Business 2.0: Social Entrepreneurship?

Have you purchased a product recently from a company that also has a social mission?  I'm not talking about a company that participates in “fair trade” or has local employees participate in various community service projects.  Instead, I'm talking about companies that donate a specific product for every customer purchase.  For example, every meal purchased at Tacos 4 Life will donate a meal overseas to end child hunger.  This is the new craze in business called social entrepreneurship.

Is social entrepreneurship the future of business?  Or will profit margins & quarterly earnings take precedence?

Why Social Entrepreneurship Is Good

social entrepreneurship
Social Entrepreneurship isn't just for Christmas time!

I have written in the past about charity, whether it is Giving Tuesday or the importance of charity.  Social entrepreneurship existed since the 1950s, but just became very popular within the last decade as large companies have incorporated it into their overall mission.

#1 Social Causes have gone viral

You might be most familiar with social entrepreneurship in the form of thrift stores like Goodwill or the Salvation Army.  But now major retailers & entrepreneurs have joined in on the cause.

I think this is great because we can purchase food or products from certain companies & know that a portion of the profits go to help others in need.  If a social-minded company is charging a similar price as a regular retailer for a product we are going to buy, my wife & I will normally choose the one with a social mission.  Without trying to sound full of greed envy as I own stock investments, we want to see our money help others instead of solely lining the pockets of a CEO or shareholders.

Economic prosperity, increasing salaries, & record profits are great, I also believe we should use some of this money to help others in need.  Even if we live near the poverty line in America (or the Western world in general), we still have so much more than others.

#2 Private Sector Solution

I also think social entrepreneurship is a private sector solution to social issues.  With a mind-blowing national deficit, the government has it's own issues that need confronted.  If they haven't been able to effectively manage tax dollars in my lifetime, I'm not going to cheerfully give them more money in order to confront hunger or lack of clothing.  I do not give money to charities with horrible financial practices either.  In my humble opinion organizations such as churches, non-profits, and for-profit social entrepreneurs are smaller and can more efficiently allocate resources where they are most needed.

#Consumer Driven Charity

For people that do not want to associate with religious organizations or donate to charities, funding social missions through consumer purchases is a great strategy as well.  People might be turned off by solicitations for charitable gifts, but don't mind or are unaware of the social mission if they buy certain products.  If people are going to spend money anyways, it should go to a good cause.  Right?

The Downside of Social Entrepreneurship

#1 Potentially Higher Prices

One large discussion point among the business-savvy is if social entrepreneurship artificially inflates prices.  Some argue that the #1 priority of company CEO's is to serve the best interest of its investors.  The investors can than spend or donate their earnings as desired.

For example, could Tom's sell shoes for lower prices if it didn't have a “One for One” policy?  They donate a pair of shoes for every pair purchased.  Possibly, although their prices are very competitive with companies that are not overtly known being social-minded.  Perhaps Tom's (& other corporations) are successful and solely exist because of their social missions.

#2 Social Entrepreneurs Aren't Always Modest

This point is solely food for thought.  I'm not going to say that the most successful social entrepreneurs are living a lavish lifestyle like you might have read about in The Great Gatsby.  They also aren't donning sackcloth either.  Business owners should be rewarded for their hard work and success.  I don't live a lifestyle of poverty and give every penny of disposable income to charity, and I don't expect them to either.  Just as certain people are critical of businesses for having corporate greed, can social entrepreneurs do more?      

Ways You Can Support Social Entrepreneurs

There are lots of companies that support great causes.  Some are local while others are internet based.  Here are a few:

  • Giving Assistant
    • This is a cashback portal that donates a meal for every purchase made through their portal.  This a way to help others even by making purchases at online retailers without social missions.
  • Tom's
    • This company started with donating a pair of shoes for every pair purchased.  They will also donate a pair of glasses for every eyewear purchase, & help a woman with childbirth for every bag purchased.
  • Warby Parker
    • This eyeglass company has retail locations in major cities across the United States.  Online purchases can also be made.  They donate a pair of eyeglasses for every pair purchased.
  • Thrive Market

These are just a few successful, social-mission based companies with an internet presence.  I encourage you to use these or support others, whether they are local or international.  Hopefully one day, every company will support a social mission to some extent.  Social entrepreneurship along with charities can help improve the lives of others domestically & across the globe.

Do you like the concept of social entrepreneurship?  Do you support any particular company?

Thanks For Reading,

Josh


Josh founded Money Buffalo in 2015 to help people get out of debt and make smart financial decisions. He is currently a full-time personal finance writer with work featured in Forbes Advisor, Fox Business, and Credible.