Want to do good? Set up a business

Updated: Sep 3, 2018

Nearly a quarter of a century ago, I knew I wanted to make a difference in the world. So I set up a charity. Today, I am not sure the 24-year-old version of me would do this. It’s more likely that I would set up a business that, as part of its way of working, also achieved something for people in need. My inspiration would be people like Cemal Ezel, whose Change Please coffee business employs homeless baristas. Or James Timpson, chief executive of the high-street cobbler Timpsons, who ensures that 10 per cent of his workforce are ex-offenders.

Why do I think like this? There are three reasons. First, I think if you’re serious about changing the world, you need a way to fund it, year in, year out. As a charity chief executive, I wasted years of my life and my best creative energy writing inventive and occasionally fanciful bids to trusts and foundations. My organisation always felt two or three years from a cliff edge. I ended up, a decade in, making it into something more akin to a business, something I should have done in the first place.

The second reason I would start a business rather than a charity is that the shine has come off being a charity. Trust has been eroded and it won’t come back easily. When, as the new chair of the Charity Commission said recently, the public is as likely to trust a stranger in the street as a charity, you know you are in trouble. I would rather set up a business that used some or all of its profits to change lives. People increasingly understand that as more businesses set out their stall as "beyond profit".

More responsive

Third, and this goes a bit deeper, I am conscious, from personal experience, how hard it is to make charities responsive to changes in the world, including the needs of the most vulnerable. My own charity responded, at times, extremely slowly to obvious external threats and opportunities, and we had very good trustees and senior managers.

Businesses, by contrast, tend to have simpler governance arrangements and are that bit more responsive in mindset, by and large, to changes in their marketplace. Customers are that bit more front-of-mind. Decisions are made more quickly, risks are taken that bit more readily and investment is viewed as necessary, not optional. Stuff that isn’t working is dropped more readily. Senior managers who are failing tend to be fired. It’s different and, in some ways, better.

If my 24-year-old equivalent wouldn’t set up a charity now, what does that tell us about the future? The truth is, young people aren’t as conscious of the differences between sectors as I was 25 years ago. Back then, business was business and charity was charity.

Today, the boundary is more porous: people move between sectors more easily. Charities try to look and sound like businesses. Businesses couch their missions in terms that are social. Some of this is cynical but much isn’t, particularly now millennials are moving into senior roles across the private sector.

Add to all this the growing toxification of the charity brand and you’ve got a  scenario in which the well-intentioned 24-year-old can’t really see a whole heap of difference between the third sector and any other. He or she can make a difference whichever way they jump.

Should we be worried about this? Yes and no. Yes, in that our sector is less clearly distinct than it was and therefore, possibly, less relevant. No, in that some of the pressure this creates will generate welcome change: more transparency, better governance, more focus on performance, fewer poor performers.

Regrets, I have none

Do I have any regrets? No. I am fortunate. The charity I created went on to succeed and did even better after I moved on. And I have built some great businesses since. But I do wonder what might have been achieved had I tried to build a business outside the charity sector – whether I could have amplified my impact many times over. When I look at people such as Ezel at Change Please or Sophi Tranchell at Divine Chocolate, part of me wishes I had done it their way.

This is a time of reflection for the sector and for its leaders. A time to review what we’re about and decide whether this is the best way to go about things. As I reflect on my own life and times, I feel that I might have missed out on a few important truths. Unfortunately, I will never be 24 again, but I will carry these forward into my life from here. My invitation to you now is to ask yourself what advice you would give to your 24-year-old self and what that would mean for how you carry on from here.

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