A business that measures success in terms of doing social good – is totally dedicated to solving social and environmental problems.
Once a social business is making a profit, it returns the original investment to the original investors without interest or dividend and pours all of its profits back into expanding the business to make a positive difference in the world.
A Social Business is a non-loss, non dividend business.
The bottom line for a Social Business is to operate without recurring losses while serving the people and planet – particularly the most disadvantaged.
After investors recoup their investment – further profits go to expand the business – i.e. do good for more.
Investors invest for the same personal satisfaction they get when they give to charity – but choose to invest in Social Businesses because their money does far more good and/or they can recover their investment.
A Not for Profit requires constant fundraising and is always in jeopardy of no longer being able to fund programs – it is not sustainable without donations.
A Social Business is a business which generates enough income to keep it going – it is sustaninable.
Social Business Examples of Social Businesses Business to do Good
Manufactures and sells high quality nutritious food that the poor can afford
Designs and markets health insurance that provide affordable medical care for the poor.
Develops renewable energy and sells it at a reasonable price to rural communities
Recycles garbage, sewage and other waste materials that would otherwise pollute in poor or politically powerless neighborhoods.
Social Business Things That Are The Same About Profit Maximizing Business & Social Business
Organizational Structure – employs workers, creates goods and services at a price consistent with objectives.
They are both Capitalistic ventures
They compete with one another in the marketplace
Social Business Things That a Social Business is NOT
A charity – if the business does not cover its costs (i.e. at least break even) it is not a Social Business
A business that pays dividends to investors
Social Business vs. Charity Hand Up vs. Hand Out
Charity is not the answer to poverty
Charity helps poverty continue
Charity creates dependency & takes away individual initiative to break out of poverty.
Unleashing the energy & creativity in each human being is the answer to poverty
Social Businesses unleash that energy
Social Business Comparison of For Profit & Not for Profit & Social Businesses For Profit Business Not for Profit Business Social Business Example IBM Red Cross Grameen Danone Product Computers Disaster Relief Nutritious Food Initial Funding Investors Donors Investors Ongoing Funding Investors/Profits Donors/Income Income/Profits Investors Get Dividends Nothing Original Investment Business Purpose Make Profit Do Good Do Good Owned By Stockholders Non-Profit Investors Profit/Loss Profit Goal Loss Break Even – Non Loss Profits Go to Investors No Profits Reinvestment
Social Business Reasons Both Conservatives and Liberals Support Social Business
Social Business is the ultimate Capitalistic program
It does not require government funding
It is self-sustaining, creates jobs, increases taxes paid
It brings out the best in people
It helps individuals improve their economic condition and to escape poverty.
Social Business Competition Between Social Businesses Is about pride, about establishing which team is best able to achieve the social objective. Competitors remain friends. They learn from each other. They can merge with each other to become a stronger social force. They are happy to see another social business enter the same area of business, rather than getting worried.
Social Business Produced By Marty Jenkins Respectful Dialogue Programs [email_address] 805-964-2550 September 2008