Social enterprises follow a different set of business practices than most companies – they combine mission and profit to resolve important problems in their community or world. They often combine the best parts of what non-profits and regular companies have to offer by focusing on the triple bottom line: money, environment, and social impact.
Purpose Driven Profits
Just like for-profit companies, social enterprises seek to make a profit and grow their business. However, the profit serves their ultimate goal of furthering their mission. By avoiding nonprofit status, these social enterprises are more nimble because they can avoid the paperwork and board approvals that 501c3 organizations must manage.
As a for-profit company, social enterprises are not reliant on donors in order to further their mission, so do not need to spend as much time fundraising. Instead, usually their mission and profit are intertwined. Some companies, like Solo Eyewear, give back in the same category of the goods they sell, in Solo’s case providing free sight-saving surgery to people in need, financed by profits of their eyewear. Other companies, like Vavavida, work both sides, incorporating economic shifts from their supply chain by sourcing their accessories based on fair trade principles of commerce as well as giving back to programs that work towards gender equality issues in developing countries.
People want to know about the products they use, the food they eat, the services they purchase. Awareness of what is purchased and how it fits into the consumers’ personal mission is now more than a trend. Being tied to a mission for social good helps attract customers and build brand loyalty. social enterprises continue to flourish because of giving back, not in spite of it.
Social enterprises ensure they leave a very small footprint on the environment. They often pioneer new advances in environmental issues. By using sustainable resources they reduce waste and conserve the environment.
While some social enterprises have their entire mission focused around saving the environment, many businesses just try to play their part in helping the world. By using recycled packaging, sustainable production methods, and green resources, social enterprises help reduce environmental impact.
Positive Social Impact
People that support as a customer and/or work as an employee for social enterprises enjoy a shared belief in the company’s mission and are able to play an active role in the solution offered.
The social enterprise movement has passed beyond being a trend and is a mainstay of business – which is good news for the world. It is the new normal and is only getting bigger, attracting satellite industries to it. Now, top level universities offer programs and classes dedicated to social enterprise companies and how to run one. Attorneys have gotten in the mix and are specializing in providing legal advice and representation to social entrepreneurs. The American government has even decided it was time for social enterprises to get their own tax code.
It’s important to know that worldwide, women are the most affected by poverty. In fact, the poorer the country, the greater the discrepancy between men and women in rights, in economic power and in education. According to a UN report from 1995, 70% of the world’s poor are women. It’s an astounding, bleak and dismal statistic but that means that they also are the group most in need of change and support. It is also where social enterprises could potentially have the greatest impact.
All this is to say that the social enterprise is the future of commerce. At their core, these companies are created to care about the products they sell, the customers the serve, and the world they are a part of. It’s a wonderful time to be part of this swelling, lasting movement.