Blurred Lines and the Space in Between: The ProfitPlus Spectrum

Part One in a Two-Part series by Hub LA Co-Founder and CEO Elizabeth Stewart

Three months before I completed my undergraduate degree, I sat in my career counselor’s office discussing what I’d like to do after graduation. “I’d like to get a job helping people; I want to make a positive difference in the world through my work,” I said. “You could work for a non-profit organization,” she replied. At that point I inquired how I would be paid since it was “not-for-profit.” She responded with a laugh and explained to me that employees did get paid, but the organization itself could not generate or distribute a profit or be “owned”, a fact that distinguished it from a for-profit business. Shortly after I graduated, I did end up finding a fulfilling job in the non-profit sector with a Non-Governmental Organization (NGO) working on solutions to the water and sanitation crisis in Sub-Saharan Africa and Latin America.

Fast-forward thirteen years to 2012. The options to do well while doing good have expanded since the time I sat with my career counselor. It’s not as black and white. The line between non-profit and for-profit has blurred. Many graduating students are asking the same hard questions I did, but they are presented with a number of different answers. The job market is difficult, but in the face of this challenging competitiveness, people still want to make a positive difference versus “just getting paid for a job.” Not only could someone choose to work for a non-profit today, s/he could also find satisfaction in making a positive social impact at a for-profit entity that describes itself as “socially conscious/responsible”; “pursuing a triple-bottom line”; or “a social enterprise.”

There is a wide spectrum of terms for entities that exist between purely charitable not-for-profits and purely profit-seeking corporates. These socially-oriented entities⎯entities that generate revenues while simultaneously creating positive impact (or at the very least working to do no harm) ⎯create a juicy, disruptive gray area. It’s territory that many job seekers, lawyers, policy-makers, investors, donors, entrepreneurs, and educators are trying to navigate. From an investment perspective, it is a space that firms like JP Morgan Chase have named the “Impact Economy.” While the term is possibly suitable for investment purposes, I don’t believe this term is adequate. Nor do I believe, on the start-up side, it is helpful to lump everything under the term “Social Enterprise.”

As co-founder of Hub Los Angeles, a professional membership community anchored by physical space (and dedicated to this messy middle territory!), I see a gap in the language we currently have to describe what we at Hub LA see as a movement. This movement is characterized on one hand by new business models that are competing with traditional industries in our mainstream economy, and, on the other hand, pushing the boundaries of traditional philanthropic thinking. As a result, we are starting to play with the term ProfitPlus to describe the models and thinking that make up this emergent space in between. This new term appropriately summarizes the common thread inherent in the models described here: to be profitable, yes, AND to go beyond just making a profit to making a positive impact.

While no term is perfect at encapsulating a dynamic, rapidly changing movement, it is important to propose simpler language for several reasons. First, we want it to be inclusive so people (like my guidance counselor or my state representative) can easily be a part of this shift. To grow jobs in this space where money meets meaning, we also need to celebrate and highlight the diversification and success of hybrid models that don’t all fit nicely under the current definitions of Social Enterprise. We require “sexier”, simpler language the mainstream media can embrace. Finally, trying out language like ProfitPlus is a way to unite a large swath of pioneers who are working toward the same goal, but until now have been siloed under their niche term, whether it be a CSR professional, a For-Profit Social Entrepreneur, a Non-profit Entrepreneur, or a professional working at a B Corp. Without new unifying language to describe the greater movement underway, we risk losing momentum and the larger societal meaning that it carries. The space in between is never simple and always requires new language as it takes shape.

Come back Monday for Part Two, “Populating the ProfitPlus Spectrum.”