From Cost Center to Revenue Generator: How Social Value Economics Boosts Your Bottom Line

Social Value Economics: The act of buying and selling has the power to propel social change.

“The Social Value Economics construct is one of the most innovative ideas I have come across in the social impact space, and indeed, one with the potential to achieve meaningful social impact at scale.” - Ioannis Ioannou, Associate Professor of Strategy and Entrepreneurship for London Business School
“The Cort/Krosinky paper described a new model of gaining a sustainable and scalable financing source for addressing the wicked problems of our times.  Social Value Economics argues against the existing model of scarcity, where society and business are in a zero-sum game.  Scarcity leads to a belief that society and the environment only benefit at a direct cost to business and wealth.  Using ScaleWith as the originator of this new theory, Social Value Economics inserts society into every business transaction with a win-win for everyone involved.” - Adlai Wertman, David C. Bohnett

From scarcity to abundance:

Rewiring the economic and corporate systems to transform social impact from a cost center to a revenue generator. Social Value Economics is backed by global experts.

Professor of Social Entrepreneurship & Founding Director of the USC Marshall Brittingham Social Enterprise Lab

“There’s a multi-trillion-dollar funding gap to achieve all 17 UN Sustainable Development Goals by 2030. From poverty and inequality, to climate change and world hunger, our social and environmental challenges pose an existential risk to everyone, and businesses are certainly not immune. That’s the beauty of Social Value Economics—it’s designed with the needs of our communities, the planet, and businesses all in mind. Paul Polizzotto has unlocked a remarkable opportunity at a time when the world desperately needs it.” - David Choi, Professor of Entrepreneurship and Director of the Fred Kiesner Center for Entrepreneurship at Loyola Marymount University
“In a time when we need to take urgent action to achieve a better and more sustainable future, it is of paramount importance to rethink the role of business and explore new models of corporate sustainability. The ScaleWith platform, based on the Social Value Economic construct, is a great example of an innovative and sustainable business model that can offer businesses the opportunity of making a real impact with every single business transaction, with a material alignment of CSR initiatives to business strategies.” - Paolo Taticchi, Professor (Education) in Strategy and Sustainability & Deputy Director (MBA and International) at University College London (UCL) School of Management

Social Value Economics

On a macro level, sales taxes, corporate taxes, property taxes, and payroll taxes, etc. are not enough to adequately fund governmental efforts to combat our profound challenges, including climate change and its repercussions, poverty, and lacks and inequities in education, healthcare, and mental health services. And at the bottom of the economic “funnel,” there’s not enough money left over after this subtractive process to meet the ever-growing need.

The lens of scarcity also prevails in the business sector, where accepted doctrine dictates that social impact is, by definition, a cost center. As a result, Sustainability, Foundation, and CSR budgets are created at the bottom of the corporate “funnel,” from the limited profits left over after business expenses and taxes are deducted. The result is that commitments to Net Zero, for example, are delayed for decades—decades too long.

ScaleWith has developed a suite of software solutions to fulfill the fundamentals and promise of this new economic construct, so corporations can operationalize, productize and automate its principles at scale.

Social Value Economics leverages the most fundamental activity of commerce—the transfer of goods and services for value—into an engine for positive social change.

Critically, this goal is accomplished without corporations needing to spend any new money. In fact, Social Value Economics actually transforms social impact into a revenue generator for both sellers and buyers in every business-to-business and business-to-government transaction.

Social Value Economics moves up in the economic and corporate structures the place from which social impact is funded. Instead of looking to the limited resources at the bottom of the economic and corporate funnels, places of scarcity, Social Value Economics targets the approximately $100 trillion at the “top”—in the business-to-consumer, business-to-business, and business-to-government transactions that are conducted globally every year. Social Value Economics creates access to this abundant and self-sustaining pool of resources by creating more business value for both sellers and buyers. In common business parlance, Social Value Economics is an efficiency play:

The Fortune 500 spends approximately 70-90 cents of every dollar brought in, on cost of goods sold. An estimated 10-30 cents of every dollar is spent on Selling, General, and Administrative expenses (SG&A) alone. In other words, corporations spend roughly 10-30% of every revenue dollar trying to make a dollar. It’s impossible to pin down these figures precisely, because inefficiency and waste are endemic in traditional approaches to sales and sourcing and procurement. Therefore, it’s also impossible to know the exact ROI and the most effective and profitable allocation of those 10-30 cents.

By contrast, organizations that pivot from tired, old-school sales tools (marketing events, volume discounts, rebates, extended warranties, and free shipping) to apply social impact as a sales incentive and differentiator have quantifiably higher win rates, shorter sales cycles, and better client relationships and retention. By using social impact as a sales incentive, their existing client acquisition dollars work harder and better in the 21st century economy, producing an improved ROI from every already-budgeted dollar.

Importantly, Social Value Economics is not charity or philanthropy. It’s a proven business model that creates an entirely new funding stream for social impact, completely and entirely separate from corporations’ CSR, Sustainability, Philanthropic, and Foundation activities.

The day is coming when Social Value Economics—applying social impact to transactions as a way to improve business outcomes—will simply be the way business is done.  Ubiquitous. Expected. Not because of regulatory or consumer pressure, but because through Social Value Economics, sellers and buyers derive more business value.

That day cannot come soon enough. Book a demo to learn more about ScaleWith's revolutionary approach to revenue growth.