The Impact Capitalist does not try to “change the world.” There are many people trying to “change the world” and many more teachers, pastors, coaches, business leaders, and politicians, to name just a few, who are encouraging others to “change the world.” But what happens if my change is incongruent with your change? That is, what if my change comes into conflict your change? [See related blog post: Why I have no desire to change the world]
My business partner, Tom, and I have developed something we call the Give-Greed Continuum to help explain this fascination with changing the world. “Give” is on one end of the spectrum with “Greed” at the other end. We’ve crudely drawn the continuum to look like this:
Tom, as an expert in human behavior, says that humans are “cognitive misers.” It’s true; we try to create mental shortcuts to describe complex situations. This is true when we, as humans, use mental shortcuts to explain things like “give is good” and “greed is bad.” But people fail to look at the consequences of each of these concepts. Greed is seen as being “selfish” and to Give is seen as “self-less.”
But, when do I stop giving? Am I greedy if I stop giving?
What if I give everything away? Am I now not in a position where someone else would need to give to me?
And, why do people give? (Is it to benefit them – through a tax break or an ease of conscious?) Is it possible that giving is actually selfish?
Let’s be completely clear: We are not trying to justify greed, per se. It is, after all, one of the 7 deadly sins. Greed is selfish. Being a Crony Capitalist is about being greedy and selfish (see post: Stealing Capitalism Back).
I have often joked that Americans have BIG hearts and tiny brains. Americans are fabulous in times of crisis, but do not understand the negative consequences of continuing to give to “causes.” I have run both for profit companies and a social, non-profit venture (Hoops for Haiti) along with living in a third world country. I have seen the good produced by giving but also the harm.
It’s evident that many others have seen and/or experienced as well. That’s why Social Entrepreneurship and Social Ventures have become such hot topics and promoted in universities across the world.
Social ventures have been started by people with the desire to help, knowing that they can’t give everything away, but that they need to “use the principles of business” to be able to change the world.
So, if we go back to the Give-Greed Continuum, we can now add Social Entrepreneurship (SE).
Give SE Greed
Most social ventures are considered “better” or a more “righteous approach” (self-righteous?) to business because there is a desire to only get to sustainability, or enough to keep going. This way, many social entrepreneurs wrongly believe, they can eliminate the profit motive, because if the profit motive can be eliminated, so can greed. (But, as we’ve seen now, it can shift to other forms of greed.)
Another problem with social ventures is that social entrepreneurs, many of whom are seemingly trying to fix the world’s social problems, are also often driven by ideology or activism, and not necessarily by what the market is asking for.
Where does the business owner (BO) who is trying to build or maintain a business, but not necessarily by phony, crony means? That group is likely closer to the “Greed” side of the continuum.
Give SE BO Greed
Let’s also be completely clear about the following:
– self-interest is not equal to greed
– profit is not evil
– profit (money) can be used as a tool and a force for good
But what about the Impact Capitalist…the business owner that wants to make an impact on the people around him or her? Because the Impact Capitalist is pursing both an impact and a profit, this kind of business owner would be right in the middle of the continuum.
Give SE IC BO Greed
We are not rejecting charity or philanthropy (it is critical in many areas), but we are declaring two things:
- “Giving,” philanthropy, and social entrepreneurship are not, in and of themselves, righteous. To put it another way, giving is not always automatically creating good and many times can actually be “bad” or harmful; and
- While the Lord may love a cheerful giver, He also requires a return on His investment.
Being an Impact Capitalist requires one to find a balance between one’s self interest and the needs of others. This is how we make an impact.