The Rise of The Purpose-Driven Business: What it Is & Why it Matters

Being a purpose-driven business is a relatively new concept that has gained renewed significance in the past decade. Many businesses, especially those with diversified customer bases, have at least pondered how they can adopt a broader purpose and communicate it to stakeholders.

The problem for many of these businesses is that they lack the systems to turn their purpose into concrete actions that actually boost their brands. As millennial and Gen Z workers make up an increasing share of the workforce, this disconnect can no longer be ignored.

Keep reading for some background on what a purpose-driven business really means in the 21st century and how your company can become one in the eyes of employees, consumers, and investors.

Table of Contents:

• What Does ‘Purpose-Driven’ Mean in Business?
• Why the Shift Towards Purpose-Driven Organizations Matters for Your Company
• 3 Examples of Purpose-Driven Business Endeavors
• How Does CSR Cultivate a Purpose-Driven Workplace Culture?
• 4 Tips for Building a Purpose-Driven Business
• Find Your Company’s Purpose with Purpose-Driven CSR Software

What Does ‘Purpose-Driven’ Mean in Business?

In business, being “purpose-driven” means your company has dedicated time and resources to programs that improve communities and society at large.

Every business that has ever existed has a base purpose: to make a profit. In that sense, you can consider any business to be a purpose-driven enterprise. Since the mid-20th century, though, self-described “purpose-driven companies” have prioritized pursuits that don’t directly benefit their bottom line.

Businesses with purpose often take part in programs associated with CSR (corporate social responsibility) and ESG (environmental, social, and governance), which many people consider a subset of CSR.

Activities that purpose-driven companies participate in to demonstrate their values can include:

• Corporate philanthropy, including employee donation matching
• Corporate grants
• Employee volunteering programs
• Assistance or hardship funds for employees

Why the Shift Towards Purpose-Driven Organizations Matters for Your Company

Having a purpose for your company is more important than, say, getting favorable news coverage or recognition from the local Chamber of Commerce. For many companies, having a purpose-driven brand is essential for long-term survival.

Recent polls, studies, and analyses have repeatedly borne this out:

• According to a Deloitte study, 9-in-10 Gen Z and millennial workers say working for a purpose-driven employer is important for their satisfaction and well-being in the workplace.
• A staggering 86% of U.S. consumers polled in 2017 said they expect companies to have positive impacts on racial justice, the environment, and social issues.
• More than three-quarters of modern investors expect businesses to have clearly defined corporate purposes.
• Solid majorities of millennial (63%) and Gen Z (64%) consumers say they’re willing to pay more for a product if they knew it came from an environmentally conscious company.

3 Examples of Purpose-Driven Business Endeavors

Here’s how three companies leveraged their products and services to lift up communities in need.

1. Colgate’s Bright Smiles, Bright Future (BSBF)Program

One of the world’s most recognized toothpaste brands touts its BSBF initiative as having reached more than two billion children across the globe since its creation in 1991. The program’s primary aim is to educate kids about good brushing habits and other parts of healthy dental hygiene. Colgate also partners with organizations to hold free dental screenings and provide low-cost treatments.

2. Glossier’s Aid to Frontline COVID-19 Workers

In the early days of the COVID-19 pandemic, Glossier, a popular beauty company, began receiving requests to make a new product—one that soothes cracked skin from excessive handwashing. The company met the moment by developing a new hand cream.

Glossier went a step further, though, and donated the first 10,000 units of the product to healthcare workers who were forced to lather up many times per day. 

3. Toast’s Fight Against Food Insecurity

Toast POS is a cloud-based platform that provides software solutions to hospitality companies, primarily restaurants. Like Colgate and Glossier, Toast participates in CSR programs associated with its unique industry.

Through Toast.org, its charitable arm, the company partners with dozens of food banks, community gardens, and other organizations working to address food insecurity. It also offers a robust employee donation-matching program, with a 48 percent participation rate in 2022.

How Does CSR Cultivate a Purpose-Driven Workplace Culture?

In short, CSR programs transform words into deeds and corporate purpose into practical works. They are one of the most effective ways to increase employee engagement.

Modern-day consumers and workers are no longer content with empty words from companies when it comes to higher purposes. The rise of ESG certifications and CSR reporting frameworks has made it imperative for companies to actually carry out impactful deeds. 

4 Tips for Building a Purpose-Driven Business

Getting a CSR program off the ground is probably easier than you think. You don’t have to immediately build an enterprise-level operation—starting small, yet deliberately, is a recipe for long-term success.

1. Encourage Employee Volunteering

Corporate philanthropy is an important part of the CSR culture for many companies. Maximum employee engagement, though, only happens when workers get involved on the ground level.

A great way to accomplish that is by letting your employees organize and manage their own volunteering initiatives. These programs are also great for fostering camaraderie.

2. Let Your CSR Software Do (Most of) the Work

There’s no reason that CSR platforms should make life harder for administrative staff. If your company has used legacy CSR software in the past, you may be used to the burdens like monthly reconciliations, batched donations, clunky tools, and hidden fees.

A modern CSR platform like Groundswell automates processes and offers self-service CSR actions so HR doesn’t get stuck doing mountains of paperwork.

3. Engage Deskless Workers

Workers who are forced to access CSR portals exclusively on desktop computers will simply not bother to participate. More employees are on the go, and they need mobile apps that actually work.

Groundswell has the industry’s only five-star-rated CSR app, available on both iOS and Android. It has all the features of our desktop apps and ensures that remote and deskless workers don’t feel left out.

4. Make Reporting Easy and Impactful

A common issue with legacy CSR software is that clients don’t have easy, quick access to program data. They may have to pay extra for reporting capabilities or wait for the platform’s support team to provide them with exports.

Groundswell’s reporting dashboard features real-time updates so you aren’t operating off of last quarter’s data. 

We make it easy to visualize data and identify areas for improvement. Our platform works with many types of HRIS software, letting you drill down on key fields and segments. 

The best part? Executives and investors get CSR data as soon as they need it.

Find Your Company’s Purpose with Purpose-Driven CSR Software

Groundswell believes that every company, big and small, has an important story to tell. Your company’s purpose will be critical to your competitiveness and impact in the coming years.

We’d be honored to partner with you to help tell your company’s story. Your personalized demo is waiting.