How do we craft the story of our brand in such a way it resonates with and connects with people?

Many not-for-profits are struggling to survive in an environment that is rapidly changing. Some of these challenges were discussed in a previous article. To adapt and remain viable in this changing environment, organisations are considering developing a profit-for-purpose model.

The profit-for-purpose model, also known as social enterprises or social businesses, is where an organisation aims to generate profits while simultaneously pursuing a social or environmental mission. The profit generated through the social enterprise or business provides an independent stream of income that provides the stability for the organisation to make a social impact. The challenge with being dependent on government funding is that when the political context changes, it impacts the funding. The consequence is a lack of long-term stability in program delivery that is required to really make a change in communities and the lives of people.

What are the key characteristics of profit-for-purpose organisations? 

There are six key characteristics of profit-for-purpose organisations.

1. Social or Environmental Mission

Profit-for-Purpose organisations have a clearly defined social or environmental purpose, such as addressing poverty, improving education, promoting environmental sustainability, or supporting community development.

2. Financial Sustainability

Profit-for-purpose organisations aim to create profits through the sale of goods or services, donations, grants, or a combination of these revenue streams. The purpose of being financially sustainable is to have the stability to make an ongoing impact in the area of their social or environmental mission.

3. Re-investing Profits

Rather than distributing profits to shareholders or owners, profit for purpose organisations reinvest a substantial portion of their profits back into the organisation to further advance their social or environmental mission.

4. Ethical Business Practices

What is meant by this, is that profit-for-purpose organisations prioritize ethical and responsible business practices. They will embrace principles such as fair trade, sustainable sourcing, transparent supply chains, and fair treatment of employees.

5. Measuring the social and environmental impact of the services provided by the organisation

Profit for purpose organisations place an emphasis on measuring and evaluating their social or environmental impact. They use metrics and indicators to assess the effectiveness of their initiatives and demonstrate accountability to their stakeholders.

 6. Hybrid legal structures

Profit for purpose organizations can adopt various legal structures depending on the country and jurisdiction. Examples include B Corporations (B Corps), social enterprises, community interest companies (CICs), and benefit corporations, among others.

A B Corp is a company that has voluntarily met the highest standards for social and environmental performance. These standards are intentionally set high and cover a company’s impact in key areas, including Governance, Workers, Community, Environment, and Customers. To receive the B Corp certification, the organisation must meet stringent requirements, including completing a comprehensive assessment of their company’s impacts on all stakeholders, and having their assessment verified by B Lab, the nonprofit behind the B Corp certification.

Given these characteristics, what are the main differences between not-for-profit and profit for purpose organisations.

What are the differences between not-for-profit and profit-for-purpose organisations?

There are several differences between both types of entities that must be considered.

The different emphasis in Mission

The mission for most not-for-profit organisations is to address specific social or environmental needs, and any surplus funds are reinvested back into their programs and activities.

Profit-for-purpose organisations have a dual mission. To generate profits and to create a positive social or environmental impact. The consequence of this dual mission is that business activities are aligned with a specific social cause or mission.

The different sources of funding

Not-for-profit organisations rely on a mix of funding sources, such as donations, grants, fundraising events, and government funding, to sustain their operations. As mentioned above, any profits are reinvested in program delivery.

Profit-for-purpose organisations generate revenue through their products or services, often in a market-driven manner. They may reinvest a portion of their profits into furthering their social objectives or contribute a percentage of their revenue to specific causes.

Different Legal statuses between both types of organisations

Not-for-profit organisations are registered as non-profit entities and are governed by specific regulations and laws. Whereas profit-for-purpose organisations can be structured as various legal entities, including for-profit companies, social enterprises, or benefit corporations, depending on the jurisdiction.

Governance and ownership between the two types of organisations

Not-for-profit organisations are typically governed by a board of directors who oversee the organisation’s activities and ensure adherence to its mission and legal obligations.

Within Profit-for-Purpose organisations, there can be shareholders who hold equity in the organisation and prioritise both the financial returns and the social or environmental impact of the business.

Things to think through when considering transforming not-for-profit organisations into profit-for-purpose entities

By blending business principles with a focus on social or environmental impact, profit for purpose organisations create sustainable and scalable solutions to societal challenges. This makes the profit-for purpose structure very appealing to many not-for-profit organisations.

However, to make this transformation, there are several important things to consider, including the following three.

The importance of having a clear revenue generation strategy

Not-for-profit organisations typically rely on donations, grants, and fundraising efforts to sustain their operations. To become profit-for-purpose, it is crucial to develop a clear revenue generation strategy. This involves identifying potential sources of income that align with your organisation’s mission and activities. For example, revenue streams such as fee-based services, product sales, partnerships with businesses, or social enterprise initiatives could be considered. It is essential to analyse the market and consider the organisation’s strengths to determine viable revenue sources that support the organisation’s purpose.

Implement effective business planning

Shifting from a not-for-profit to a profit-for-purpose model requires careful planning and strategic decision-making. This includes, developing a comprehensive business plan that outlines the organisation’s mission, objectives, target market, products or services, competitive advantage, marketing strategy, and financial projections. This plan should also consider factors like pricing, cost structure, scalability, and risk management. The business plan serves as a roadmap for the organisation’s transition and provides a framework for making informed business decisions.

Build strong governance and financial management within the organisation

Effective governance and financial management are crucial for any organisation’s success, especially when transitioning to a profit-for-purpose model. It is crucial to strengthen the organisation’s governance structure by establishing a board of directors with diverse expertise and a shared vision for the organisation. Equally important is ensuring transparency, accountability, and sound decision-making processes are in place; including robust financial management systems, accurate bookkeeping, budgeting, and financial reporting.

Having strong governance and financial management enables the organisation to monitor and track its financial health, make informed decisions, and demonstrate accountability.

If a decision is made to transition from a not-for-profit to a profit-for-purpose model careful consideration of legal and regulatory requirements, as well as potential implications for tax-exempt status and donor relationships must be made. It is advisable to consult with legal and financial professionals who specialize in non-profit organisations to ensure compliance and navigate the transition successfully.

Not-for-profit organisations and profit-for-purpose organisations are both types of entities that pursue social or environmental goals. However, there are differences in their structures, legal status, and approaches to generating revenue.

In summary, not-for-profit organisations primarily focus on their mission and rely on external funding sources, while profit-for-purpose organisations aim to generate profits while also pursuing social or environmental goals. Given the challenges faced by many not-for-profit organisations, it may be time to consider alternative structures that provide more sustainability to enable entities to achieve their social and environmental goals.

Given the potential economic advantage of digital identities and the need to protect them against identity theft, how can digital identities be managed?

Are curators taking over from influencers as the next thing in social media and branding?

In January, we wrote about the ongoing influence of influencers in 2023. In that article, we stated,

“In the last three years, the number of Google searches for “influencer marketing” has increased by 1500%. This shows that influencer marketing continues to have opportunities and will continue to play an essential role in marketing as brands balance the need to survive the economic downturn rising interest rates and build and retain trust and improve collaboration.”

Six months later, we are witnessing the rise of curators. Brands will continue to use Influencers in their marketing and campaigns; however, as the role of Curators becomes more recognised, brands will have another option to market and promote their products, particularly to aspirational consumers.

Consumer Culture and Aspirational Consumers

To understand consumer psychology, it is essential to understand aspirational consumers.

Aspirational consumers are those consumers who strive for more in life. They enjoy pushing themselves to learn new skills and tend to be career-oriented and opportunistic, and they are looking for brands that can help them become more successful.  Aspirational consumers makeup about 39% of all consumers and hence are a crucial audience for brands to consider in their marketing strategy.

For aspirational consumers, it isn’t about having the money to buy things but having the knowledge and taste to know what to buy. The product is more than the product. It is a vehicle for self-expression, identity, and social status. In this context, knowledge, judgement, and taste are valuable [1], and this is where the role of curators becomes essential.

Curators play a significant role because they act as tastemakers, trendsetters, and experts who help consumers navigate the overwhelming abundance of choices in the marketplace, particularly in areas such as fashion, lifestyle, art, and home decor.

These curators often have a distinct aesthetic or expertise and use their platforms to showcase products that align with their vision or cater to a specific lifestyle. By curating products and presenting them in an appealing way, curators provide consumers with a more focused and personalised shopping experience.

They also create a narrative around the products they showcase, highlighting their unique features, quality, and value. This storytelling aspect enhances the desirability of the products and fuels the aspiration to own them.

What is the difference between Curators and Influencers?

While there can be some overlap between curators and influencers, they are quite distinct.

Curators

Historically, a curator was a person who was responsible for selecting, organising, and presenting collections of items, often in the context of museums, art galleries, libraries, or online platforms. They are experts in their respective fields and possess knowledge and understanding of art, history, culture, or other specialised areas. They research, acquire, preserve, and interpret objects, artworks, or information to create meaningful exhibitions or collections. Their goal is to provide an engaging and informative experience for visitors or users, helping them appreciate and understand the curated materials.

This concept of curator has seeped into the aspirational economy. They have become influential figures in shaping consumer aspirations and the act of buying things by leveraging their expertise, storytelling skills, and platforms to create desire, offer personalised experiences, and guide consumers in their purchasing decisions.

Influencers

An influencer is a person who has gained a significant following and influence on social media platforms or other digital channels. They typically focus on creating and sharing content related to specific topics such as fashion, beauty, travel, fitness, technology, or lifestyle.

Influencers often have expertise or a strong interest in their niche and use their personal brand to engage and connect with their audience. They aim to inspire, inform, or entertain their followers through content and may collaborate with brands for sponsored posts or endorsements. Influencers typically have a direct relationship with their audience and can have a considerable impact on consumer behaviour and trends.

In summary, an influencer primarily operates within social media, creating and sharing content to engage and influence their audience, often related to lifestyle, fashion, or specific interest areas. Whereas a curator is an expert who selects and organises items, information or products in a way that establishes them as tastemakers, trendsetters, and experts who help consumers navigate the overwhelming abundance of choices in the marketplace.

The Importance of Curators for Consumers

While both curators and influencers have their roles, the importance of each depends on factors such as the nature of the content, the target audience, and the platform being used. However, in recent years, there has been a growing recognition of the value of curators, particularly in fields where expertise and trust are crucial. Curators provide a curated experience, filtering out noise and presenting high-quality, relevant content. This can be especially important in domains where accuracy, reliability, and in-depth knowledge are paramount.

While influencers have gained significant attention and have been highly influential in shaping consumer trends and promoting products or services on social media, there has also been some scepticism and a growing demand for authenticity and transparency in influencer marketing.

As a result, of the scepticism and ethical concerns around practices used by some Influencers, some consumers have started to seek out trusted curators who provide unbiased recommendations and a deeper understanding of the subject matter. This has made the role of curators on social media more important.

Unlike influencers, curators often choose to remain anonyomous to boost their credibility. They are also not after the sheer reach and volume of followers: in their niches. It is the quality of followers that count. By influencing quality followers, curators shape culture by becoming a  source of inspiration for broader trends [2].

Ultimately, the importance of curators and influencers is not mutually exclusive. They serve different functions and cater to different needs. While influencers often excel at promoting products and engaging with a broader audience, curators offer specialised knowledge, expert guidance, and a curated experience. The relative importance of curators and influencers will likely continue to evolve as audience preferences and the dynamics of online content consumption change over time.

Starting points for becoming a curator

When a brand is considering becoming a curator, it is essential to consider the following four points [3].

Define the brand’s business objective

Decide what curating will achieve for the brand. Curation can retain an audience and attract new ones that have yet to consider a brand. It can attract a collaborator or start a brand partnership. It can increase product value and protect pricing. Hence it is essential to be clear about what becoming a curator will achieve that is different to what the brand already achieves.

Define the point of view and the story the brand will tell (to achieve the brand objective)

It is important to ground curation in one of the following:

• Values
• Knowledge and expertise
• Culturual moment; or
• Story

When a brand has decided what the curation will be based on, it is essential to clearly define a filter that distinguishes the things and behaviours the brand focuses on. Decide and specify what makes the brand’s curation distinct and what is the unique aspect of its experience.

Define how the story will be conveyed (the strategy)

Identify the sources of the material (products, videos, memes, references, images) for the brand’s curation. Define the sub-themes or sub-categories that enforce a more comprehensive narrative. Organise them according to the brand’s filter. Remember that every item must tell the same story as the entire narrative. 

Execute the Strategy

Define when and how often the brand will share and how your selection will nurture and create that unique and selective experience for the brand’s community.

Curators will become more critical for brands, particularly in marketing to aspirational consumers. However, becoming a successful curator takes time and effort. Consistency, quality, and engagement are vital to establishing a brand’s credibility and attracting an audience that values the brand’s curated content.