How Mission-Driven Initiatives Drive Small Business Growth
Over a third of small businesses surveyed by Capital One say they have mission-driven initiatives to help their communities
More and more small business owners are choosing to integrate community- and mission-driven values into their companies. Giving back to their neighborhoods, donating to charities, or working on environmental initiatives are not just token activities, but practices woven in to business operations. And this approach doesn’t just deliver value to communities, it increasingly makes good business sense—helping small companies build brand recognition and attract loyal customers.
According to Capital One’s Fall 2019 Small Business Growth Index, 36% of small business owners say their companies have mission-driven or community impact initiatives. Women- and minority-owned businesses are even more likely to do good in the community: nearly half of women business owners (49%) and minority business owners (44%) reported having mission-driven initiatives. And it seems that the more a company grows, the more likely it is to have a mission-driven initiative: two-thirds of business owners with more than 50 employees report giving back to their communities.
These business owners are helping their communities in many ways. For example, 62% of companies with mission-driven initiatives give money to charity, while half encourage employees to volunteer. Meanwhile, 39% do pro bono work, 29% support green or recycling programs, and 27% enable customers or clients to donate as part of doing business with them. There are clearly many ways to incorporate impact initiatives into the fabric of a business - whether it is baked into a business model or a more organic, employee-driven activity.
“Small business owners are often part of the fabric of local communities, so it makes sense that they are finding creative ways to give back as part of running their companies,” said Jenn Garbach, Head of Brand and Customer Marketing for Small Business Card, Capital One. “And almost all mission-driven companies report that these initiatives have a positive business impact, whether it’s increased employee retention, attracting new customers or helping them stay motivated.”
An overwhelming 92% of business owners with a mission-driven initiative say it has a positive impact on their business. Nearly three-quarters say their charitable activities have boosted public perception of their brands, while two-thirds say it helps them attract and retain customers. Sixty-five percent of business owners say it helps to keep them motivated, and 37% reported that it contributes to hiring and retention of employees.
These findings are perhaps not surprising, considering modern consumers are eager to support charitable causes and are more likely to choose businesses that align with their values. Research from Accenture and Marketing Dive found nearly two-thirds (63%) of global consumers prefer to purchase products and services from companies that stand for a purpose that reflects their own values and beliefs, and will avoid companies that don't. Americans are also more loyal to purpose-driven brands, according to a study from Cone/Porter Novelli.
At the same time, running a mission-driven business can be challenging. Ken Jacobus, founder of Good Start Packaging, which supplies food-service establishments with compostable packaging, notes, “You have to be a little courageous and vulnerable in this world, especially as a business owner, to live your values all the time.”
- Causes should extend naturally from the business model
- Values should be consistent across all areas of the business
- It’s not enough to study customers’ demographics; brands must understand customers’ values, too
- It’s never too early to focus on values. However, it’s often too late
- It’s worthwhile to perfect the humblebrag
For more information on how giving back can help small business owners succeed, as well as a deep dive into how entrepreneurs view the overall business climate, please see Capital One's Small Business Growth Index.