Buzzwords are fun to toss around, but can deaden the impact of the idea behind them. One of the most popular ones in the business world right now is “Social Enterprise”. It’s so popular that Michigan has embraced it legally in the form of the B-Corp, or Benefit Organization. A B-Corp is a company that incorporate social mission into its for profit model, and differs from other Corporations in their accountability, transparency, and purpose. 28 States now offer this form of incorporation, but a company doesn’t have to be a B-Corp to be involved in Social Enterprise.
According to Carl Frankel and Allen Bromberger, Social Enterprise can be defined as “an exciting, blended model driven by the desire to create positive change through entrepreneurial activities”. The company best known for this model is Toms Shoes. Their “Buy One Give One” model has paved the road for entrepreneurs who want to do more with their business.
GR Current, the incubator I spend a lot of time at, houses a good deal of Social Enterprise organizations. In particular; Sisu Global Health, PhotoUp, and Food Circles. They all aim to affect their respective landscapes through a positive growth model. And in order to do so, their companies need to make a profit.
Take Sisu Global Health, for example. Their work specifically targets Sub-Saharan Africa by creating medical devices that WORK for that region, both with regards to culture and available resources. The resulting products are sold for a nominal amount to area hospitals and nonprofits targeting the region, not only for the sustainability of the company, but for the value a purchased product carries over a ‘gift’.
This type of business is increasingly common for Millennials, especially after a recession that made us all rethink where we put our money. In fact, they are more likely to stay at a job that is fulfilling, even if it is less pay. Millennial are also more likely to start their own business. The result is a generation of social entrepreneurs, looking not just to own their work, but to use it to impact the world in a positive way.
With the growth of Social Enterprise comes a greater global impact. That is, as a Social Enterprise business grows, so too does its reach. When Toms Shoes started in 2006, their only goal was Buy One Give One. For every pair of shoes that was bought, a pair would be given to a person ‘in need’. Not only has the growth of the business meant a 1:1 growth of the giving of shoes, it has also aided Toms in adding other programs to their model.
By building Social Enterprise into ones business model, financial growth is no longer the only measure of success. A Social Enterprise or B-Corp company has the liberty to drive its plan toward greater outreach, and the consumer more than just a choice between pricing. When the aim to ‘do good’ is added to the competition of business, the act of surpassing a competitor now has added depth.
For further reading, check out this slide show created by Stacy McCoy, co-founder and CEO of Give to Get Jobs: