What is a social business?Â That is a good question that we have heard from numerous people.Â We address this question in this post.
Professor Dr. Muhammad Yunus (pictured above) is the founder of world renowned Grameen Bank has pioneered the concept of a social business, winning the Nobel Peace Prize for his work in 2006.Â In this book : “Â Creating aÂ World Without Poverty,” Dr. Yunus outlines the definition of a social business:
“A social business is not a charity, a non-profit or non-governmental organization.It is a business in every sense. It has to recover its full cost while achievingÂ a social objective. In its organizational structure social businesses are no different from profit-maximizing businesses (PMBs). The difference is rather in their objectives. While PMBs have a primary goal of profit maximization for shareholders; social businesses have a primary goal of creating social benefits for those whose lives are touched by it.”
Wow!Â That’s good stuff.
While there are few established social businesses today, we believe the future of capitalism depends on the creation and sustainability of them.
The Social Business Test
1. Identify the company’s mission in relationship to a social goal
2. Research steps taken by the company to actively and whole-heartedly pursue this mission
3. Weigh the positives of the company (ie people lifted out of poverty) versus the negatives (ie how much pollution is created)
4. Analyze the result, if positive, SocialEarth moves forward with a story on the company
Now, we know this approach isn’t perfect. But, the industry is young and needs some direction. If you have any ideas, please feel free to contact us.
Enjoy the blog!
- SocialEarth is a weblog which promotes social entrepreneurs, businesses, and ideas.
- Organization Type: For-Profit
- Website: www.socialearth.org
- Founder(s):Naiomi Bisram & Erik Eliason
- Location:Minneapolis, Minnesota, United States of America
- See complete company list here