In a nut shell a social enterprise is a business and non-profit hybrid. It runs like a business by selling a product or service in order to make a profit, but it earns the profit for the sake of funding its humanitarian or environmental mission. This is also known as the “double bottom line”, which is in contrast to the single bottom line—to make a profit—that a normal company has.
One advantage of establishing a social enterprise for the sake of a humanitarian effort, as opposed to the more traditional non-profit, is that it makes championing the effort more convenient. Because a social enterprise incorporates support for their humanitarian effort into the purchase of their product, an individual is able to get involved in the cause while they behave like a normal consumer. This type of aid provides an alternative to non-profits, which have to rely on charitable donations that require people to spend more money on top or in replacement of what they’re already buying.
Using our own company as an example of a social enterprise in action, if you’re a coffee drinker and you decide to give our Haitian Mountain Blend a try, in addition to satisfying your coffee craving your purchase will also help fund water projects in coffee growing countries. Our product and others like it allow consumers to kill two birds with one stone; they get a product they can use and the chance to help a good cause, all in the same purchase. This type of buying power is what we like to call “empowered consumption”.
One of the most well-known social enterprises is TOMS. TOMS sells shoes using a one-for-one model, which means that any time a customer buys a pair of their shoes TOMs donates a pair of shoes to a child in need. Another popular social enterprise is FEED Projects. They sell a wide range of apparel items, such as hand-bags and T-shirts, and included in every purchase is a set donation that goes towards addressing world hunger. For example, if you purchase their popular “FEED 1 Bag” then in addition to getting a cool bag you’re also providing a single child in Africa with school lunches for an entire year.
If you’re interested in discovering new ways to participate in empowered consumption then check out Roozt.com. Like popular social buying sites Livingsocial and Groupon, Roozt sells coupons that allow you to purchase items at a significant discount, except that all the items they feature are sold by social enterprises. What’s more, Roozt itself is a social enterprise and uses a portion of its profits to fund a humanitarian effort that changes according to the deal they are featuring.
Social enterprises are a small but growing category of company that offer a unique opportunity for buyers to exercise their consumptive powers not just for their own good, but for the world’s as well. We think that’s pretty neat, and hope you do to!