The True Cost of Cutting Purpose
When Budgets Are Tight, Purpose Is Your Strategic Asset
(Editor's Note: This post was originally published on March 4, 2025. As I migrate my work to this new platform, I've updated it to better reflect my current frameworks and sharpened my thinking from the original piece. The core ideas remain the same.)
Photo: Michael Hamments
Companies are cutting back. Sustainability budgets are shrinking. Equity and inclusion efforts are being quietly rolled back. Some of it’s economic; some of it’s political.
In Canada, major organizations are gutting their impact funding. Pride Toronto, one of the country’s largest LGBTQ+ events, has lost corporate sponsorships as companies retreat from commitments to equity and inclusion. These shifts are framed as financial decisions, but they signal something bigger.
It's tempting to think that stakeholder impact (centering employees, customers, communities, and the environment) is a luxury you can afford when times are good and cut when times are tough.
But if a company only prioritizes impact when the economy is strong, was it ever really a priority?
The reality is that stakeholder alignment isn't a luxury. It's a strategic choice. The companies that stay aligned, even when it's harder, are the ones that build trust, resilience, and long-term value.
If your company is feeling the pressure, the goal isn't to do everything. It’s to stay intentional about what matters most.
What Still Works When Budgets Are Tight
Five ways to stay stakeholder-aligned, even with budget pressure.
Be Honest About What's Changing. If you're scaling back commitments, say so. Silence erodes trust faster than hard decisions do. People don't expect perfection, but they do expect clarity. A simple statement like, “Here's what we're continuing, here's what's on pause, and here's what we're rethinking,” goes a long way. This isn't just a communication tactic; it's a governance practice that demonstrates respect for your stakeholders.
Stop Treating Equity and Sustainability as Extras. When companies start cutting, impact initiatives are often the first to go because they're seen as separate from core business strategy. The most resilient companies don't have a separate “impact budget”; they have an integrated impact mindset. The fix is to bake stakeholder priorities into everyday decisions.
- Hiring? Keep equity in mind, even without a dedicated team.
- Procurement? Swap one supplier for a more sustainable or ethical alternative.
- Product development? Make small shifts that move you in the right direction, even if you can't overhaul everything at once.
When impact is built into how the business runs, it doesn't disappear when budgets shrink.
Focus on Decisions That Cost Nothing. Not every stakeholder move requires a budget. Think beyond the balance sheet.
- Realign executive incentives to prioritize long-term impact over short-term wins.
- Keep employee well-being at the center of decision-making.
- Use your platform to advocate for issues that align with your mission.
Budgets can change, but values-driven leadership is a choice.
Keep Purpose in the Room. Even if your impact teams are smaller or gone, someone still needs to ask:
- How does this decision affect employees, customers, and communities in the long term?
- Are we prioritizing short-term wins at the expense of trust?
- If we can't do X right now, what's the next best step?
A purpose-driven mindset isn't about what you fund. It's about how you lead.
- Protect the Progress That Matters Most. You don't need to launch big new initiatives right now. But what's already working? What's at risk of being lost? What's still worth showing up for? Think of it as protecting a strategic asset. The progress you've made on stakeholder alignment is valuable; don't liquidate it for short-term gains. Rebuilding from zero is always harder.
What B Corps Teach Us About Resilience
Companies that take stakeholder commitments seriously don't abandon them when times get tough. They've built their purpose into the core of their business, not as an add-on.
Certified B Corps don't just talk about purpose; they embed it. The certification process is a roadmap for how to bake stakeholder commitments into your business's DNA, so they can't be quietly rolled back when budgets shrink.
Some of today’s most resilient companies are those that have already structured their business to be accountable to more than just shareholders. Instead of scrambling to justify impact spending, they're moving forward with clarity because they have built-in commitments and metrics that keep them aligned even in difficult times.
This is where the distinction between a B Corp certification and a Benefit Corporation legal status becomes crucial. A B Corp certification proves your commitment through rigorous third-party verification. It’s a powerful public signal. A Benefit Corporation legal status, on the other hand, makes that commitment legally binding, embedding stakeholder accountability directly into your company’s DNA. For investors and boards seeking ironclad accountability, especially when budgets are tight, that distinction matters.
If your business is feeling the tension between financial pressures and stakeholder priorities, looking at how B Corps operate can offer a roadmap. They show that purpose isn't a cost center to be cut—it's a strategic asset to be protected.
The Bottom Line
The choices we make now define the trust we build, or lose. The companies that navigate these moments with clarity and intention are the ones people trust when things stabilize.
If you are facing budget cuts and competing priorities, the question isn't “What do we need to cut?” It's “What is still worth showing up for?“