This is the eighth post in a series of conversations with business leaders from some of the most innovative companies in the world. The conversations were held around the Social Innovation Summit in Los Angeles. At the Summit, entrepreneurs, business people, philanthropists and individuals convened to discuss the present and future of purpose and business. For this interview I spoke with Justin Spelhaug, GM of Technology for Social Impact at Microsoft.

Simon Mainwaring: Justin, what are you most excited about right now in terms of Microsoft’s purpose and impact?

Justin Spelhaug: Well first, there is always a humble realization that we need to find a way to do more. Philanthropy and CSR are important investments that have high social impact. But they need to be complemented with social businesses that have a high impact and a reasonable economic return, that are sustainable and, most importantly, scale. Pick poverty, and look at the hundreds of millions people suffering. We need mechanisms to scale to that challenge. We have a Microsoft philanthropy team and we have a CSR initiatives, but that recognition was the genesis that got us saying, “We need to lean into this social business lever harder.”

SM: So how is Microsoft developing social businesses?

JS: We’re building two mainstream social businesses. One is an Airband group that focuses on putting together creative partnerships to solve the broadband divide that we have in rural America.

The second is the Technology for Social Impact group. That group focuses on helping nonprofits digitally transform to drive mission-led impact. We’re bringing together a multidisciplinary team that has engineering, sales, business development and philanthropy. It needs to all come together under one leadership structure so we have the agility and speed necessary to deliver impact with the organizations we’re serving.

Finally, we created an integrated P&L financial system that allows us to reinvest any incremental profits we generate from any of our work into two things. One, more innovation and support for nonprofits directly. Two, philanthropies. That means funding things like affordable housing, digital skills investments and AI for Good investments. We are making this a scalable engine. Not only to fuel more innovation for the sector and reach the nonprofit sector with technology, but also to fuel additional philanthropy that our company can drive.

SM: Are you looking at social enterprises that are for-profit businesses for this new model of scaling impact?

JS: Today, our focus is on nonprofits and the United Nations. But doing good is not defined by your tax code. So we’re looking at programs for social businesses. We haven’t mainstreamed any yet. We’re piloting a number of different concepts including a partnership with Ashoka in India and France to help social entrepreneur building technology solutions successfully incubate and scale. We’re thinking about how we can create a globally scalable approach to engage social entrepreneurs with affordable technology and support.

SM: Is there a specific focus for what you’re doing that falls into the SDGs?

JS: For Microsoft, the SDGs represent a vital, global effort to address these issues that are consistent in spirit and principle to our company’s mission. That is why we are working to empower underserved and underrepresented people to foster inclusive economic growth, and why we are putting technology in the hands of those who are addressing our most pressing societal challenges so they can have a greater impact.

SM: What is the unique role you’re going to play in scaling impact?

JS: Our unique capability to scale impact is as a platform company. We’re trying to liberate data to put it to use to drive mission. Now, how are we doing that specifically?

The technology ecosystem supporting nonprofits is quite fragmented . So, we started by saying, ‘We need a common point of view. We need a common data model that expresses the way nonprofit processes should work from a best practice point of view.’

We’re collaborating with a broad range of industry partners including organizations like Blackbaud, Classy, Fluxx, Avanade and more. We built it in partnership with some of the top nonprofits in the world like USAID, DFID, Bill & Melinda Gates Foundation and others. We published this common data model on GitHub in an open source format. We’re encouraging development across the sector.

SM: So how do you optimize this data model for nonprofits? How do you do that from a standards perspective?

JS: The common data model expresses end-to end entities and attributes for most nonprofit processes. The model is aligned with a results framework at the center, which at the core allows organizations to better understand the impact of their programs and the beneficiaries they serve. It spans all core nonprofit process from program management, to volunteer management, to finance and operations.

We leverage this Common Data model across all of our solutions from large organizations to small. On the big end of town, we have Dynamics that large organizations are implementing. For example, we’ve built on Dynamics with Team Rubicon. We started there with volunteers. They had grown from 10,000 volunteers to about 80,000. Now they’re almost at 100,000 volunteers that respond to disasters. The challenge is, when you respond to a disaster, you need to send the right volunteer with the right skills and our Dynamics volunteer management capability now supports Team Rubicon and other organizations. This is a supply chain problem. Another example is the International Rescue Committee (IRC), which is implementing the finance and operations.

However, some 80 percent of nonprofits are less than 10 people and have no IT support. For small organizations, we’re building PowerApps into Microsoft Office 365 and the Power platform. That integrates Microsoft Office 365 and enables specific bite-sized workflows.

The strategy is to liberate data and put it to use for a mission, backed by a common data model that’s published as an open source standard. We’re trying to facilitate and get the industry to build towards and inform it. Underpinning that are our partners. We’re trying to unlock an army of partners that can serve nonprofits from Mumbai to Minnesota and everywhere in between by providing the services that they need.

The final layer is a unified licensing and discounting structure for nonprofits. We’ve unified how we discount all of our technology for nonprofits to make it affordable. We donate some of our technology. Together, it creates a very affordable value proposition.

SM:  There are still things you can’t control. For example, how do you predict and prepare for the next famine event?

JS: AI has an incredibly important role to play here, and it’s important that we don’t look at AI as a shiny object. AI is now getting to a place where, because of the cloud, you can actually run the computational processes in a way that’s scalable and affordable. Now how do we apply it to mission?

Here’s an example. We’ve been partnering with the World Bank to look at the way they’re calculating and creating models to look at food insecurity. Food insecurity isn’t an issue of purely climate change or human population movements or politics or conflict. It’s a function of all of those things. We’re working with them and other industry partners on creating a model that does a better job predicting food insecurity. AI is an incredibly important tool to solve that problem. Through these models, the Bank hopes to be able to release funding ahead of a food insecure event to ward off famine before it occurs.

SM: We need collaborative solutions because the problems are so interconnected.

JS: We’re working together across the sector, because the problems are tremendous. You’d be arrogant if you thought you could solve all of it. There’s enough innovation space for everyone.

SM: Are you participating because you’re solving for something that may directly or indirectly affect our business?

JS:  I think that business interests intersect with social interests. Our business interest is to demonstrate the power and potential of AI. But our social interest it to help solve these challenges. We have limited resources, so we apply limited resources to have the greatest intersection of opportunity on all sides.

SM: Do you think we’ll get to a point where purpose is actually an innovation driver?

JS: Yes, especially when you look at the amount of jobs that are unlocked by solving and addressing the Sustainable Development Goals and the economic value in terms of new markets that are created. However, It will take time. Every publicly traded company is under pressure, quarter to quarter. The long-term vision is to create a world where our companies can prosper, people can prosper, the environment can prosper, and those three things are not at odds with each other.

SM: What would you say are those drivers of that change?

JS: One thing is passion and ethics. It also makes economic sense in the short term. It makes even more economic sense in the long term. Doing good is good business.

Simon Mainwaring: So, if you could characterize a role that Microsoft is going to play in five years, what would it be?

Justin Spelhaug: We are going to continue to align our business strategy with the core social and environmental challenges of our time and create the platforms and tools that innovators will need to unlock solutions at scale.  Our investment in Technology for Social Impact is just the beginning.

Click on this link to learn more about Microsoft’s work with Team Rubicon: