The Credibility Of Profit & Purpose

There is much talk of ‘Mission Driven Businesses’. Debate flows on whether profit and purpose are contradictory or complimentary. For me it is a question of credibility between customers and providers. So, what is credibility?

Simply put, credibility is basically trust and it is subjective so at the mercy of perceptions. Accordingly credibility is set by the net difference between expectations and reality. However, it may be useful to dig down further on what credibility is to gain a better grasp of how to optimise the blend of profit and purpose suitable for your brand.

Credibility is comprised of accountability (the ability of consumers to hold providers responsible) and legitimacy. Fritz Scharpf is best known for distinguishing legitimacy as having two aspects: input and output legitimacy. Input legitimacy is authority based on representation and fairness, usually on the basis that those affected by decisions have a right to have a meaningful part in the decisions made. Output legitimacy reflects that those with most power have more rights in making decision making as they have the most power to commit to decisions or not.

So, how does your brand manage its accountability and its legitimacy? Hopefully these concepts provide useful handles by which to reconsider the blend of profit and purpose for you in fostering greater trust with customers.

 

The National Lottery Community Fund are invested in helping civil society organisations to develop their resilience so that they are in a stronger position to pursue their goals.

One way of developing that strength is to build financial resilience through generating unrestricted income.  Social Investment – the offer of repayable finance for organisations delivering a social purpose, from an investor who is looking for both social and financial return – can help.  It is especially useful for civil society organisations who struggle to access high street loans and, for those who are looking for investors who share their values.

Social investment can also be structured so that it is useful for commissioners and civil society organisations who are working together on early action and innovation around complex social issues; it can help by covering costs until preventative outcomes have been achieved, which in turn release funds – that may otherwise be locked up in acute care services – to repay the social investors for the preventative intervention they have financed.Since the Fund’s work in social investment began in 2010 they have commissioned a number of evaluations and research studies.

These include some in-depth, long-term evaluations which will generate a number of reports between now and 2023. You will find the reports here: https://www.tnlcommunityfund.org.uk/insights/social-investment-publications