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Gen Y guide to making money and doing good

 

March 2017

 

 

 

 

 

The Millennial generation is erasing the traditional commerce-charity divide, reports Nigel Bowen.

US Millennial Carrie Hammer runs an eponymous fashion house. “It’s absolutely a for-profit business,” she says. “But selling dresses to professional women also puts me in the privileged position of being able to create social change. I’ve done that, for example, through my ‘role models not runway models’ initiative. It involves female CEOs, not professional models, showcasing my clothes at fashion shows.

This sensibility, of seamlessly combining a commercial and social agenda, is endemic in the start-up culture of Generation Y.

“To be a good social entrepreneur you need to be a good entrepreneur; those things are blending together,” notes StartupAUS director and entrepreneur Topaz Conway. “To feed the beast of whatever cause it’s trying to support, a social enterprise has to have a solid revenue-generation proposition that can be scaled up.”

“People shouldn’t be ashamed of making a profit if they are also doing good. That’s a fabulous outcome for everyone,” says Annie Parker, the Gen X former co-founder of start-up accelerator muru-D and now chief executive officer of start-up precinct Lighthouse Sydney. “We’re going to see an awful lot more of that approach from the Millennial generation.”

'Role Models Not Runway Models' is an initiative of designer Carrie Hammer, whose models and fashion has been shown at New York Fashion Week.

Benevolent Society social benefit bond results

When asked what differentiates her generation, Hammer nominates its hunger for meaning. “My generation wants to make sure it is working towards something purposeful; something that makes life richer and more engaging. I’m doing more than selling clothes. I believe I’m selling a positive message that empowers women.”

“The former generation seemed to think you had to accumulate a lot of wealth then give it away. It’s that Bill & Melinda Gates Foundation approach,” notes Hammer. “I wanted to start making a contribution from the moment I launched my business. It goes back to leading a purposeful life; you want to be doing that from day one.”

And sometimes the connection between commerce and charity is very, very direct. Take the case of social enterprises. These are organisations that sell a product or service and funnel resulting profits into good works.

The Foundation for Young Australians chief executive officer Jan Owen says some “great examples, all started by Australian Gen Yers” include Thankyou Group, which started selling bottled water to fund clean-water projects and has since expanded into food, nappies and body care; Who Gives A Crap, which sells toilet paper to improve sanitation; and Feast of Merit, a Melbourne restaurant that donates its profits to support “impact” entrepreneurs around the world. (Impact investing, another newish development, involves investing in companies, organisations or funds with the intention of generating a positive social or environmental impact alongside a financial return.)

Owen says a large portion of social entrepreneurs are creating tech-based solutions to address social challenges. “For example, one of FYA’s social entrepreneurs, Taj Pabari, created a build-your-own-tablet-computer kit when he was 14. It’s now being distributed to school-aged children around the world, teaching them digital skills and enabling connectivity.”

Those aged over 30 can access the genius of youngsters such as Pabari through Y Lab, a project of the foundation. “It facilitates young people driving social change through arranging for them to be employed as consultants by governments, organisations and communities,” Owen explains.

"To be a good social entrepreneur you need to be a good entrepreneur; those things are blending together."

Corporates take the pledge

Aside from their own ventures, Gen Y is going direct to business, calling on them to make a continuous commitment to needy causes.

While not prescriptive about the details, the Pledge 1% program encourages businesses to pledge 1 per cent of their resources – be it equity, profits, staff time, equipment or all of those things – to worthy causes. The aim is to get founders to do this as early on in the development of a business as possible. And to maintain the commitment regardless of stock-price gyrations.

“If 1 per cent doesn’t sound like much, consider that corporations on average give 0.02 per cent [of their profits] to charity. One per cent is a five-fold increase,” says director Dipti Pratt.

Atlassian, along with Salesforce.org and Rally, founded Pledge 1% in 2014. Thanks to the people running those three companies deciding to promote a fresh and user-friendly approach to philanthropy, billions of dollars could be set to flow into the coffers of the world’s charities over the coming years.

The new approaches companies are taking to philanthropy grow out of the new mindsets those founding and working for them exhibit. Pratt believes the increasingly blurred boundaries between people’s work and the rest of their lives will continue to transform philanthropy.

“We’re in an era when employers want employees to bring their whole selves to work. Well, if people are bringing their whole self to work, they want to work for an organisation that aligns with their values. One that allows them to feel they are contributing to something meaningful. When a company signs up to Pledge 1% that can become part of the company’s DNA. That impacts everything about that company, including how employees view their jobs.

 

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