Are Altruism and Profits Mutually Exclusive in Business?

NEW YORK (MainStreet)—When donating money to nonprofits, most consumers look for organizations that send the maximum impact to their causes and keep as little as possible for themselves.

But what about companies with a social mission that aren't officially nonprofits? Wedged in the space between a traditional company and a charity, are these companies at a disadvantage when it comes to competing with either end of the spectrum, or do they have a niche all their own? How do they manage the expectations of ROI against their stated mission?

This topic was of particular interest to the audience at Internet Week New York this year, which voted for an audience-submitted panel on tech startups with strong social missions. Speaking at the panel were Gene Gurkoff of Charity Miles, Su Sanni of WeDidIt and Zack Rosenberg of DoGoodBuyUs to explain how their companies bridge the two worlds.

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Are Mission-Driven Businesses at an Advantage or Disadvantage?

It's logical to think that splitting a company's attention between its core business and its social mission could be distracting. Gurkoff agreed that donating a percentage of profits could set a company back: "If you're selling a shirt for $14 and saying 50% of proceeds go to charity, then you could sell it for $7, and someone else will—and that will put you out of business."

Gurkoff said that's why his company doesn't follow that model. Charity Miles is a mileage tracker for runners and other athletes. The more you work out, the more money donated to your cause. The money is provided by corporate sponsors, who participate for the positive publicity and to bolster their own charitable pursuits.

Sanni felt similarly; his company is a business that helps charities fundraise more efficiently. Rosenberg sees his value as helping businesses sell products they make, creating value rather than just donating money (DoGoodBuyUs is an online marketplace for items made and sold by charities, though those items do give a percent of proceeds back to charity, usually 50% or more ).