Earn with kindness
A social enterprise is an organization that applies commercial strategies to maximize improvements in financial, social and environmental well-being—this may include maximizing social impact alongside profits for external shareholders. Social enterprises can be structured as a for-profit or non-profit. They can also take more conventional structures. Social enterprises have both business goals and social goals. As a result, their social goals are embedded in their objective, which differentiates them from other organizations and corporations. A social enterprise’s main purpose is to promote, encourage, and make social change. Social enterprises are businesses created to further a social purpose in a financially sustainable way. Contrary to popular belief, profitability and positive social impact are not mutually exclusive. It is, in fact, possible to build a successful company and do good.
A “for-profit social enterprise” bakes social impact mission directly into its business model. Doing good is the core of the business, not just something that happens along the way. For a social enterprise, growth is a means to greater impact.
The for-profit social impact model is the model of the future. There are four reasons why:
First, as a for-profit business, a social enterprise is more sustainable than a nonprofit organization that must rely on grant money, donations or federal programs alone. As a for-profit model, you control your own density.
Second, for-profit business can scale in ways other organizations cannot. The incentives of the company are designed such that a greater impact directly correlates to a great profit.
Third, customers, investors and business partners today want to know that the companies they choose are doing more than just providing a product or service. They look for companies that are doing good. They will feel a special connection to companies whose values align with their own.
Fourth, social impact companies have an advantage in hiring and retaining staff. Top job candidates weigh many things when deciding where to take their skills. Salary alone is not enough. They seek companies whose values and goals align with their own.
As a for-profit model, you control the curriculum and funding of the program. The incentives of the company are designed such that a greater impact directly correlates to a great profit. Investors and business partners today want to know that the companies they choose are doing more than just providing a product or service. They look for companies that are doing good. They will feel a special connection to companies whose values align with their own.
Social enterprises don’t happen accidentally. They require planning and commitment. New companies can get it right from the start. Established companies can transition over time. Either way, it turns out, “doing the right thing” may be the best business decision you ever make for your company.