“I want to start a non-profit because I want to help people and money is not that important to a non-profit.” I hear that often from well-intentioned people; unfortunately, they are setting themselves up for complete failure. Society has conjured up a false view of the non-profit industry. Yes, industry. The non-profit world has its lingo, best practices, industry-specific jobs, and its fair share of political games and financial scandals. Moreover, non-profits are probably more concerned with money than for-profit entities because funding is unstable and competitive. What society has forgotten is that non-profits are really just a type of business entity. A non-profit IS a business. A business whose business is doing good and whose structure is to redistribute its profits back into the organization/community to continue doing good. Non-profits have become synonymous with doing good, but social enterprise argues that doing good is not limited to one business model. A social enterprise could be a not-for-profit, for-profit, co-op, or an emerging model called L3C. For some examples, check out, SCRAP, a non-profit whose mission is “to inspire creative reuse and environmentally sustainable behavior by providing educational program and affordable materials to the community;” KNO Clothing a for-profit clothing company fighting homelessness; Evergreen Cooperatives a conglomerate of four cooperatives roviding job creation, wealth building, and sustainability to Cleveland, Ohio; and MOO Milk Co. an L3C promoting farm preservation and economic development by organic dairy farming. Doing good is not limited to non-profits and does not discriminate; there are many paths to doing good.
The Wall Street Journal recently wrote an article “Tech Boom Hits New York.” The article highlights an up and coming e-commerce, fashion eyewear company, Warby Parker. The company is attracting investors left and right, in fact, they are turning away investors. What’s interesting about the article is that it does not mention once a critical component of Warby Parker’s business model – “for every pair of glasses sold, we provide one to someone in need.”
Warby Parker’s success is an excellent example of how profit and social impact aren’t mutually exclusive; but, where’s the plug for social enterprise? Is it necessary?
Social enterprise is nothing new, and over the decades, acronyms, catchy phrases, and terminology have shaped the concept of social enterprise to become a unique sector. Vocabulary has its role, but has it stifled the potential of social enterprise to impact mainstream business by segregating itself? I think WSJ’s article on Warby Parker points to an underlying sentiment in the traditional business world; it’s great if you do something good for the world but it’s still the bottom line that matters. If the goal of social enterprise is to change the way business is done, maybe it’s time to ditch the semantics and work on creating killer business models.