“I am proposing to create another kind of business, based on the selflessness that is in all of us. I am calling it social business.”
Nobel Peace Laureate, Professor Muhammad Yunus
Professor Muhammad Yunus
Co-founder Professor Muhammad Yunus is a Nobel Peace Laureate, Olympic Laurel awardee, Bangladeshi economist, and founder of the Grameen Bank, the world’s first dedicated microcredit institution. He is also known as the "father of social business" and as one of the greatest entrepreneurs of our time.
What is a Social Business?
A social business is 100% dedicated to solving social or environmental problems. It is a non-dividend company set up to solve a specific human problem. It operates like a normal company except for one main difference. 100% of the company profits are reinvested in continuing the social mission. And how is this different to a charity? A social business is predicated on a sustainable business model to deliver its mission; it is not reliant on grants or donations, instead focused on sales and generating diverse revenues. Crucially, the success of a social business is measured by its ability to solve the social or environmental problem; not the amount of profit in a given period.
The Seven Principles
Professor Muhammad Yunus further defines the concept of social business by outlining 7 principles: 1. Business objective will be to overcome poverty, or one or more problems (such as education, health, technology access, and environment) which threaten people and society; not profit maximization 2. Financial and economic sustainability 3. Investors get back their investment amount only. No dividend is given beyond investment money 4. When investment amount is paid back, company profit stays with the company for expansion and improvement 5. Gender-sensitive and environmentally conscious 6. Workforce gets market wage with better working conditions 7. …do it with joy