The Idealist Guide to Social-Impact Organizations

At Idealist, we’ve been working closely with a variety of social-impact organizations for many years to help them find passionate and talented employees, volunteers, and interns who want to work in the sector. However, over the past few years, we’ve seen an explosion of different kinds of organizations working for social change, such as hybrid companies, Benefit Corporations, and more.

To help you get a sense of the ever-evolving landscape our social impact, we’ve put together a short list of organizations working for the greater good. What distinguishes these organizations from each other isn’t their commitment to social change but rather, how they secure funding and how they are structured. Whether you're deciding to pursue a nonprofit job, apply for a CSR role, or simply find a group to volunteer with, any one of these organizations can support your goals.

Traditional nonprofit

• What it is: Unlike businesses which exist to make money for their owners or shareholders, nonprofit organizations exist to promote a cause or to provide a public service. It’s okay for nonprofits to earn a profit, but those profits must then be reinvested into the organization rather than disbursed among stakeholders or owners.
• Who’s doing it: Millions, literally, with almost 140,000 right here on Idealist. A classic example is the March of Dimes, which leverages individual donations, grants, and corporate sponsorships to support its research and advocacy in preventing premature births.
• Pros and cons: Traditional nonprofits work well when the community being served cannot pay for certain services or benefits, as these types of organizations can raise funds from foundations and individuals in the form of tax-deductible donations. However, the reliance on donations and grants may put these organizations in a perilous state when funding decreases or simply disappears. And while they don’t have to give their profits to shareholders, they are subject to oversight by their board of trustees and a variety of federal and state regulations.

Nonprofit with earned income

• What it is: Whereas many nonprofits usually rely heavily on grants and donations to stay afloat, some nonprofits organizations incorporate a source of earned income to diversify their revenue streams by offering a product or service.
• Who’s doing it: Nonprofit performance venues are common organizations that blend earned income with donations. The Woodruff Arts Center, for example, presents a variety of visual and performing arts to the Atlanta, Georgia community, and supplements their corporate, foundation, and individual support with ticket sales to hundreds of events every year.
• Pros and cons: Nonprofits with an earned-income branch lessen their dependence on gift income while retaining the tax advantages held by all nonprofits. However, the power needed to run the business side of operations (in Woodruff’s case, tasks like marketing, sales, and customer service) can put a strain on program staff.

Hybrid organizations

• What it is: The hybrid model links a for-profit company with a nonprofit organization. These types of organizations often reflect the company's commitment to having a positive social or environmental impact, as demonstrated by their nonprofit arm's mission.
• Who’s doing it: The Mozilla Foundation handles the development of the open-source web browser Firefox, while the Mozilla Corporation—its for-profit subsidiary—arranges revenue-sharing agreements with its search partners. The foundation brings in around $200,000 in charitable donations annually; the corporation earns over $100 million.
• Pros and cons: While linking for-profit and nonprofit can be, in many ways, the best of both worlds, hybridization requires the formation of separate boards and management staffs, and conflict of interest issues can easily arise—possibly raising eyebrows at the IRS.

Impact investing

• What it is: Instead of investing for the sole purpose of turning a profit, impact investment firms lend cash to businesses working for social or environmental good so both parties have a chance to invest in positive change and seek financial gain.
• Who’s doing it: Boston Impact Initiative, based out of Boston, Massachusetts, is committed to building a "financial, social and political power for entrepreneurs of color to close the racial wealth divide" by investing in local enterprises owned and controlled by communities of color.
• Pros and cons: Many conventional investors overlook businesses with “good” directives, leaving them ripe for impact investors. However, social returns can be difficult to quantify and present in the same language as financial reporting, and that can complicate communication between parties. Also, impact investing deals are often relatively small, less than $1 million, which turns some larger-scale investors off.

Benefit corporation

• What it is: A benefit corporation or a “B Corp,” as they're often referred to, is a business that helps to solve social and environmental problems. B Corp certification is fairly new on the scene: the first state to pass legislation recognizing it was Maryland, in 2010. Companies wishing to attain B Corp certification must prove to the certifying organization, B Lab, that they have a corporate purpose to create positive change for society and the environment, and that they consider the impact of their decisions not only on shareholders, but also on their workers, community, and the environment. Flexible purpose (FlexC) and low-profit limited-liability (LC3) companies are two variations on the B Corp theme.
• Who’s doing it: Outdoor clothing and equipment retailer Patagonia was certified as a B Corporation in 2012. Smaller companies like Chicago creative firm Mightybytes and Philadelphia-based software developer Azavea have also come on board.
• Pros and cons: The B Corp label can be a compelling marketing tool for businesses, and the B Corp network is notable for offering their services to one another free of charge or for substantial discounts. But the certification process can be long and costly, and must be repeated every two years.

For-profit organization with a mission

• What it is: A company that operates as a typical legal corporation, but with a social or environmental mission integral to its product.
• Who’s doing it: Seventh Generation creates green cleaning products that are easy on the Earth, with the explicit mission to inspire a revolution that nurtures the health of the next seven generations.
• Pros and cons: Companies with higher motives than profit alone have great built-in marketing fodder, and are candidates for partnership with the new crop of impact investors. However, proving social impact to investors is always a challenge, and companies can face internal and public struggle if not all parties agree on the mission’s place in the company's priorities.

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There are countless ways that social-impact organizations drive meaningful change in the world today, no matter how they're structured. What's important to remember is that, during your job search, learn about how the organizations that interest you are making a difference in the world; finding that common denominator will help you have purpose in your career (and make it easier to nail that common interview question: Why do you want to work for us?).