By Antoine Didienne
Social enterprises, for-benefit companies, benefit corporations, hybrid companies and not-only-for-profits are all new terms describing a type of for-profit company that has the goal of improving a social concern. Many people don’t understand what these entities actually do or even what they are. Let’s change that.
Let’s start by picking a term we can use while discussing these entities. The term I’ve chosen is social enterprise. Social enterprises are companies that aim to make a profit and solve a human or environmental problem at the same time. They combine goodwill and profit to solve the world’s most important problems. They often combine the best parts of what nonprofits and regular companies have to offer.
The fourth sector
Just like nonprofits, social enterprises have a clear mission of doing something good in the world. And just like regular companies, they are also looking to make a profit and grow — which ultimately serves to enhance the effect of their social impact. Unlike most nonprofits, however, these companies are proving to be more agile, nimble, and untethered to the heavy paperwork and reliance on donors that nonprofits often face.
Unlike regular companies, social enterprises serve their mission first, not their shareholders. The products or services they sell are only a means to an end to achieve their mission of making the world a better place. The social enterprise is the end product of the public, private and social sectors meshing into each other; they are the new “fourth sector” of the economy.
The triple bottom line
Social enterprises have different goals and missions than regular companies. Because they exist to affect positive social and environmental change, social enterprises do not only care about the financial bottom line but work on being profitable on the triple bottom line (money, environment and social impact). People that support as a customer and/or work as an employee for social enterprises enjoy a shared belief in the company’s mission and are able to play an active role in the solution offered.
People want to know about the products they use, the food they eat, the services they purchase. Awareness of what is purchased and how it fits into the consumers’ personal mission is now more than a trend.
The new normal
The social enterprise movement has passed beyond being a trend and is a mainstay of business, which is good news for the world. It is the new normal and is only getting bigger and attracting satellite industries. Now, top-level universities offer programs and classes dedicated to social enterprise companies and how to run one. Attorneys have gotten in the mix and are specializing in providing legal advice and representation to social entrepreneurs. Towns like Encinitas in California have created initiatives to become the Silicon Valley of social enterprises. And last but definitely not least, the American government has decided it was time for social enterprises to get their own tax code.
All this is to say that the social enterprise is the future of commerce. At their core, these companies are created to care about the products they sell, the customers the serve and the world they are a part of. That’s why we have created Vavavida — a company that aims to sell beautiful, handmade jewelry and empower women to realize their full potential. Because we care and saw an opportunity to create change. It’s a wonderful time to be part of this swelling, lasting movement.
Image credit: Vavavida
Antoine Didienne is the founder of Vavavida, a fair trade and ecofriendly accessories company.