At Triple Impact Consulting, we strive to bridge the gap between sustainability and the private sector. One of the most prolific models for business that exemplify the intersection of sustainability and the private sector is the “social business.” Professor Muhammad Yunus, a Nobel Laureate and a pioneer in the field of microfinance, coined the term.
A social business enterprise is a business that is created to address a specific social problem such as education, poverty, health, technology access, and environment. It is inherently a non-loss company. This means that the company is a sustainable form of a business that aims to maximize social good instead of profits. Unlike a non-profit organization, a social business has investors and owners. However, investors only get their investment amount. No dividend is given beyond the return of the original investment. A social business is sustainable because it is not dependent on donations or on exterior grants to survive. This differentiates it from a nonprofit organization. The reason that it’s able to be independent is that the initial investment is enough to increase and improve the business operations. Any profits that are created are then reinvested back into the business. There are many successful social businesses that have been created across Bangladesh and other emerging economies. One such social business enterprise is Grameen Danone. This business sells very inexpensive yogurt that provides children with many of the key nutrients that they are missing from their diet in rural Bangladesh.
Social business enterprises can be an effective innovative way to address social problems that governments may fail to address due to budgetary constraints or other pitfalls. The growth in social business enterprises means that there are plenty of opportunities to get involved with them. One such example is the Social Enterprise Alliance Network