What Are Some Creative Business Models For Social Good?

In the process of creating the initial concept behind Project Free World (and its subsidiary projects such as The Poverty Wiki), we’ve been lucky to be able to do research on hundreds of social entrepreneurial organizations.

Firstly: What does social good/social entrepreneurship really mean?

While traditional business has a goal of maximizing profit without regard to the social impacts, and traditional charity has a goal of redistributing resources without regard to financial sustainability, social entrepreneurship is about finding a way to bridge the gap between the two.

In its purest form, social entrepreneurship entails uncovering a creative business model that allows an organization to help solve a pressing need in society; yet at the same time, still remains financially sustainable without the ongoing support of charitable donors.

Since these initiatives are typically quite innovative (read: move faster than the bureaucratic laws that govern them), the business laws that govern them are still playing catch up. In the United States, this means that they may be registered officially in a variety of ways: Non-profit, for-profit, or B-corp.

Here are four examples of creative business models for social good that are relatively easy to visualize, with the aid of some back-of-napkin diagrams we created:

1. Samasource

Samasource partners with large tech companies such as Google, eBay, Microsoft and LinkedIn, and helps to break down some of their complex projects into simpler tasks called Microwork. They then train women and children living in impoverished areas in basic computer literacy skills, and offer them an opportunity to earn a living through work via the internet.

2. LivelyHoods

LivelyHoods partners with companies that produce environmentally friendly products such as solar lamps and clean cook stoves. They then recruit youth living in the slums of Nairobi to teach them sales and marketing skills. The youth are given an opportunity to sell these products without paying anything out of pocket; a very low-risk, high-reward spin off of traditional microfinance. The youth earn a commission on every product they sell, and can even recruit their friends to come join their sales teams as well.

3. Soma Water

Soma creates environmentally friendly, compostable water filters, and donates a portion of their profits towards new water projects in developing regions via charity: water. This is a very popular and effective model of combining traditional consumption with humanitarian pursuits, and almost every business could hypothetically shift to this type of model if so desired.

4. Catchafire

Catchafire recruits skilled volunteers to non-profit organizations in order to stretch their budgets. It utilizes technology to allow individuals to find volunteer opportunities that fit perfectly with their highest leverage skills.

Other great organizations to check out:

Change Heroes – Crowdfunding schools in the third world
IDE – Developing a multitude of affordable, vital products for families in poverty
InVenture – Creating financial opportunities for low-income entrepreneurs
KNO Clothing – Donates 50% of profits towards ending homelessness
Krochet Kids International – Providing employment channels to war refugees
Mosaic – Crowdinvesting platform for solar energy projects
One Acre Fund – Investing in small one acre farms to alleviate poverty
Skillshare – Online platform to learn real world skills from anyone
Wangsa Jelita – Creating opportunities for women rose farmers

Further reading:

Building Social Business by Muhammad Yunus
The Business Solution to Poverty by Paul Polak and Mal Warwick
Work on Purpose by Lara Galinsky

It’s All My Fault: How I Messed Up the World, and Why I Need Your Help to Fix It by Jordan Phoenix

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s