called “asset lock” will then legally and technically assure that our income and profits are (re)invested into our purpose, and that nobody can extract money for their own personal gain (e.g. from surplus we generate). We are also excited to see a new legal form emerging in Germany for this. 

Check out the work of Purpose Ventures and the Purpose Foundation for more information on steward ownership here.

Being 'for-purpose' 

Our purpose - leading change from the inside out - is at the heart of everything we do. For us, our purpose is not just a few nice words we can put on our website. It shapes the services we offer, the opportunities we say yes and no to, and plays an active role in our strategic and daily decisions. This includes:

Deciding who we work with and which projects we take on

We regularly evaluate that the projects, organisations and partners we engage with align with our purpose and the impact we want to create. 

Putting purpose over short-term financial gains

We seek to create an impact and ask how we can achieve that best through our work. Even if it means saying no to financially viable opportunities. In the past we have offered services where there was demand, yet over time we realised that we weren’t able to achieve the depth of impact we strive for and so we moved away from these activities. Even though financial stability is important to us, and we recognise we are in a privileged position to be selective, our income shouldn’t come at the expense of our purpose.

Our approach to pricing

We offer our day rates as a scale, with different ranges for non-profit and social enterprises versus for-profit organisations. We approach pricing as a dialogue with our clients where we seek to find common ground based on what is fair for both sides.

Collaboration over competition

There are many organisations and networks out there who are working towards the same vision of a just and thriving future for all - they just take a different path to get there. We build partnerships with others working in similar fields so that we can support each other to bring our shared vision to life.

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Giving back

When starting out, we received crucial support from different mentors, and we received scholarships from the Social Impact Lab and the state of North Rhine Westphalia. We are extremely fortunate to have had - and still have - very supportive conditions to develop Unity Effect. And we see it as our shared responsibility to create these conditions for others around the globe as well.

Here are a few examples of how we understand our role and responsibility as part of a global ecosystem. 

We donate 1% of our revenue

We started doing this in 2020, the first year we were profitable as a company. And we’ve decided to take the revenue as reference, and not our surplus, for a couple of reasons. Firstly, it reflects the fact that this is part of our financial DNA. The more we earn, the more we donate. It’s that simple. And secondly, our revenue is more reliable and stable. This might play a bigger role moving forward as we might be able to make longer-term commitments to the organisations and causes we support. 

So once a year (usually towards Christmas) we get together and split the sum (1% of our revenue) by the number of team members. And then everybody gets to select whom to donate to. 

We engage in volunteer and pro-bono projects

When we can, we take part in projects where we are able to provide our knowledge and learnings to communities and changemakers which align with our purpose and vision. A few examples include:

  • We are part of the Social Impact Award Experts4Change pool, through which community members (social entrepreneurs) can reach out to us for specific mentoring.
  • This year we have taken part as a mentor in the Qatar Foundations WISE Emerging Leaders Program, where we are supporting a social entrepreneur from Slam Out Loud India with program design and personal development.
  • We are in the Reflecta Network’s expert pool, where we provide our resources for learning modules and are available for feedback and mentoring.
  • We worked with the Laali Project in India to give input on the design of their leadership program and run a workshop for their fellows.
  • We take up advisory roles for projects and networks, e.g. for Germanwatch or Nexus.   

We offer scholarship places for every public program we offer

Since we started, we have wanted to enable people from different backgrounds to be able to join our personal and leadership development programs. We didn’t want to offer yet another leadership program exclusively for executives with access to a substantial learning budget. We have also sought to balance covering our costs, with ensuring that the price is not the reason that motivated changemakers, entrepreneurs and intrapreneurs from around the world don’t have the opportunity to grow in their work. In 2022 we have awarded part- and fully-funded scholarships worth over €10K. 

We keep our emissions small and compensate for our flights

Much of our work is online, but increasingly involves travelling. We take the train if possible, and we nudge our partners to be aware of emissions in their event planning and consider local partners before travelling ourselves. And in case we take a flight, we compensate for it. Not through offers of airlines, but using this calculator.

We are human beings, not human resources 

For us, social entrepreneurship doesn’t only mean looking externally to create a positive impact, but also includes the conditions we create for ourselves within our company. We know that our most important resources are our own energy and creativity, and that these need to be nurtured intentionally. Here are some of our team wellbeing practices.

Support for personal learning and growth

We set learning goals and encourage each other to take time for intentional learning, as well as providing a training budget for each of us. We also create spaces to share what we learn with colleagues, both as part of regular meetings and dedicated sessions.

Working with the pull principle

We work with pull, not push. That means when there is a project on the table, or a task that needs to be done, we often ask who has ‘pull’ to do it. Of course there are sometimes tasks that no-one is excited about doing, but the more we can draw on our intrinsic motivation, the better for us all. 

Shaping our roles around our strengths and interests

Each of our team members has a role, or set of roles, which has been developed around their skills and interests, as well as based on the needs of the companies, recognising that each of us has unique strengths to contribute.

Team time and connection

As a remote team it’s even more important to find ways to connect. We always start with a check-in when we meet, even if it’s only for a few minutes, to get a sense of where everyone is at. We often start our meetings with a short meditation or some stretching. We also meet regularly for ‘team time’, where we have internal learning sessions, play a game, or simply spend time together.

To go full circle and bring it back to steward ownership: the second principle (after “profits serving purpose”) is internal decision-making and self-governance. The people working for the company have the authority to steer its course. In our case, there simply is no external authority that could try to use us as resources. 

The challenge of fostering wellbeing in a fast-paced setting of course remains. Workload and pressure can be quite high, and we all had our phases in which we were out of balance. This is just another reason why it’s so important to have routines and offers in place that support and regenerate us as human beings.

We are not here to burn out, we are here to light people up. Hopefully for a long time. 

About the author
Co-founder of Unity Effect. Striving to capture the depths and intricacies of social change, and how to shape it. Having a soft spot for complexity science, impact evaluation and cat videos.
About the author
Co-founder of Unity Effect. Endlessly curious about humans being humans. Passionate about authentic leadership and collaborative teamwork. Experimenting with doing things differently.
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