Fourth Sector | Cozy Meaningful MeetUps

We might all agree there are critical challenges facing today’s world… climate change, rising inequality, mass displacement, demographic shifts, to name few. This is the reason why we chose the Fourth Sector as this week’s topic of a Cozy Meaningful MeetUp. As one of our core values is collaboration, we see the great necessity for a greater collaboration of public (government), private (business), and social (non-profit) sectors in order to address stated challenges.

As explained on WEF’s launch of the Fourth Sector Development Initiative, on the one hand the boundaries between the classic three sectors are blurring and on the other hand there are millions of organization that do not exactly fit the classic differentiation. Hybrids between nonprofit and for-profit are creating this new space called the Fourth Sector. It is an ever emerging landscape of organizations that has been growing for decades on the intersections and is now drawing focused attention and indeed quite a bit of hope and promise.

In our discussions of the Fourth Sector we first learned what is the Fourth Sector and we questioned if new government regulations should be required, how to measure or not. Should the Fourth Sector be the new way of doing business? There for no changes should be required? What are the tax implication to the companies? We felt there should be benefits to the Fourth Sector economy given they have a clear social-community aspect and are not shareholder driven. We highlighted the importance of education, it is not enough to change government or business regulations if the consumers are also in the loop. Will this new way of business work in countries which government corruption is still present…

Fourth Sector organizations are about behaving more purposefully in all aspects. More and more stakeholders, from CEOs to consumers, prefer to pursue a more responsible, conscious and sustainable path. Moreover, more and more leaders are taking their social responsibility seriously.

On this evening we opened a debate on what ‘for-benefit’ could stand for. Besides doing good and making money and being a sort of social enterprise, for-benefit is about doing something truly conscious and to avoid being just another “green washing”. Two great examples of companies that we mentioned are the outdoor clothing manufacturer Patagonia and fashion brand Matea Benedetti.

We shall avoid separating social entrepreneurship from entrepreneurship and rather integrate social values into entrepreneurship. [Alvaro Cuesta]

During our conversations we examined the minimum standards of being a for-benefit company; what are the metrics to measure the impact and how can it be measured. We also discussed the need and existence of potentially incentivizing systems (e.g. tax benefits).

On the one hand we highlighted the point and importance of corporations, especially in different economies, and on the other hand importance of governments. Companies thrive in the lack of government support and government can rely on corporations to innovate.

Governments have to play a bigger role in elevating consciousness. [Enrique Aznar]

Companies have an opportunity to elevate the collective level of consciousness of their people, by identifying their true purpose and focusing on aligning their actions to their purpose. Governments could incentivize good corporate behavior and help Society understand that doing the right thing is the right thing to do.

Being a new topic for many of us, we diverted a bit from Fourth Sector, touching the point of disruptive and tech companies. Focusing on sharing economy and its influences on economies, the questionable positive example of Uber in Brazil, as one case. Despite the great convenience, safety and lowering carbon footprint in the cities, it generates low-paid jobs and became a monopolist force. We also learned how Airbnb started as an option to find affordable accommodation when traveling and helping people to supplement their income during the crisis, which in turn has lead to a negative effect of increasing rent rates.

Can a business, which starts out with a positive mission, on doing good in business ends up causing a negative effect? [Theresa Fedel]

In addition, is it a good or bad thing that the clothing sector takes advantage of low wages in third world countries? Some say at least they have a job that would not have otherwise, is that good or bad? And what about Apple, offering 'spiritual objects', whilst abusing of programmed obsolescence, producing its goods in China, under low labor rights (self-claimed not) and fostering children addiction in technology, is one example.

Moving to more ‘traditional companies’, such as Coca-Cola to Pepsi, how can we help them to bridge towards more positively purposeful organization? How can they break the cycle?

Last, but not least, we could all agree that change always starts with access to information and education. It is not about business, but about us to building positive business and bringing up conscious customers.

Few references from our participants to check: