In recent years, a new type of entrepreneur has emerged. No longer content to simply go into business for themselves, these entrepreneurs are finding fulfilling and profitable work by making their ventures socially conscious. Unlike a not-for-profit organization, social entrepreneurs are interested in affecting social change while also making a profit. Instead of donors and endowments, social entrepreneurs create a sustainable business model that can make money while powering social efforts.
The Underlying Principles of Social Entrepreneurship
In addition to creating a sustainable business model, there are a handful of characteristics that are key to social entrepreneurship.
Purpose – Social entrepreneurs are not doing a job solely to make money; they believe wholeheartedly in the task they have set for themselves and the goal they’re committed to achieving. The growth in this movement seems to be a reaction to the millennial desire for a career that is meaningful, not just a steady paycheck.
Profit – As previously stated, the key difference between these types of entrepreneurs and their non-profit brethren is profit. Social entrepreneurs believe it is possible to make a positive impact on society while earning money in the process. In most cases, they also believe in using a portion of these profits to further their social goal and increase their impact.
While social entrepreneurship may seem idealistic, the fact is that many consumers are becoming more socially conscious about the products they buy. Some purchasers are willing to spend an extra dollar or drive an extra mile to support a business that gives back to their community. This fact is reflected in the success of many businesses that have thrived through the social entrepreneurship model. Here are some success stories:
Toms Shoes – Blake Mycoskie
Toms works from a very simple principle: one for one. For every pair of shoes (and now eyewear) sold, Toms will donate one to a person in need. This philosophy may seem costly, but it was also pivotal to their success. Currently, Toms donates shoes to more than 60 countries, and per their website, they have donated more than 10 million pairs of shoes.
Falling Whistles – Sean Carasso and David Lewis
In an effort to bring global attention to the ongoing conflict in the Democratic Republic of Congo, Falling Whistles founders Carasso and Lewis sell metal whistle necklaces as a representation of “whistleblowers for peace.” Beyond their retail endeavors, Falling Whistles has also developed relationships with community leaders in the DRC to rehabilitate those who have been touched by the atrocities of war through education, art, sports, music, vocational training and more.
Hand in Hand – Bill and Courtney Glaab
According to UNICEF, more than 5,000 children die every day from diseases that could be prevented with simple hand washing. As a result, Hand in Hand donates a bar of soap and one month of clean water to a person in need for every corresponding purchase. The purchase of a bar of soap also saves 50 square feet of rainforest and is 100% vegan, gluten-free, organic, biodegradable and cruelty-free. All purchases are also shipped in recycled packaging.
Whole Foods – John Mackey
Whole Foods has become a game-changer in the entire supermarket industry, pulling in over 9 billion dollars of revenue annually and employing almost 60 thousand workers. While Whole Foods is a for-profit corporation, CEO John Mackey believes that business should be an agent for social change, not merely economic growth. He remains dedicated to several deeply rooted principles, including organic and sustainable agriculture, excellent employee benefits (and a salary cap on all executives) and microfinance loan programs for lower-income entrepreneurs.
The Solution Economy
A byproduct of this social entrepreneurship is the solution economy, in which business models will be designed to create public value and where bottom lines are measured in social value rather than simply revenue. With both of these ideas combined, society can benefit more widely from private-sector thinkers and entrepreneurial innovators banding together to solve problems that previously would have been left in the hands of small communities or the government.
By pooling the resources and knowledge of both the public and private sectors, some of the greatest minds from different walks of life can use their combined talents to solve social problems. Through the use of sophisticated technology, solutions can now be devised, designed and delivered faster and cheaper than ever before.
The rise of these two ideals – social entrepreneurship and the solution economy – signals a shift in not only the business world, but in the public consciousness. Businesses that continue to focus solely on the bottom line with no consideration for long-term consequences may soon find themselves elbowed out of the way by their younger, more nimble competitors who understand the impact and power of social goals and how it motivates socially conscious consumers.