Social Businesses address social problems which when solved, can create ripples of joy throughout an economy. Like any other principle, the 7 Principles of Social Business define its purpose and how it operates. These are followed world over by organisations that either promote or run social businesses.
Below, we introduce Professor Mohammad Yunus Seven Principles of Social Business and give a glimpse of those who made it a point to follow and practice these principles.
1. Overcome Poverty And Other Social Issues
The first principle talks about social business as an odyssey for those who dare to overcome poverty or any associated problems dealt with in education, nutrition, health care, and environment. Such businesses should not be driven by profit maximization.
One social enterprise is a good example for this principle. Rural Bangladesh is mostly comprised of tin houses which make the scorching glare of the sun completely unbearable. Ashis Paul, a Bangladeshi social entrepreneur, made use of empty plastic bottles and turned them into air conditioners. Paul took it upon himself to integrate his knowledge and innovativeness in creating smart non-electric air conditioners, named Eco Coolers. They are now currently used in 25,000 households.
The project is free of cost for the consumers and enabled the decrease in temperature by 41F (5C) instantaneously. In some cases, the Eco Cooler can reduce indoor temperatures from a sweltering 86F (30C) to a comfortable 77F (25C).
2. Financial and Economic Sustainability
The second principle focuses on financial and economic sustainability. Social entrepreneurs should keep in mind that they aren’t allowed to take funds externally via grants or NGO assistance. Those who run the business are supposed to invest in it.
Kenya’s fishy fashion statement might prove this principle’s point. A 39 year-old Industrial Chemist Newton Owino, found a sense of amazement in his discovery through his business, Alisam Products Development and Design (Fish Leather Tannery). Through a pen, a pair of scissors, some glue and dyes, and an estimated 150,000 tons of fish waste, fish skins are made into a special kind of leather through which hordes of handbags, wallets, shoes, hats and jackets are produced. This project has led to reasonably priced leather merchandises for the locals and more job opportunities for the slum dwellers in Kisumu in Kenya.
3. Investors get back their investment amount only
In Bangladesh, USA and Canada, Wahid Hossain is famously known as the ‘Bow Tie Guy’. Being a Bangladeshi, his social venture, Tiger Bow, charms both foreigners and locals alike with empowered local artistic prints on his bow ties. The concept of Tiger Bow is one of communal value. They curate bowties with fabric sourced from Bangladesh (Katan), and the hands of local artisans that have been celebrating their culture for years. “These are bowties that when you place them around your neck, you will have a story to tell. A story of celebrating culture, a story of respecting that which is hand made, and a story of connecting to our roots as human beings,” Wahid shared.
This is where the third principle comes in. This principle talks about administering the return on investment. Due to the no dividend formula in social businesses, investors are allowed to take money only in their investment capacities. Taking money beyond their investment is strictly prohibited if one would like to claim their businesses as ‘social’. Tiger Bow does just that. It’s hard earned money is divided among the artisans and the company to make it sustainable.
4. When investment amount is paid back, company profit stays with the company for expansion and improvement
The fourth principle centers around earning more than the initial investment and to reinvest back in to expand and improve the business.
Seeing Hands is a social enterprise that provides training and employment opportunities for visually impaired people through massage therapy. With four operational clinics throughout Nepal, this organization provides a platform for the professionally-trained blind therapists. Asserting to the third principle of Social Business, this program enables part of the money to fund the training, employment and livelihood of more blind masseurs.
5. Environmental consciousness
Social businesses, principle wise, are environmentally conscious.
This is where the Sri Lankan social entrepreneur Thusitha Ranasinghe comes in. He had an innovative idea to produce paper from elephant dung. Rather than cutting down trees, he opted to follow the path of a ranger in Kenya who made a type of papyrus from elephant dung.
Starting from employing rural dwellers, saving the elephants, collecting elephant dung to mix it with waste materials in order to create high quality recycled papers, Ranasinghe is truly winning in the Social Business mantra.
6. Workforce gets market wage with better working conditions
The sixth principle is concerned about the workforce and how they should be provided greater market wages and better working conditions. This principle is applicable for all the above-mentioned organizations.
7. ...Do it with joy
“…do it with joy.” This statement must have been said countless of times by Professor Muhammad Yunus, social entrepreneurs themselves, or from the people who are passionate enough to contribute to the society and the environment as a whole, without the objectified profit motive.
An Indian high school dropout, Mr. Arunachalam Muruganantham, is the “Pad-man” who had the audacity to fight against blind Indian superstitious beliefs regarding menstruation by formulating low cost sanitary pad making machineries through his business, Jayashree Industries.
His pathway towards success had some societal thorns. His social entrepreneurial initiative started from his love for his wife, who couldn’t afford pads. The matter was perceived as grave when in his village, less than 10 women used sanitary pads. Others relied on rags or dirty clothes while most relied on sand, sawdust, leaves and even ash.
However, being poor didn’t deter him. Despite the societal ridicules and lack of proper volunteers in his experiments, he attempted to create a ‘uterus’ from a football bladder by punching a couple of holes in it, and filling it with goat's blood. He walked, ran, and cycled in his journeys, with the football bladder under his clothes.
While his success garnered proper health benefits for the rural women, he is known to do all of these, with joy. On several news clips, it was noted that his humor was and is relentless. He surely is the epitome of contributing to the society, with joy.
Overall, these principles are simple and are easy to follow. They are essential as they draw a distinction between social business and other businesses carried out in the name of contributing to social welfare.
Venturing into a social business is possible for anyone willing to embark on a journey of bolstered empowerment for the self and the grassroots.
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