Social Entrepreneurship: How to Create a Business Dedicated to Doing Good
We’ve all grown up with the notion of the American Dream, starting a business from the ground, working hard and making huge profits. But success isn’t always measured through profit; recently, companies have taken it upon themselves to create businesses that are dedicated to solving major societal issues, a concept known as social entrepreneurship.
Take the company Grace and Lace (a designer sock company featured on Shark Tank) for example. Despite being a for-profit company, founders Melissa and Rick Hinnant also focus on ways to give back. To this day, they donate a portion of their profits to Angel House, an organization dedicated to building orphanages in India, and together, Grace and Lace has built residencies that have housed hundreds of young boys and girls.
These philanthropic ideals aren’t just limited to newer or even smaller businesses. Tech empire, Google, has set out to provide universal access to the interweb, reminding users that for every one person who has the ability to use the internet, there are two others who do not. Their idea, Project Loon, involves releasing high-altitude balloons into the atmosphere which transmit an LTE connection to rural communities, giving more people the opportunity to connect to the internet.
Living here in the United States, sometimes it is easy to forget that unlike many of us, millions of people do not get the same opportunities we take for granted: from daily internet access to higher education. The good news is that many companies have already begun to recognize this. In a 2016 US SIF (The Forum for Sustainable and Responsible Investment) report, researchers found that sustainable, responsible and impactful investing has grown 33% over the past two years alone.
The work for businesses to help social, cultural, or environmental issues is not done. According to the World Bank Group, there are still upwards of 700 million people living in poverty today. One of the best ways to address issues like poverty is through social entrepreneurship. But as most of us know, starting any kind of business is never easy, so here are three key points everyone should keep in mind.
1. Pursue your passion
This is by far the most important aspect. Passion is everything. Your business is a culmination of all your hard work and dedication, and passion for who you are helping can be a major force that drives you, even when times are toughest.
For instance, taking a look back at the company Grace and Lace, the founders didn’t randomly choose to build orphanages in India. Creator Melissa Hinnant had done service programs in India and China when she was younger, so when she and her husband started their business, they found a cause they were passionate about, and supported Angel House with some of their company’s profits.
There are hundreds of amazing causes out there to fund: from saving our environment to helping provide healthcare in less privileged communities. Find a cause that makes you happy and excited to be part of. Do something that you are passionate about, and create something that you will be proud of.
2. Find the root cause
We all know the saying: give a man a fish, he will eat for a day, but teach a man to fish, he will eat for a lifetime. Yet very rarely do people ask, where is he supposed to get a fishing rod?
Finding the root cause of an issue means digging deeper than just throwing money or inadequate supplies at the problem. It involves understanding the circumstances and the societal perceptions that further the issues.
More specifically, we can look at the recent disasters communities across the United States have had to go through. No, I’m not talking about the hurricanes or the fires, but a disaster unfamiliar to millions: The Second Tier Disaster. It is the process where after a horrific natural disaster, people who weren’t affected want to donate everything they can. From prom dresses to wigs to millions of liters of water, many of these items become unusable and the management of the goods becomes catastrophic, contributing to this widely unknown disaster.
Organizations such as the Goodler Foundation have already worked towards solving this problem by partnering with local and national organizations, effectively managing the donations of goods as and money.
By finding a way to target the root cause of the problem, and effectively solving it, organizations like the Goodler Foundation are able to make impactful change.
3. Synthesize your solution
To be able to have a real impact on whatever issue you are trying to solve, you need to have an effective solution. When we think about Silicon Valley success, we think about building our own company from the ground up; fulfilling the American dream so to speak. But what many people fail to realize is that there is a myriad of organizations that already exist. In the state of California alone, there is already 25,000 registered nonprofits.
Now don’t get me wrong, nonprofits are great! But if a solution to a problem already exists, then there is no need to create a company that is trying to achieve the same thing. Instead, you can focus on taking an existing corporation and making it your own. Partnering with these local associations is also crucial.
Remember Grace and Lace, the sock company that partnered with the Angel House Group in India to build orphanages. By taking an existing organization and funding it, Grace and Lace is able to support and be a part of Angel House, rather than going to India and creating a competing foundation that builds orphanages.
Of course, there are also times when the solution does not exist or isn’t working and you must make your own, like Project Loon. Project Loon isn’t the only idea out there people are using to transmit LTE connection, but it is one of the more effective and more transportable solutions.
Regardless of whether you choose to create your own solution or modify an already existing one, remember that not only does your solution have to be effective, but you also should be passionate about the cause you are addressing.
In today’s fast-paced, continuously advancing society, it is important to recognize that even small acts of entrepreneurship can do big things. Social entrepreneurs do not have to be tech gurus or billionaires, just people who are putting purpose into profit to change lives.