Social Business

At the moment I am in the middle of reading Creating a World Without Poverty: Social Business and the Future of Capitalism by Muhammad Yunus (the man that is known for starting micro-lending banks). I wish so much that I had started reading it earlier!! The man is a genius! He writes that while many non-profits, NGOs and foundations do good work in our society, the fact that they can only survive through donations can make them unstable and unsustainable. Also, leaders of these types of services end up dedicating a great chunk of time to finding and raising this money—time that could be spent in the pursuit of the project’s true goal of serving society. Instead, we should be looking at creating programs and projects that are self-sustaining (aka. over time they can support themselves). 

For Yunus, the answer to the world’s humanitarian issues is to combine this idea of bettering society with the self-sustaining idea of business. This can be done in a few different ways. One way would be to start a business that deals with a social need but does not see profit as its main objective. While some profit is necessary to allow for expansion and betterment of services, this idea of making as much money as you can to please your personal bank account and your stock holders is not at the first concern. He gives the example of a social business that,

“manufactures and sells high-quality nutritious food products at very low prices to a targeted market of the poor and underfed children. These products can be cheaper because they do not compete in the luxury market and therefore don’t require costly packaging or advertising, and because the company that sells them is not compelled to maximize its profit.”

Another type of social business is to set up what we would consider a normal “profit-maximizing” business, but this business is staffed and eventually owned by the poor or oppressed people of society. This type will allow the poor to take matters directly into their own hands, giving them the opportunity to use their own skills and knowledge to work their way out of poverty.

I have been thinking a lot about this idea of social business lately, and it very much intrigues me. I have even been trying to apply the idea to my work here in Nicaragua. While the micro-lending bank in which I work has proven to be (although not perfect), a great example of social business put into practice, the rest of project of Proyecto Generando Vida does not seem as stable. Our director spends a lot of time finding donors each year to cover the costs that the many other programs we offer consume. Therefore, I have been asking myself, ‘what could we do to make our project more sustainable?’ I actually thought of a few ideas, but with my lack of business background, I don’t yet trust that they could actually work.

 But the fact that I am so fascinated and inspired by this concept of social business is making me think about whether or not I would possibly like to try something in this area in the future…? Does anyone know of a social business school? Haha

-Jana

P.S. I would like to give a special thanks to my Dad who gave me that book to read, along with the “Case for Social Enterprise” packet that he just sent me in the mail. If you read this, Dad, I would love to talk to you more about how you have been trying to incorporate this idea more into ACH!