A social enterprise is a business like no other. There are many definitions for social enterprises, but the explanation we provide here is the most accurate.
Many people equate social enterprises with non-profit organizations, this is not correct. Non-profit organizations are exactly that, organizations that do not create a profit, but are involved in work surrounding a social cause or mission that benefits the end user. Funded by philanthropists, governments, or charitable individuals, these are legal entities that manage on strict budgets, are governed by voluntary board members, and must meet legal regulations and requirements.
Commercial for-profit businesses are capitalistic organizations that work strictly to maximize profit for the owners or shareholders, but these businesses do not include a social mission as part of their business strategy. Commercial enterprises come in many forms, from sole proprietorships to publicly traded corporations. Though many corporations have an interest in furthering a social cause, and many do, typical for-profit businesses fail to do so.
Social enterprises are the businesses that fall between the two realms. We define social enterprises as for-profit businesses that help to solve a social problem or create a positive social impact in the world. Social enterprises are better businesses. There is no legal definition of a social enterprise, but as business evolves we see a great need to do better with business.
Financial scandals through the ages, and especially during the 2008 decline caused many to question the ethics of corporations. Large environmental disasters created by mismanagement and corporate greed have led to additional questions. There has to be a better way.
Quintessential entrepreneur Richard Branson, creator of the Virgin empire, and a proponent for social enterprise said it best when he stated, “If you aren’t making a difference in other people’s lives, you shouldn’t be in business – it’s that simple.”
Principled social entrepreneurs attempt to move their businesses in the right direction, but sometimes the social mission gets lost in the day to day hustle toward profit maximization, and remains a wish. Social business can be more than a wish. It is a possible reality.
At White Line we believe that business can be profitable and still have a purpose that serves humanity. There is plenty of space to create positive change while creating a profit for shareholders, and this type of business ethic means everyone wins.
In his book Building Social Business, Nobel Peace Laureate, and father of the micro finance concept, Dr. Muhammad Yunus describes Social Enterprise as, “The new kind of capitalism that serves humanity’s most pressing needs.”
Yunus goes on to describe the need to reinvest the profits into the business in order to move the social cause forward. Yunus’ ethos sets out seven inspirational principles as a guide to social enterprise, however he stresses the lack of return except for the initial investment, no dividends, no interest.
At White Line we believe we can push that envelope one step further. A social enterprise can be a fully capitalistic business that can serve the needs of the shareholder, as well as the needs of the social cause. This requires a White Line strategy.
White Line businesses can be any business, large or small, that aligns itself with a passion to improve lives. An enterprise that acts ethically, and with good governance. You may be laughing at the irony right now, but believe us, it is possible. Staying above the white line may not be the easiest thing to do, but it is damn rewarding for everyone involved. We love building better businesses. Contact us we’ll show you how to turn your wish into reality.
photo credit Sir Richard Branson: <a href=”http://www.flickr.com/photos/38867623@N05/8054894308″>Sir Richard Branson in Vancouver</a> via <a href=”http://photopin.com”>photopin</a> <a href=”https://creativecommons.org/licenses/by/2.0/”>(license)</a>
photo credit Dr. Muhammad Yunus: <a href=”http://www.flickr.com/photos/67033974@N00/5851860963″>IMG_3698</a> via <a href=”http://photopin.com”>photopin</a> <a href=”https://creativecommons.org/licenses/by/2.0/”>(license)</a>