People label Beam in different ways. Some people wrongly call us a charity. We are not a charity, though we work with charities to collect Gift Aid on donations (as well as taking referrals of Beam members from charities).
Some people call us a "social enterprise". We prefer the term "social impact business" as it creates more clarity that Beam is a business.
So, what is a "social impact business"?
We define a "social impact business" as a business that generates revenue by creating positive social impact.
Many businesses create positive social impact as a by-product of their operations. But a social impact business has a business model that is based on solving social problems. A social impact business' very ability to survive depends on the creation of positive social impact.
In the case of Beam, the positive social impact we are looking to create and scale is to help a growing number of disadvantaged people to gain new skills and attain and sustain employment.
In short, a social impact business makes money by doing good - and in a way that can be measured.
Can a social impact business raise investment?
A well-run social impact business should use every lever it can to grow its social impact, including many that conventional businesses employ such as raising different kinds of finance like debt and equity and issuing stock options to employees.
But a social business needs a very different investor base to a conventional business, comprised of individuals and institutions that understand that the sole objective of the social impact business is to grow its social impact.
This means judicious selection of investors and preventing shareholders from ever leading the social impact business away from its social purpose through a variety of legal mechanisms. Beam will always ensure that it uses the right mechanisms to safeguard its social impact. Today, Beam has a "mission lock" in its articles:
"The company's objects are for the public benefit, to support disadvantaged, isolated individuals in such ways as may be thought fit, including raising money, awareness or support through an online platform or platforms."
Objects Clause, Beam Up Ltd Articles of Association
For many years to come, if Beam is successful in growing its social impact and revenues, it will be almost certain to reinvest those revenues in growing its social impact. But even further into the future, Beam - again, if it serves to maximise our social impact - may realize returns to investors.
Isn't it wrong for a social impact business to make money for shareholders?
For some, there is an inherent contradiction between positive social impact and making money - and that making money in the case of homelessness must be wrong.
Beam does not make money from homeless people and will never charge our members to join Beam. It rather hopes to make money by serving this group as a more empowering and effective solution than currently exists while addressing a problem that is already costing UK taxpayers over £1bn a year.
In fact, when the business model is correctly aligned with positive social impact, it is good when social impact business makes money for two reasons:
- Since positive social impact and generating revenues are aligned, it means measurable positive social impact has been created.
- The generation of revenues can attract new funding to the social impact business and its competitors, increasing the available funding to solve what are often very expensive and chronically underfunded problems.
The future of social impact businesses
Charities will always need to exist and must exist - many social, environmental and other problems cannot be solved through a business model. But it is the job of the "social entrepreneur" to search out business models that can solve such problems.
At Beam, we believe that in the next decade a crop of important new social impact businesses including Beam will reach global scale for the first time, benefitting hundreds of millions of often disadvantaged people through their work.