June 23, 2008
June 04, 2008
The following is a summary of a report to the Board of Directors of Grameen Foundation regarding social business viability by Khalid Shams, Former Deputy Managing Director, Grameen Bank.
Grameen’s Social Business Initiatives
Grameen Bank has been experimenting with new social business ventures since the early ‘90s. It has effectively used the microfinance platform for launching several social enterprises. Some of these were ‘for-profit’, while others were ‘not-for-profit’ entities, but each had a distinct corporate mandate for social development. Grameen Bank itself would be an example of such a social business enterprise, which provided microfinance related services to the designated rural poor and the bank is also owned solely by the borrowers themselves. Some of the social enterprises were created in direct response to the demand of GB borrowers i.e. the Sixteen Decisions of the bank, as well as the rural poor, for essential services needed for development of health, education, nutrition, and alleviation of poverty.
Some of the enterprises were concerned with extension of new technologies that could directly raise the income and productivity of the poor trapped in such traditional sectors like agriculture, fisheries, rural industry. New ventures were also launched for development of information and communication based technologies.
More recently, Professor Yunus has taken the initiative of setting up “social businesses” that aim to provide nutrition and health services to a targeted client. In these new ventures, after the initial capital costs have been fully recouped, the investors agreed to take only nominal dividends, plowing back all profits for further expansion of the social business. Grameen-Danone Foods Ltd, and the newly formed Grameen Eye Hospitals are the latest examples of more rigorously designed social business models.
May 20, 2008
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.
May 19, 2008
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.
May 12, 2008
Jeff Delkin, co-founder, bambu I was inspired to write this post for a couple of reasons. We first became aware of Grameen Bank while living in Asia. More recently we’re personally involved on a volunteer committee to help raise awareness for the work Grameen Foundation is doing in China. 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.
April 21, 2008
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.
April 14, 2008
Danone and Grameen are, in fact, changing the game of business. They have created a profit-making enterprise where societal contribution is more important than maximizing profit (a “social business”), and opened the door for other new inventions that move us towards a world without poverty.
What could happen in the world of profit-making business if societal contribution became at least the equal of mazimizing profit in boardrooms throughout the world?
April 07, 2008
Grameen Danone – the world’s first “social business” as conceived and presented by Dr. Yunus in his new book – is a brilliant invention. What Grameen and Danone have done with great courage and insight is open the door to a new future – and to a new whole landscape of possibility for creating a world without poverty. And perhaps much more.
Given this first landmark step, what else might now be possible?
For instance, what could happen in the world of profit-making business if “global viability” became the equal of “maximizing profit” in the boardroom?
Social Business and Microeconomic Opportunities for Youth Conference: A Social Entrepreneur’s Perspective (Pt 2)
March 31, 2008
The social business panels included topics ranging from eyeglasses to fashion to footwear.
The Coffee Coop combines fair trade coffee from Honduras with a fund raiser for middle school students. The team wanted to support sustainable farming and teach students about micro-enterprise
Carrie Magnuson described how Scojo trains micro-entrepreneurs how to test eyesight and sell eyeglasses to the poor in remote villages. While eyeglasses are taken for granted in the West, they are missing in developing countries: an estimated 700 million people worldwide need eyeglasses. Scojo is partnering with BRAC in Bangladesh to expand their current operations using micro-franchises.
Social Business and Microeconomic Opportunities for Youth Conference: A Social Entrepreneur’s Perspective (Pt 1)
March 24, 2008
The Social Business and Microeconomic Opportunities for Youth Conference inspired and motivated me. I learned from Muhammad Yunus and John Hatch as they described how microfinance has helped over 133 million households. Listening to stories about the over billion people who still live on $1 per day challenged me to join the fight against global poverty.
My favorite story was Yunus’s description of meeting with an illiterate woman (Grameen Bank borrower) proudly standing with her doctor daughter (Grameen Bank scholarship recipient). While he was thrilled to see the educational level go from illiteracy to medical school in one generation, he was saddened that the mother could have been a doctor too if she had the resources to attend school. Through microfinance and social business, we can use financial capital to help people improve their health and education resulting in expanded human capital.
Bob Sample’s posts did a great job highlighting several key speakers and panelists, so this article will cover the youth entrepreneurs, social entrepreneur panel and breakout sessions.
There was an impressive number of youth in the audience. When John Hatch asked audience members who were 30 or younger to stand, I was among the approximately 20% of the audience who stood. A reception allowed finalists for the Social Business Plan Competition to show their products to conference attendees.