I was at a very interesting panel discussion on socially-responsible businesses on Saturday, and the question of whether or not a socially-responsible business should be expected to make as much of a profit as profit-focused businesses came up. This is a common topic, and there are a lot of people out there who will argue forcefully that investors should accept it when socially-responsible businesses make fewer profits than other businesses in the same industries. These people are completely wrong: we must demand socially-responsible businesses reach the same level of profit as any other company. Many years ago, I did PR for non-profits for a little while. One thing I learned is that the pool of money available to non-profits is pretty static in size: people give about how much they give, and you can’t really get them to give more. That leaves non-profits all competing for their own chunk of a fairly small pie, and it means that new entries in the non-profit space are stuck trying to enter that ecosystem. That’s a tough challenge for any new non-profit venture. In contrast, in the for-profit arena an innovative new entrant can find its own market, and many do create something new. Starbucks launched when few people really wanted a coffee shop that served high-end products, but now hundreds of millions of people around the world spend money there, every day, money that probably didn’t go to incumbent coffee shops. Imagine how much more effect a new socially-responsible for-profit venture can have, working in such a wide-open market, than a new non-profit with the same mission. Of course, the question follows: shouldn’t the socially-responsible for-profit just make less total profit, and devote some of its revenues to its mission? That gets a big “yes, but…” Yes, the socially-responsible for-profit should devote some of its revenues to its mission. No, that shouldn’t decrease profit over time – it should _increase_ profit over time. The way to maximize profit for a socially-responsible venture is to bake that profit into the very concept of the products and services you offer. To return to Starbucks, one of Howard Schultz’s social goals for his company was to provide health insurance to all employees. Starbucks didn’t offer to put a few percent of the price of a fifty-cent cup of weak, burnt coffee, as one found in those days, towards a non-profit that provided healthcare; they gave their employees healthcare, they priced their products to be able to afford that, and they delivered sufficient value to their customers to justify that price. The whole package was innovative – and they grabbed an enormous market that never existed before. Yvon Chouinard made the environment a fundamental piece of Patagonia’s products, and that only made them more able to command a premium price for the target market. Today, Patagonia is an innovator and a leader in the outdoor clothing market. So don’t add on your mission – make it a fundamental part of your product or service. Make it a part of your identity and your value proposition. Then your mission will drive you to more profit, more success, and more contribution to society, rather than less, less, and less.