The tug of war of competing goals: Social Impact and Financial Sustainability

In the world of social purpose organizations, the challenge of managing competing goals is ever-present. As businesses strive to make a positive impact on society while maintaining financial viability, navigating the delicate balance between these objectives becomes paramount. In this article, we'll explore the complexities of managing competing goals through the lens of real-world examples and offer practical advice for organizations seeking to harmonize their social and financial responsibilities.

The Challenge of Competing Goals

Imagine an organization like the Affordable Housing Association, dedicated to providing accessible and affordable housing to low-income citizens. Now, envision their decision to expand into a renovation business, aiming to employ tenants to repair and renovate their buildings. While this initiative aligns with their social mission, it also introduces financial challenges, such as the need to borrow money for equipment and working capital.

Building a Blended Income Statement

To address the financial constraints associated with their social mission, organizations like the Affordable Housing Association must demonstrate the social value they create without compromising their bottom line. One effective strategy is to develop a blended income statement, which combines both business costs and the social costs incurred by employing individuals facing barriers to employment. By showcasing the social impact alongside financial performance, organizations can paint a more holistic picture of their operations and secure funding to support their mission.

Finding Balance: Mission vs. Money

In the realm of social enterprise, the mantra "no mission, no money; no money, no mission" rings true. Balancing the dual responsibilities of creating social impact and generating revenue requires clear decision-making criteria and a commitment to staying true to organizational goals. While trade-offs are inevitable, organizations must prioritize actions that align with their mission and financial sustainability.

Practical Tips for Success

Acknowledge the Conflict: Recognize the inherent tension between social and enterprise goals and openly discuss the trade-offs involved.

Identify Consequences: Consider the potential impacts of decisions, such as financial implications or social outcomes, before moving forward.

Determine Goal Importance: Evaluate the significance of each goal and prioritize actions that serve both social and financial objectives.

Challenge the Conflict: Continuously reassess competing goals and adjust strategies to navigate conflicts effectively.

Create an Action Plan: Develop a clear roadmap for achieving organizational objectives and secure stakeholder buy-in to ensure commitment.

Monitor Progress: Track outcomes related to both social impact and financial performance to measure success and inform future decision-making.

Conclusion

Managing competing goals is an ongoing journey for social purpose organizations, requiring thoughtful planning, clear communication, and unwavering commitment to mission-driven action. By acknowledging the inherent conflicts, developing blended strategies, and prioritizing actions that serve both social and financial objectives, organizations can navigate the complexities of balancing mission and money successfully.