In a May 16 op-ed piece in the Guardian, Muhammad Yunus issued a call to action to world leaders for more aggressive action in solving the looming global food crisis. Yunus laid out a six-point plan to prevent a humanitarian disaster of world starvation, the potential scale of which has prompted the United Nations to dub it the “silent tsunami.” Key to his plan is the formation of a “poverty and agriculture fund” paid for by a small tax on the sale of oil. The fund would be managed by these contributing nations and used to create social businesses that would be tasked with improving the health care, education and other needs of developing nations. Read the full article and discuss your thoughts.
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Jeff Delkin, co-founder, bambu
It’s our belief, that we have a responsibility to ‘give back’ to the planet and to the communities where we operate. It has always been central to who we are. We wanted to recognize and benefit the communities in which we work and live. And that place is China. While we may not be a social business as Yunus describes, we do provide support and volunteer services to the work of Grameen Foundation in China. We do donate over 1% of our total sales (not just profits) to non-profit organizations preserving and restoring the natural environment in China and around the world. We do donate to the local schools where the children of many our or craftspeople attend.
We are not a social business in the strictest sense of the word. We are a for profit company that strives to do good. And as such, I am not convinced that the social business model that Yunus describes is the best model.
Yunus argues that businesses with a social responsible strategy will have too often forego their good corporate citizenship for profit motives. And unfortunately, too often this does happen. But it happens to organizations which have not integrated their principles firmly into their business.
A simple spectrum of business models could look like this.
Social Business > Compassionate Capitalism > Profit Focused Capitalism
Our own business reflects more the ‘Compassionate Capitalism’ model. Yunus supports globalization and believes it brings more benefits than its alternative. He also recognizes the importance of marketing by conducting product testing, naming and identity development, and a tiered pricing strategy. Given that, businesses that practice compassionate capitalism can benefit many.
I was inspired to write this post for a couple of reasons.
Secondly as founders of a small business, bambu, we are interested in the concept of ‘social business’ that Dr Yunus’ introduces in his new book, Creating a World Without Poverty.
Central to our sense of purpose and value set at bambu, we concern ourselves with responsible stewardship of resources, giving back to the people and the communities in which we work in China and Vietnam, and preservation of the natural environment.
We strive to create an organization that acts with integrity. We describe ourselves as a values-driven company as opposed to a profit-driven company.
Dr. Yunus’ book presents some paradigm-breaking ideas that are a positive force for change, and made me reflect on our own business, and the role of business in general.
The notion of ‘social business’ is introduced in the first few pages. Yunus makes some important distinctions in defining what a social business is.
Importantly, he distinguishes a social business as one that directly makes products that poor people are willing to pay for, and one which directs all the profits back into the enterprise.
Heidi Matonis, Founder & President, Positivitee
About three years ago I came up with the idea of creating stylish tees that supported non-profits with 10% donated back to the charity. It grew out of my desire to: be a role model for my children, support causes dear to me, and to try to create a small, viable business to call my own.
In 2007 I made the commitment to “go green.” “Going green” to me meant using certified organic cotton, pigment dyes, waterbase inks, and fair labor practices. I went a step further by also becoming a member of the carbon fund to offset my carbon shipping footprint. None of this was easy.
Professor Muhammad Yunus announced this week the launch of another social business, a joint venture between Grameen Bank and Veolia Water designed to bring drinking water to the poorest people of Bangladesh. Grameen-Veolia Water will supply clean water to more than 100,000 Bangladeshi and expand throughout Bangladesh. Bangladesh is already benefiting from social business ventures previously initiated by Professor Yunus that have been built around producing low-cost nutritious food for children and health care services, all while promoting the local economy and providing real employment opportunities. These ventures are proving that social business can be a revolutionary approach to affect social change.