This article was written by Russ Stoddard and Oliver Russell and originally published on B The Change.
Call it what you want — mission-driven, purpose-driven or socially conscious business — social entrepreneurs and their market-based enterprises are driving real change in the marketplace.
I believe 2018 will be the tipping point for social enterprise. Here are five specific predictions for the sector and the positive gains it will create in the workplace and the world.
1. The blockchain revolutionizes social responsibility reporting.
Corporations currently pursue a range of certifications, from fair trade to B Corporation status, each offered by an independent verification body.
In 2018, I believe blockchain technology will begin revolutionizing the assessment of corporate social responsibility (CSR) and how a company measures its accountability and sustainability based on environmental, social and governance (ESG) policies and behavior. Blockchain technology will authenticate a richer, more accurate global ledger of a company’s social and environmental performance to enable truer assessment. Motive Ventures, a startup I’m currently advising, is working on one such blockchain certification technology called Goodchain.
2. Consumers will be rated on social responsibility.
In 2018, certification will move beyond the corporate world as technology enables assessment of an individual’s social and environmental impact.
As a citizen consumer, you’ll be rated on a number of fronts: from your personal energy consumption to your use of alternative transportation, and from your charitable donations and volunteer work to the purchases you make from companies rated as socially conscious. You’ll receive a score, which will be fluid and gamified by companies or governments to serve multiple purposes: stroke your ego, encourage measurable improvement of sustainable actions and provide behavior-based rewards such as discounts and special offers.
I predict that your “number” will even be used to align values with prospective dating opportunities. Far-fetched? Such a system is currently being prototyped by the Chinese government.
3. Nonprofits will become more like for-profits.
The rise of for-profit social enterprises combined with new government tax policies will change the way nonprofits operate, and those that embrace disruption will flourish.
Social enterprises engage in work that creates positive environmental and social outcomes typical of those of the nonprofit world. These mission-driven initiatives range from independent volunteer efforts to impact investing. Foundations, too, are becoming more self-directed and bypassing nonprofits to pursue their own projects. Individuals are already doing the same through crowdfunding and crowdworking initiatives.
At the same time, newly enacted tax reform substantially raises limits on standard deductions for single and joint filers. This will likely reduce the number of people itemizing charitable donations on their tax returns. The big question is, will it reduce the number of donations that are made? Without itemizing, the incentive for some to make a donation could decrease. Nonprofits are highly concerned this will significantly dent donations in the United States, increasing pressure on nonprofits to replace this source of unearned revenue.
Double whammy! These twin forces of heightened competition and unfavorable tax policy will force nonprofits to be less reliant on contributed income from individual donations and foundation grants, and will encourage them to instead generate earned income from services and products that compete in the open market.
4. Corporations take a stand and invest accordingly.
Companies will extend the current trend of brand activism by taking contentious stands on issues of public importance. They will also pursue a more stealthy form of activism to their portfolios — making impact investments in startups seeking environmental or social change.
Companies like Patagonia, TOMS, Chobani and even our small business, Oliver Russell, are now making impact investments outside their core businesses by taking equity stakes in startups that aim to deliver social, environmental and financial returns on invested capital.
These investments align with the companies’ social and environmental charters. They also are smart business moves that extend the reach of their brands, incubate new ideas and collaborations, and diversify business risk beyond their core industries and product lines.
5. Women will rise in the social enterprise economy.
In my book published in September, Rise Up: How to Build a Socially Conscious Business, I predict that over the next decade, a combination of purpose-driven social enterprise and the market-shifting effects of social technology will lead to advancements for women in the marketplace.
I now believe these will be accelerated into 2018 with major and measurable gains for women in the workplace, thanks in part to the #MeToo movement.
Society now has the momentum that will embolden women and cause corporations to make significant changes to workplace policies, close the gender wage gap and achieve parity in senior management and corporate boards. If you’re looking for proof that this might just happen, look no further than General Motors — yes, General Motors! Led by CEO Mary Barra, its board is made up of 50 percent women and 50 percent men. I’d say it’s about time.
You may also be interested in learning how social media tech can help solve massive problems in 3 Ways Social Media Has Been Leveraged For Mass Collaboration