Key Takeaway:
A study by researchers has found that companies can make a difference without sacrificing financial performance by integrating social and environmental concerns into their business strategies. This approach, known as “social profit orientation,” places equal value on financial profits and positive social outcomes. Companies like Mastercard’s Girls4Tech initiative and World Central Kitchen’s Food for the Planet initiative are thriving by doing right by society, not in spite of it. These companies excel in goal-setting, resource management, and relationships. They set ambitious goals, strategically invest resources, and understand that success is built on collaboration. The study suggests that companies with a social profit orientation are proving that it is possible to do well financially while also making a positive impact on the world. This approach may be the best way for organizations to future-proof themselves against evolving market conditions and societal expectations.
For decades, corporations were guided by a single, powerful mantra: maximize profits. It was an idea made famous by economist Milton Friedman, who argued that a company’s only real obligation was to make money for its shareholders. But in today’s world, where climate change, inequality, and global crises are reshaping how we think about business, that profit-at-all-costs approach is starting to feel outdated. Many businesses now realize there’s more at stake than just the bottom line.
Over the past few years, corporate social responsibility (CSR) has taken root as a way for companies to integrate social and environmental concerns into their business strategies. But even that is starting to feel like it’s not enough. Enter environmental, social, and governance (ESG) strategies, which go beyond just doing good in the community by addressing much larger, global issues like climate change and sustainability. Companies are finding that these strategies can not only help people and the planet—they can also be good for business.
But here’s the big question: can a company or nonprofit actually make a difference without sacrificing financial performance? Can doing right by society coexist with delivering solid returns to shareholders? This is where things get interesting.
The Clash Between Profit and Purpose
The tension between making money and making a positive impact has been at the center of heated debates. Critics argue that focusing on environmental or social goals distracts from a company’s financial responsibilities, while others see it as essential for long-term success. In recent years, conservative states in the U.S. have even passed anti-ESG laws aimed at preventing public funds from considering climate-related risks in their investments. Meanwhile, some shareholders have filed lawsuits accusing companies of hurting profits by prioritizing social policies.
Despite the pushback, the majority of investors understand that companies can’t afford to ignore things like climate change and social unrest. In fact, shareholder proposals against ESG practices typically receive little support—less than 5% of the vote. The reality is that these initiatives can help safeguard a company’s future.
But what happens when companies go beyond the typical CSR or ESG playbook? What if they made social impact a core part of their mission, without sacrificing financial performance? That’s what a group of researchers set out to investigate by studying companies and nonprofits that are trying to do exactly that.
When Doing Good Is Good for Business
In a study involving interviews with executives from 21 organizations—ranging from Mastercard to World Central Kitchen—researchers sought to understand if businesses could truly integrate social and environmental goals without losing their competitive edge. What they found was encouraging: companies and nonprofits alike are thriving by doing right by society, not in spite of it.
For example, Mastercard’s Girls4Tech initiative has empowered over 1 million girls worldwide by helping them develop tech skills. Meanwhile, World Central Kitchen, led by chef José Andrés, has fed millions in disaster zones across the globe. These organizations aren’t just fulfilling their missions; they’re strengthening their reputations, building relationships, and energizing their employees—all while achieving financial success.
The key takeaway? Companies that embed social profit into their core missions aren’t just doing a little good on the side. They’re building long-term, sustainable business models that benefit both their bottom line and the world.
Beyond CSR and ESG: The Social Profit Orientation
This new approach is called “social profit orientation,” and it’s a big step beyond traditional CSR or ESG strategies. While CSR initiatives often focus on activities like volunteering or recycling drives, social profit orientation places equal value on financial profits and positive social outcomes. It’s not about choosing between doing good or making money—it’s about ensuring that both are prioritized equally.
For-profit companies and nonprofits alike are adopting this mindset. Take, for instance, California-based financial services company Oportun, which offers affordable loans to people with low credit scores. By using AI to assess creditworthiness, Oportun has helped borrowers save billions in interest and fees while still achieving record revenues.
Or look at Gundersen Health System in Wisconsin, which became the first U.S. healthcare system to offset 100% of its fossil fuel use through innovative sustainability practices. The hospital saved millions of dollars while significantly reducing its environmental footprint. In both cases, these organizations are proving that doing good can also be good for business.
Building a Framework for Success
What sets these companies apart? The researchers found that businesses with a social profit orientation excel in three key areas: goal-setting, resource management, and relationships.
First, they set ambitious goals that go beyond the typical focus on financial returns. For example, Gundersen’s sustainability initiatives weren’t just about cutting costs—they were about protecting the environment for future generations. Second, these companies strategically invest their resources—whether it’s money, labor, or technology—with an eye toward making a lasting impact.
Finally, relationships are critical. Whether it’s building trust with customers, employees, or business partners, organizations that prioritize social profit understand that success is built on collaboration. Rescue Agency, for instance, works with communities to develop campaigns that address unhealthy behaviors like smoking or substance abuse. By engaging with people directly and understanding their experiences, Rescue Agency creates campaigns that are both effective and empathetic.
The Future of Business: Profit and Purpose
At the end of the day, companies with a social profit orientation are showing that it’s possible to do well financially while also making a positive impact on the world. They’re rewriting the rules of business, proving that generosity and good business can go hand in hand.
In a rapidly changing world, this approach may also be the best way for organizations to future-proof themselves against evolving market conditions and societal expectations. As consumers and investors continue to demand more from businesses, those that prioritize both profit and purpose will be the ones that thrive.
