According to the Social Enterprise Alliance, a “Social Enterprise” is a business “whose primary purpose is the common good. They use the methods and disciplines of business and the power of the marketplace to advance their social, environmental and human justice agendas.”
Social Enterprises can be for-profit companies, B-Corps, or non-profits, like BeadforLife, that generate some portion of their funding by selling products or services. We at BeadforLife have embodied this approach more than most. Over the last 10 years we have funded over three quarters of our programs and operations by selling beads and shea products.
Social Enterprise – The Best of Both Worlds
Tweet ThisBusiness – done right – has a lot to offer in solving social and environmental problems. As one of the most powerful forces on the planet, we know that if business does not take into account the common good, we will never solve some of the world’s biggest problems. If you want to help the world and you have a product or a service that people are willing to pay for, that is a powerful foundation. As long as you continue to evolve with the demands of the market, your efforts to change the world will be sustainable without having to go after grants or donations, which are unpredictable.
Non-profits – done right – have a lot to offer. For decades, social and environmental change efforts have rested almost exclusively in the non-profit or government realms. There are advantages to being able to focus on your programs without also needing to be an expert salesperson. There might be times when you want to expand an important program or start a new one, and being able to get a grant or a donation to fund that allows you to start serving people much more quickly than if you needed to find a new product to sell or a way to increase your current sales.
Perhaps most importantly, non-profits give people the opportunity to give. From our experience with tens of thousands of supporters, most people want to help solve the world’s challenges. For some, that might mean packing up their lives and joining the Peace Corps in some far-flung place. For most people, however, that’s just not possible. Sending a donation to an organization they believe in gives them an important role in the work and a connection to a world greater than themselves.
There are also some problems that won’t be solved by selling our way out of them. Many of these problems, like global poverty or climate change, affect us all. Non-profits offer a way for the world to respond to complicated and geographically diverse issues even if there is no monetary profit to be made. The social Return on Investment in this case is worth it.
Maybe Someday the Distinction Won’t Exist
Imagine if all businesses measured their success by their positive impact on the world rather than just by profits given to their shareholders.
Imagine if all non-profits were able to fund their most critical operations through their own sales, and donations and grants could be used for expanding and serving more people?
The old boxes no longer fit. What do you think about the changing models for businesses and non-profits? Let us know in the comments!
Ivan – you are absolutely right that a social enterprise model adds a unique element to the hiring process. You need to find someone with the business skills, but who is also passionate about your mission. Thanks for your comment!
I think much as the models may change over time, what remains outstandingly unique about social enterprises is the drive to address a social problem above profit. Yes you do business but the business is driven much more by the desire to provide a solution than to make profits.
As the models change, it will continually be important for managers of social enterprises to identify members of teams who share the same goal and have a passion for locally led social change/solutions.