The world of investment banking, financial services and management consulting has always had a one-dimensional image: profit maximization. Since the 2007 recession, the financial services industry has seen a decline in trust from the public, given the widespread lack of responsibility shown during the mortgage loan crisis.
In response to harsh criticism and a less than ideal image, many of these companies have funneled millions into corporate social responsibility programs that donate to charities, invest in poorer communities and create scholarships for the underprivileged, among other things. In the past few decades, however, a new business sector has begun to emerge: social impact consulting.
According to Statista, the global consulting industry is estimated to be worth more than $250 billion and is still quickly growing as new consulting fields, such as political risk and technology consulting, become more popular. Among these new fields is social impact consulting, which focuses on aiding non-profits and social enterprises. Rather than helping businesses simply make more money, social impact consulting firms help companies by maximizing the good they do for society.
Unlike the average corporate social responsibility program, social impact consulting is a business that makes money. In many ways, corporate social responsibility programs are purely reputation boosters. Many such programs simply donate money or promote internal change. They promise either to limit companies’ ecological footprints or to ensure proper treatment of employees, rather than providing external services to the public. Social impact consulting, on the other hand, makes money from the good it does for the world.
Many independent companies such as The Bridgespan Group and TMI currently exist, and social impact consulting branches can also be found within more well-known consultancies, such as Bain & Company or Deloitte. In many universities, there are even pro-bono student organizations that consult for non-profits and social enterprises.
180 Degree Consulting and Enactus are both student organizations with branches in universities all over the world. They involve thousands of millennials who are “more concerned with fulfillment and purpose than earning a fat paycheck” and provide millions of dollars‘ worth of consulting to both local and international organizations, including The Salvation Army and Kiva.
As social impact consulting continues to grow, the future of non-profits will change for the better. More and more young people are choosing to make careers out of doing social good as they realize that it’s possible to make a decent income doing so. Given these trends, non-profits can expect to optimize their businesses and continue to work for the public good.
– Henry Gao