"Business is a very beautiful mechanism to solve problems, but we never use it for that purpose. We only use it to make money. It satisfies our selfish interest but not our collective interest."
- Muhammad Yunas (Nobel Peace Prize Laureate; Social entrepreneur; Father of microfinance; and, Definer of social business.)
Before we Begin…
Hello World! This is officially my first blog post and boy oh boy do I have an exciting first topic for you! *drumroll* I want to tell you about SOCIAL ENTREPRENEURSHIP! But more specifically, what is a social enterprise? And, some examples of really cool social entrepreneurship models that I’ve come across from around the world.
This has been my life for the past 2 years and I absolutely love every minute of it. I love the fact that non-profits/ charities/ NGOs can adapt various business models to make them-selves more sustainable. And, vice-versa, for-profit businesses can adapt sustainable social models to make positive impact around the world. Most excitingly for me, is that idea that you can combine both business and social to create a business (for-profit or non-profit) to drive social impact –sustainable and solving huge social problems!
The Current Landscape
When most people think “Social” and “Impact”, they think non-profit and charity. They think of organisations that are generally funded by grants and donations. Organisations that are constantly holding their hat for donations, or starting new fundraising campaigns to keep themselves going for another year. They think of the starving kid in Africa because these organisations are forced to tug on those heartstrings and appeal to the emotions of donors and supporters.
Charities and non-profits have yielded some great results in the past and will continue to do so in the future. There will always be a need for these types of organisations for certain issues (this is another topic I’m planning on writing about), however if we want to see truly transformational change, we need those in a position to make a social impact to become sustainable. They need to offer real value to customers (who are no longer donors) in exchange for their funding (read: Revenue) while delivering a sustained social impact.
Enter the Social Enterprise
The main reason I chose to start my blog with this topic is that when I go out and talk to people about my work, I often come across different (mis)understandings of what a social enterprise actually is. So, for the purpose of future posts that I plan on writing, you can consider this post ‘Social Entrepreneurship 101’.
A social enterprise can be considered:
- A for-profit business that does a bit of social on the side or a for-profit business that has an off-shoot department/sub-business that works towards solving a social issue (this is actually closer to corporate social responsibility (CSR)).
- An organisation that doesn’t make a profit, but is sustainable and puts its social cause above the drive for making money.
- An NGO or charity that is supplementing their usual income (grants/donations etc) by charging for their services or selling products.
- One of the most interesting models is that of a social business - it’s basically a business that is created to solve a social problem. Profits from the business are reinvested in to the business itself, always with the aim of increasing social impact. Most importantly, a social business is financially self-sustainable.
This definition may seem broad – and that’s because it is. I have deliberately taken a broad definition of a social enterprise because it is interpreted differently around the world and I want to include all types of socially innovative/ interesting models.
In all of these different definitions of what a social enterprise is, they all have one thing in common: an organisation that is applying business strategies for social impact.
To spark your imagination about the incredible possibilities of social entrepreneurship, here are a few different models of combining social and business:
- Buy-one-donate-one model – TOMS / Zambrero
- Buy-this-and-contribute model – IKEA / Cotton On / thankyou
- The sustainable-supply-chain– The Body Shop / Ben & Jerry’s / Undress Runway / The Honest Company
- Volun-tourism – MAD / The Dorsal Effect
- Catering to the bottom-of-the-pyramid business model – SaniShop / Aakar Innovations / LaunchPad / Kiva / Barefoot Power / Grameen UNIQLO
- Creating services/ products for nonprofits/ charities/ NGOs – Tech Soup / Start Some Good / Milaana
- Empowering the disadvantaged through economic opportunities – NOX Dine in the Dark / Sala Bai / Jamie Oliver’s FIFTEEN / KOTO / Streat / Dignity Kitchen / The Big Issue
- Creating/ using tech for social purpose – Ware / Embrace / A Liter of Light / Solar Ear
- Using your current skills/ core competencies to create social impact – DBS Bank / Conjunct Consulting
- Our-business-supports-a-social-cause– UNIQLO / Dukes at Ross House
These are some of the more popular models I’ve come across, but for a more in-depth look at all the different possibilities, check out this awesome website done by Verynice who have attempted to "document every business model in social enterprise, ever." (By the way, Verynice are a design consultancy social enterprise that does 50% of its work pro bono).
Innovative Social Entrepreneurs always seem to be inventing new business models to tackle previously untenable social issues, which brings me to the most exciting part…
Social Impact communities around the world are almost always overwhelmingly open and sharing, because the right people are in it to make a difference regardless of ego. Each of these new innovative business models is typically being applied to one specific Social issue, need or niche – but when shared in a community of Social Innovators, a new idea or model often forms the catalyst for another Social Entrepreneur to re-think monetisation in their own space. Innovation begets innovation, change begets change.
So, if you’ve come across any interesting models make sure to share them in the comments - you never know who may be reading!
To create a good business is to solve a problem. Why not use your skills to see if you can solve a social one?
"My greatest challenge has been to change the mindset of people. Mindsets play strange tricks on us. We see things the way our minds have instructed our eyes to see." - Muhammad Yunas