25 & Trying

Is it True? Social Businesses Alive and Well

Photo Credit: www.pbs.org

This weekend, I finished my second book written by Muhammad Yunus, founder and creator of Grameen Bank in Bangladesh. The micro-finance process for which Yunus is famous – a process I will delve into in a moment – has helped bring hundreds of thousands of people out of abject poverty worldwide. Yunus has won the Nobel Peace Prize for his efforts, and written two great books on the subject of poverty reduction and innovation.

The first book, Banker to the Poor, focuses on the formation of the Grameen Bank, and the reasons that it worked well for the people of Bangladesh. The second, which I finished on Saturday, Creating a World Without Poverty, focuses instead on the concept of a social business.

Yunus’ fame comes from his innovation – it is at the heart of everything he does. Grameen Bank took the concept of giving credit to the poor as a way to get them out of poverty, and it has worked. He has done something simple – lending small sums to individuals in rural Bangladesh, and holding them accountable for paying back the loans. In this way, he started a revolution. People could use business principles to fix their problems.

This was extremely new. Most international development has an element of donor funds, and interaction between developed and developing countries to create “development.” Yunus created a local solution. This really isn’t without problems – like any innovative attempt at world change – but it got me thinking.

He began as a small bank in Bangladesh, and since, has evolved Grameen into a dozen or more companies. Some are nonprofit, some are for profit, and some are social businesses. The alleviation of poverty is at the bottom line of each of them.

The book focuses on Grameen’s infamous partnership with the multinational Danone (Dannon yogurt in the U.S.), and how the Board of Directors became extremely excited at segmenting a portion of their company to go to creating a social business.

This social business model is very simple: create a business with social causes in mind. This is NOT THE SAME as corporate responsibility. This is a business whose dividends and profits get reinvested. It ensures a “break even” return-on-investment for investors, but all profits beyond that go back into the company, whose aim is to be profitable at creating social change.

In the case of Danone, the partnership created Grameen Danone Yogurt, sold door to door in rural Bangladesh, manufactured at a local factory, using a Grameen renewable energy company for power. Everything is local and specific to Bangladesh – including the taste of the yogurt.

The more I blog, the more I meet people that are entrepreneurs, creating their own things and going after them. What if we all went after something besides money? What if we took our innovation and fostered THIS type of business model.

Granted, Yunus has a level of access to CEO’s that us minions don’t have. He won a Nobel Peace Prize, and can get conversations started with all sorts of people. But that doesn’t leave us off the hook.

With all this talk of Location Independence, branching out, being Gen-Y awesome, we have to start thinking about these things. How will our dreams affect the dreams of everyone?

Some links to get you started:

Grameen’s Official Site

Getting your MBA in Social Entrepreneurship

UN’s Millenium Goals