The Impact Spectrum
By: Charles Armstrong
Tags: Social Impact, Social Enterprise, Social Entrepreneurship, Cooperatives, Capitalism

Changing Capitalism Summit 2019 — Charles Armstrong, The Trampery with Kajal Odera, Change.org

October marked an important milestone for The Trampery, with the first cohort of Evo Accelerator starting its two-month journey. This is The Trampery’s first programme entirely dedicated to purpose-driven businesses. A year ago, at The Trampery’s 10th anniversary celebration, I announced our mission for the coming decade to support “entrepreneurs who are changing capitalism” and pledged we’d launch a new accelerator with this philosophy by the end of 2020. Despite the intervening pandemic, Evo Accelerator has arrived!

On 21st October, 27 businesses gathered online for the opening session. They spanned an incredible variety of sectors, backgrounds and growth stages. What they all shared was a commitment to achieve social or environmental benefits alongside profit. Members of the cohort include Trove, a mobile app for local book-sharing, Circla, a doorstep refill service for beauty products, and PressPad, offering low-cost housing to people from underrepresented communities who want to work in journalism.

The two-month programme includes sessions on matching business models with mission, geopolitical macro-trends, financing options for purpose-driven enterprises, impact-based marketing, and more. As the first run of a new course, we’re treating this as a prototype, gathering feedback at every step, so we can fine-tune the programme for the second cohort in Spring 2021. If you’re interested in joining next year, you can register your interest here.

Evo Accelerator is led by Tom Farrand, The Trampery’s Coach-in-Residence

Meeting the businesses on Evo Accelerator has made me reflect on the different ways organisations balance profit with social impact. There are lots of grey areas, fuzzy edges and national variations; but underneath this, I believe there’s an “impact spectrum” of six distinct categories, with pure profit at one end and pure social impact at the other:

Profit-driven business

The globally dominant form of organisation for the last 150 years, with roots going back to the 14th century. Purely focused on generating profit for shareholders. No ethical considerations. No interest in social and environmental impacts beyond meeting legal and regulatory obligations. Profit-driven business with ESG/CSR programme

A transitional form of business that became widespread from the 1990s (ESG = Environmental Social Governance, CSR = Corporate Social Responsibility). Typically an established profit-focused corporation seeking to reduce the negative impacts of its core activities, or generate positive impacts that are separate from its core activities. Often the ESG/CSR agenda is driven by marketing considerations and investor demands and isn’t central to the corporation’s goals. Today it is unusual to find a large corporation that doesn’t have an ESG/CSR programme. Purpose-driven business

A for-profit business designed to create social or environmental benefits through its core activities. Emerged during the 2010s and has grown to an international movement. Typically the impact outputs are integral to the founder’s motivation for setting up the business. Typically operates with the same legal structure as a profit-driven business. Cooperative /worker-owned enterprise

An organisation owned by its workforce. It might have a mixture of commercial and social objectives. Typically has a strong ethical framework and democratic governance. This category encompasses more than 1.6 million organisations around the world with roots going back to the 17th century. Typically operates with a different legal structure from a profit-driven business. Social enterprise

An organisation dedicated to addressing a social or environmental issue, with its work funded through earned income rather than grants and donations. Emerged in the 1990s with different nuances country to country. Still not recognised or understood uniformly. Typically operates with a different legal structure from a profit-driven business. Non-profit / charity

An initiative dedicated to addressing a social or environmental issue resourced through grants and donations. Origins in 10th century Europe.

I believe societies’ efforts should now be focused on establishing Purpose-Driven Businesses, Cooperatives and Social Enterprises. This must be the new mainstream of capitalism, and this is where The Trampery is dedicating its energy. Hopefully, Evo Accelerator can make a small contribution to a much broader transition.

What do you think of my proposed “impact spectrum”? Is this a useful analysis or is it missing something vital? Let me know in the comments below, and we can continue the conversation.

The Trampery is London’s largest independent workspace operator. It’s a purpose-led business that delivers workspaces and accelerator programmes for entrepreneurs and people who want to make an impact. The Trampery is committed to playing a role in the shift towards a more balanced form of capitalism, supporting entrepreneurs, startups and scaleups who pursue social and environmental benefits alongside profit. Learn more here.