Organisational Development

Finding Your Way in the Purpose Economy

Published: August 10, 2015

Read Time: 8 minutes

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In this article we reflect on role of purpose in the non-profit sector. Drawing on thinking from Aaron Hurst’s book The Purpose Economy we consider how non-profit organisations can embrace this emerging trend to drive impact.

The influence of purpose as a driving force in our society emerged, from the presentations and discussions that were engaged in at the Better Boards Conference 2015, as a theme at the top of many people’s minds. Delegates, speakers and sponsors embraced the purpose aspect of our theme for 2015 Charting New Horizons: Governance with passion and purpose. Stories of how delegates have found purpose in their non-profit work and the ways in which their organisations are helping to foster purpose in communities were shared over lunch and between sessions.

In his opening keynote presentation, Aaron Hurst spoke about how cause is only part of the equation for an organisation. Aaron described how the Purpose Economy is the latest driving force on our society and economy. He suggested that we are looking for purpose in our life more and more and that this desire to drive impact and community growth is bringing about social and economic evolution in the form of the Purpose Economy. He argued that to generate real impact we need to have purpose in our work – and this isn’t necessarily connected to the cause of the organisations we work for.

In his book The Purpose Economy, Aaron talks about how purpose is a verb rather than a noun. Purpose can be found in the type of action you are undertaking rather than the specific cause or aim it is directed towards. He says that “purpose is about how you approach your work” (p.84) and that this can be found doing just about anything. A starting point for determining how you find meaning and purpose in your work is taking the free personality quiz to determine your purpose type and purpose drivers on Aaron’s website.

Aaron suggests that groups, communities and organisations coming together with a shared purpose have more hope of “moving forward or creating meaningful change” (p.4) than those who simply coalesce around a shared cause. When speaking at the Conference, Aaron argued that it is “almost impossible to get purpose in a cupboard on your own – it’s about authentic relationships”. The Purpose Economy drives the creation of businesses and communities typified by values such as by prizing sharing over ownership and relationships over efficiency.

Although the non-profit sector is at the core of what makes up the Purpose Economy, Aaron warns us that: “it is by no means the only sector driven by the provision of services to improve lives, inspire personal growth, or expand community” (p. 41).

Some larger corporations are recognising this trend and expanding their horizons to develop purpose-focused strategies and frameworks. This rings true with what we are recognising about the growth of for-profit companies trading on their altruism and in markets which were once the sole purview of the non-profit sector. While some of these are economic decisions rather than social ones, Aaron does identify some examples such as Pepsi and Deloitte, which have both incorporated the idea of purpose into their company’s philosophy.

But what does this mean for non-profit organisations? How can we shape our non-profit organisations to ensure they are in line with the emerging Purpose Economy and riding the wave, rather than resisting change?

Aaron suggests that although all organisations have a purpose, a Purpose Economy organisation actively “creates purpose for its employees and customers – through serving real needs, enabling personal growth, and building community”(p.147). The success of the organisation will be instrumentally impacted by the capacity of staff and leaders to embrace purpose in their work and to create purpose for clients, customers and stakeholders.

The non-profit sector does have a head-start in this, but we won’t be alone for long and we need to think big and take risks to make use of this advantage and not get left behind. The theme of the Better Boards Conference 2015 was devised to encourage participants to consider creative, innovative and entrepreneurial options for their organisation’s future, to look beyond where the sector is now and think about what it could be.

Further Thoughts on the place that purpose plays in non-profit organisations

Several of our other speakers at the Better Boards Conference 2015 spoke about the role of purpose in governing non-profit organisations. We asked a few of them to share their thoughts with us about the role purpose plays in the non-profit sector, how it affects the impact that organisations have and how they operate. Below is their practical advice based on their experience working in and with non-profit organisations and insights gained or shared at the Conference.

A Social Sector organisation’s purpose should be its key differentiating factor and also be central to the DNA of the organisation. In your organisations you have a wealth of people – who give of their time and talent to do the most good they can – they are all motivated by purpose. For them and all your stakeholders, purpose should not be forgotten ever. In every decision, ask the question, will this further our purpose. Also never forget that, “the foundation for doing good is doing well” – so ensure that a focus on purpose is balanced with running your organisation effectively.” – Lali Wiratunga

Lali Wiratunga, National Marketing Manager at Westpac Social Sector Banking, spoke on finding the balance between keeping a strong central focus on your organisation’s passion and having the flexibility to adopt commercial enterprise models.

When I’m speaking with not-for-profit CEOs and board members my mantra always is ‘If you dream it you can make it happen’. That’s always a great starting point but in recent years with the funding environment and sponsorship getting tighter dreams have to be backed up with solid plans for viable income streams and communicating your value proposition to key stakeholders: corporates, donors and government.” – Jo Scard

Jo Scard, Founder and Principle at Fifty Acres, presented on constructing multi-source income streams.

Purpose is central to the success of organisations by guiding strategy and enabling effective leadership. It helps leaders to inspire others to achieve a common goal and it supports decision making in environments which are complex, dynamic, ambiguous and often unpredictable. It is simple: Not-for-profit organisations unable to define and communicate a compelling purpose need to question their viability and consider reinventing themselves to be more successful. The conversation often needs to start there but is frequently avoided until it is too late.”– Ingo Susing

Ingo Susing, Partner at Leadership and Succession Partners, spoke on leadership succession management and the board’s role in overseeing it.

Non-profit organisations are established to meet a need in the community and it is this need that defines the organisation’s purpose. At its core, the role of the purpose is to direct an organisation ensuring it is accountable and that it pursues its activities to ultimately meet the needs of the community and fulfil its commitments to its stakeholders. In pursing that purpose, organisations must be mindful of the changing needs of the community and its financial and operational sustainability. If the needs of the community have changed then following the organisation’s original purpose means the organisation may become redundant. Or if following its purpose means that the organisation is unable to remain sustainable then the organisation may be unable to operate.” – Joanne Redburn

Joanne Redburn, Director at NFP Lawyers, spoke on whether the ideal of fulfilling your organisation’s passion and purpose and ensuring its success and sustainability are mutually exclusive.

All organisms and organisations are compelled, by an adaptive evolutionary impulse, to negotiate change and to grow. Purpose is what energises and determines the directionality of that impulse. In the contemporary ‘climate’ of (VUCAD) volatility, uncertainty, complexity, ambiguity and disruption, individuals and institutions are being challenged to examine their purpose-informed strategy. Does it align Ego self with Eco Self? Can purpose balance profit, people and planet? An Indigenous elder and director said to me last week, “Good governance comes from walking backwards into the future”. The Conference deepened that observation – what would purpose-informed strategy, its execution and its outcomes, look like if practiced directors, fit-for-purpose, exercised due diligence that included signing off on behalf of our forefathers, and our children, and their children?” – Robert Gordon

Robert Gordon, Director of Programs at Board Accord, spoke on mindfulness in the boardroom and negotiating conflict between the CEO, the board, the CEO and the chair.

Finding a purpose outside of oneself is the reason why I joined the NFP sector and has been the driving force ever since. People need to be inherently driven by something in order to fulfil their goals and I am finding time and time again people who work in this space do so not because of the money (trust me!) but because of their desire to see a better world for everyone. That purpose drives them and that fire in turn allows them to make great impact in their chosen areas.” – Steph Lorenzo

Steph Lorenzo, CEO and Founder of Project Futures was the opening keynote presenter at Sprout Summit 2015. Steph spoke about her journey in starting a non-profit organisation.


Former Researcher
Better Boards

At the time of writing Julia was a writer and researcher at Better Boards. She has a passionate interest in the non-profit sector, particularly its legal and regulatory complexities and she follows all news and developments in this area keenly. Prior to joining Better Boards, Julia served as an intern at Philanthropy Australia. Julia has a Bachelor of Arts from the University of Melbourne, majoring in Political Science and English Literature.

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