Changing the World with Social Businesses
Posted on by September 24, 2009 by anders.abrahamsson
“By defining entrepreneurship in a broader way we can change the character of capitalism radically” – Muhammad Yunus
Social Business is a concept developed from 30 years experience of the Grameen buildup of Muhammad Yunus over the years. It emerged from a need where current institutions did not manage to fulfil social needs. Where public sector, private enterprises and charities have fell short to reach all the way to solve social problems, social business take a different stance. With the cause orientation found within charities, NGO’s, foundations and associations, and the efficiency, creativity, innovativeness and drive found within private enterprising, social businesses make positive social change and money at the same time. Thus, it releases itself from third party dependence for financing, and gets allowed by its investors and owners to focus primarily social return on investment as its main cause.
Prof. Yunus has already shown the effectiveness of this new type of business: his clear focus on eradicating extreme poverty combined with his condition of economic sustainability has created numerous models with incredible growth potential.
Muhammad Yunus defined the Grameen Social Business seven principles as follows.
The 7 principles of Grameen Social Business
1. Business objective will be to overcome poverty, or one or more problems (such as education, health, technology access, and environment) which threaten people and society; not profit maximization
2. Financial and economic sustainability
3. Investors get back their investment amount only. No dividend is given beyond investment money
4. When investment amount is paid back, company profit stays with the company for expansion and improvement
5. Environmentally conscious
6. Workforce gets market wage withbetter working conditions
7. …do it with joy
With these principles, it distinguishes itself more clearly than social entrepreneurship in general. Social entrepreneurship is addressing the same social needs, but only look on the way things gets organized – “in an entrepreneurial and innovative way”. It does not focus on what type of organization it is – it could be any kind of ”third sector” institution as mentioned above – charity, NGO, a foundation or association, a cooperative or a business. With the social business concept a focus is put on the long term self sustaining of the organization created due to its own revenue generation.
The concept of social business is developed more deeply in Yunus’ book ”the Future of Capitalism”.
/Anders Abrahamsson
Anders is a serial sustainopreneur and has been the driving force in the conceptual development of Sustainopreneurship, and published its Wikipedia article in 2008. He has published a number of publications on this topic, and is currently authoring a popular book on subject, one blog post at a time. Founder of SLICE Services and Publishing.
