When you think of the phrase ‘social enterprise’, thoughts of a blue bird and Mark Zuckerberg may come to mind. However, the phrase goes past companies such as Facebook and Twitter to describe ones that operate with the objective of addressing social and environmental issues. This can be anything from providing children from impoverished countries with shoes, providing access to clean water, to giving small businesses around the world loans so that the owners can support themselves. This goes further than businesses selling organic products which are better for the environment, with social businesses introducing their social and environmental action as their bottom line.
Activism in Business is not a New Idea
Despite the recent spike in these businesses, the idea of social enterprises is not a new one. In fact, Enactus (formerly known as SIFE, or Students In Free Enterprise) was established with at its core in 1975. To this day, around 1600 universities around the world, including our own UNE, compete based on their efforts for the betterment of society through entrepreneurial action.
Arguably the godfather of the idea of social businesses is Muhammad Yunus. And how do we know that people thought his ideas were good ones? He won a Nobel Prize for applying them in 2006. Starting Grameen Bank, ‘the bank of the poor,’ in 1976, Yunus provides a line of microcredit to the very poorest people under realistic and easy terms. It is often difficult in a lucky country such as Australia to remember that being poor doesn't mean not being able to afford the next console or computer, but not being able to afford food and shelter.
The Current Worldwide Movement
Today’s advancements of the internet and social media have seen Muhammad’s idea explode with organisations such as Kiva.org allowing the average person to lend relatively small amounts of money to budding entrepreneurs from developing countries. Some businesses have even adopted the ‘1:1’ rule. That is, for every one product of theirs bought, they will donate one to a person in need. For example, ‘Toms’ shoes was catapulted into the spotlight after revolving around this idea. If tackling environmental problems is more your cup of tea, organisations such as Envirofit International are working to increase energy efficiency and reduce pollution in developing countries.
In fact, often social enterprises consider economic, social and ecological issues – the triple bottom line.
Capitalism vs Activism
Let’s take a step back for a minute and address a few questions that may be burgeoning in your mind.
Aren’t businesses inherently bad for the environment, driven mainly for profit? Can Capitalism and Charity really be integrated together? While some individuals may think of only profit, it can be difficult to know where draw the line. How much profit should a social business gain from their activities? If a business is generating millions of dollars of profit and only contributing a small portion of this to their social cause, then there will inevitably be some backlash from the public.
The main difference between charities and social enterprises is that often charities depend on donations to survive, whereas social businesses generate their own sources of income. The moderate profits are then used to further their activist objectives.
So, if you’re studying at UNE to start your own business, remember that it’s possible to make a living whilst helping to change the world.
- Joanne Fernandez