Entrepreneurs are motivated by different things to start their business. Some run after the freedom of being their own boss and making a profit out of their passion. Others are fuelled by a desire to change the world while making a living.
If you belong to the second type we mentioned and want to connect to your life’s purpose while making the world a better place, social entrepreneurship is what you’re looking for.
The Difference Between Social Entrepreneurship and Non-profit Organisations
Non-profit organisations (NPOs) are also known as non-business entities. They operate for a collective and social benefit rather than generating a profit for their owners. Revenues that exceed expenses must be committed to the organisation’s purposes.
Contrarily to non-profit organisations, Social entrepreneurship is a for-profit endeavour that positively impacts the community, society, and the world. A social entrepreneur explores business opportunities that would address social issues, solve community-based problems, and change the world.
How Can Entrepreneurs Change the World and Make an Impact?
Changing the world is the goal of many entrepreneurs. Donating money or food is certainly admirable, but there are other ways entrepreneurs can use to make a positive impact:
Impact investing is an investment strategy that aims to generate financial profits and create a positive social or environmental impact. It seeks to reduce the negative effects of businesses on the social environment. The type of impact that results from impact investing differs from one company to another. It’s common, however, to help the less fortunate or invest in sustainable energy practices.
There are two types of impact investing:
Environmental, Social, and Governance (ESG). ESG refers to an investment’s practices that may impact that investment’s performance. ESG identifies potential risks and opportunities beyond technical valuations. Financial performance is its primary objective.
Socially Responsible Investing (SRI). SRI eliminates and selects investments based on specific ethical guidelines. It uses ESG factors to apply positive or negative screens on the investment.
Promoting Conscious Consumerism
Conscious consumerism, also known as ethical or green consumerism, stresses the need to make a positive social, economic, and environmental impact while shopping. It’s growing more and more popular by the day. For this reason, companies should promote this behaviour and push their consumers in that direction.
Using eco-friendly materials, providing sustainable products, and connecting to power from green energy sources are a few examples to encourage conscious consumerism.
Corporate Social Responsibility (CSR)
Corporate Social Responsibility (CSR) is a business model that helps companies operate in a way that enhances society and the environment rather than negatively affecting them. Also called “corporate citizenship,” CSR helps companies be socially accountable to themselves, their stakeholders, and the public.
CSR became an integral part of several brands’ names, as it promotes them as ethical. They’re taking action to improve the environmental sustainability of their services and provide better social conditions. For instance, they use renewable energy sources and eliminate reliance on ethical labour practices.
Interested in learning more about this? You’re in luck! Read our EWOR article on “How Start-Ups and Companies Can Change the World”.
Examples of Businesses Changing the World
TOMS is an American company founded by Blake Mycoskie in 2006. The company designs and markets shoes, eyewear, coffee, and handbags. Mycoskie had the idea to start this company after a trip to Argentina. For every pair of shoes sold, TOMS donates a pair of shoes to children in need. The company has also expanded its campaigns to support water, sight, safe births, and anti-bullying initiatives.
As of 2022, it provided people in developing countries with 75 million pairs of shoes and more than 450,000 weeks of safe water. Their eyewear programme has restored sight in more than 780,000 individuals by giving them prescriptive glasses or surgery.
Love Your Melon
In 2012, Love Your Melon was initially a non-profit organisation but it transitioned to a for-profit company in 2016. Zach Quinn and Brian Keller launched the company to bring awareness to childhood cancers and improve the life’s quality for children battling cancer. The company follows the one-for-one social entrepreneurship model, in which one beanie is donated for every beanie sold.
The company donates 50% of its net profit to non-profit organisations around the world that lead the fight against paediatric cancer.
Grain4Grain was founded in 2018 to reduce food waste. The company’s innovative work involves drying and milling brewers’ spent grain into low-carb, high-protein flour and products. It provides healthy and sustainable ingredients at affordable prices.
Better World Books
Xavier Helgesen, Christopher Kreece Fuchs, and Jeff Kurtzman founded Better World Books in 2002. It’s an online bookseller of used and new books. It collects book donations from regular individuals, universities, and libraries. Every year, thousands of libraries have millions of excess books as they make room for new editions. Some books are stored or given away, while others are thrown out.
To eliminate waste, Better World Books partners with librarians across the U.S. It rescues unwanted books by giving them a new home while preserving the environment. To date, the company raised millions of dollars for literacy, saved millions of books from landfills, and created hundreds of jobs.
Changing the world as an entrepreneur is a noble endeavour. To do that, you have to research the field you’re interested in and in what area you can make an impact. If you also follow the practices we mentioned such as impact investing, promoting conscious consumerism, and corporate social responsibility, you’ll facilitate your success as a social entrepreneur.