In the words of economist Milton Friedman, the business of business is business. Or is it?
There are now 55,000 social enterprises in the UK, contributing a combined £8.4bn to the national economy. As consumers become more aware of the wider impact their spending power has, the number of social enterprises worldwide is on the rise.
Instead of focusing solely on profit, these organisations seek to create social and environmental value too. Most businesses recognise that purpose is crucial to profit, but it is social enterprises that exemplify this shift.
Here, we look at seven social enterprises who are simultaneously providing goods and services while changing the business world for the better.
1) The Big Issue
The Big Issue is a fortnightly publication that aims to dismantle poverty through self-help, social trading, and business solutions. Launched in 1991, the magazine provides work to rough sleepers in the UK. Big Issue vendors buy copies for £1.25 each and sell them on at £2.50, keeping the difference. Since the social enterprise was founded, vendors have earned over £115m. Each year, 3,700 new people join the vendor network. The Big Issue has become a household name and now supports other social enterprises and charities through Big Issue Invest. The magazine itself also draws attention to social problems in its features and articles.
2) Grameen Bank
Another long standing social enterprise is Grameen Bank, which was founded in Bangladesh in 1983 following a research project into banking services for the rural poor. The community development bank provides microfinancing without collateral, which means that those in desperate need of financial help don’t need to pledge property or capital to secure a loan.
In 2006, both the bank and its founder Muhammad Yunus received the Nobel Peace Prize for their contribution to Indian socio-economic development. By 2011, the bank had amassed 8.4 million borrowers, of which 97 per cent were women. Equipping struggling entrepreneurs with the cash needed to expand their businesses has created a more vibrant economy and driven societal advancement.
3) Husk Power Systems
In rural, developing communities, power is often a luxury. The lack of reliable access is supplemented by harmful kerosene lamps, diesel generators, and in some cases expensive solar home systems. Without a flow of power, vital appliances like water purification systems and fridges can’t be used in the environments where they are needed most.
In response, for-profit social enterprise Husk Power Systems has built the lowest cost hybrid power plant and distribution network in India and Africa. Husk currently serves 15,000 homes and businesses with 100 per cent renewable energy, supplied by over 75 renewable energy plants. Customers can access power via a mobile enabled, pay as you go service which allows them to purchase energy as and when needed. As well as benefitting domestic users, Husk has also fuelled commercial improvements.
Diversity is difficult. AnitaB is a social enterprise supporting women in technology fields, and the organisations and institutions where they learn and work. The organisation provides programmes to help women reach their full potential at whatever career stage, wherever they are. The company’s namesake, Anita Borg, set up a digital community for female computing talent in 1987. Today, AnitaB works with businesses in over 80 countries, curating events, experiences, and an annual three day Grace Hopper Celebration – the biggest gathering of women technologists in the world.
In contrast to claims that social enterprises don’t perform as highly as conventional companies, AnitaB works with the likes of Airbnb, Amazon, Apple, Facebook, Visa, and DeepMind. Their industry partners include Cisco, Google, Microsoft, Intel, and Qualcomm.
Californian outdoor clothing brand Patagonia sets an example to all businesses – not just social enterprises. Founded in 1974, the brand’s first product was a steel piton for climbing which didn’t cause lasting damage to rock walls. Patagonia then branched out into sustainable, ethical apparel, and released a recycled fabric line in 2016. The certified B Corporation allocates one per cent of all sales to the preservation and restoration of the natural environment, and actively protests against campaigns or developments that are harmful to the planet.
Back in 2008 and 2009, when most businesses were reeling from the financial crash, Patagonia steadily increased its sales. Patagonia demonstrates the importance of purpose when it comes to profit, advocating a ‘story over product’ approach.
Kiva was set up in the US in 2005 to provide crowdfunded loans to financially deprived communities across the world. There are currently 1.7bn unbanked individuals globally without access to reliable, trustworthy monetary services. Kiva encourages business, social, and economic development by matching lenders with borrowers. This gives people and organisations the capital they need to acquire skills, equipment, and resources. 100 per cent of all crowdfunded loans are sent directly to the recipient, and lenders can decide where their money makes a difference, whether that be in the local area or halfway across the world.
7) Change Please
Ethical coffee chain Change Please was founded in 2015 with a view to solving London’s homelessness epidemic by taking advantage of the city’s booming coffee culture. By training homeless people to become qualified baristas, Change Please helps individuals to break the cycle of poverty at the same time as serving sustainably sourced coffee in 100 per cent biodegradable cups.
Initially, drinks were sold from vans and carts on the street. Today, Change Please is available in various commercial office spaces, Clapham Common tube station, and on Virgin Trains. The brand takes coffee culture and removes the bad taste – the product is so good, in fact, that it received two Great Taste Awards in 2017, and then again in 2018.
The increase in social enterprises shows that the requirements for business success have changed. Contrary to Friedman’s assertion, the business of business isn’t just business… It’s also the health of the wider societies that they operate in.
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