A few weeks back, I joined this organisation called Social Enterprise London. SEL is the largest network of social enterprises in Great Britain. I found this out after I attended their Annual General Meeting (AGM) a few days ago. Of course when I had joined it was just a google search…as all important internet decisions are made, I picked the organisation with the nicest website! I joined because it’s supposed to provide support and training to those who’re running social enterprises or those who want to start one. I fall in the latter category.
I was sold to the idea of social enterprises after reading Mohammad Yunas’s (the Nobel laureate founder of Grameen Bank) book ‘Creating a World Without Povery: Social Business and the Future of Capitalism’. Although not a very well-wrtitten book, it still inspired me to think of ways in which I could make a difference and the confidence to think ‘Yes I can’. My long term goal has always been to start something on my own. But I’ve also always believed that I don’t want to start just another NGO to start competing in the already-saturated NGO ‘market’ out there. Social enterprises seem like a much better idea. Why? Because, like NGOs or charities (the more popular term in the UK) they try to deal with social issues, but unlike charities they don’t believe in donations or handouts. This applies both to themselves and to those whom they seek to help. Every social enterprise is first and foremost a business, but with the intention of doing some good. Win-win. Different social enterprises have different business models. Some reinvest all or a part of their profits back into the business or donate to a social cause or charity. For others the very nature of the business is such that it fulfils a social need or deals with a social issue (for example, running a restaurant that employs and trains ex-offenders or troubled youth to become chefs).
Yunas makes the distinction between a ’social business’ and a ’social enterprise’. According to his definition, a social enterprise is any initiative (could be a company or an NGO or charity) that seeks to alleviate a social problem. While a social business is a business that has a social goal AND reinvests ALL its profits back into the business as opposed to paying dividends to the shareholders (as is the case with traditional ‘profit-maximizing’ companies). In that sense, the definition is narrower and more stringent as a social business is a social enterprise but a social enterprise is not necessarily a social business. So what? According to Yunas, this distinction is important because a social business can never be true to its goal or make a lasting impact unless it reinvests ALL its profits back into the business. When it tries to keep shareholders happy and also reinvest some of the profits, the profit maximization part of it will always win out. The only case in which he allows dividends to be paid by a social business is if it is owned by the ‘poor’ themselves, as is the case with Grameen Bank.
I don’t necessarily agree with Yunas’s distinction and certainly don’t think his model is the only one out there, but I really do think he’s done wonderful work and his example is quite an inspiration for those who want to think along those lines. Also he doesn’t believe it takes a certain kind of person to start a social business. Any one who wants to make a difference can do it, as long as they are sincere and remember that they are running a business and go about it professionally.
As a side note: SEL’s AGM also featured a debate between three MPs from the three major political parties. The debate itself was ok, but what really impressed me was how humble and accessible these MPs were. After the debate, they stayed back to talk to the members over refreshments. There were no ‘chamchas’ (sidekicks), no security, no press-wallahs. Unbelievable. In Pakistan, if a Minister shows up at an event, there would be a motorcade, security and all that fuss and even then an average person would never get a chance to speak to him/her. After the event when I was leaving the venue, one of the MPs, Angela Smith of the Labour Party, was walking out at the same time. I stopped to tell her that I enjoyed her talk (which I did. She seemed very sensible, sincere and practical as opposed to the others. The Tory MP, Nick Hurd, just seemed to be playing to the gallery…there was something very annoyingly insincere about his demeanour. While the Lib Dem MP, I forget her name, seemed like she needed more experience). I just expected her to say “thank you” and leave it at that. But what absolutely surprised me was that she stopped and seemed genuinely grateful and asked me what I did. I told her about my ideas for starting up a social enterprise. After telling her that I was from Pakistan, she told me that her husband has actually written a text book on Pakistan Studies that is taught to O levels students! Anyway, on getting out of the building I started walking to the tube station and she said she was going to catch a bus. I couldn’t believe my ears. Can you imagine a Pakistani minister taking a bus? Even if I put aside the fact that this is the election year and hence every minister is probably being extra nice to potential voters, what I really found absolutely amazing was that they still seemed normal and approachable.
Despite all the MP expense scandals, and I’m not so naive as to think there is no corruption or that the system is perfect, I still think it’s a great system where someone like me (who’s basically a nobody) can chat to a minister, walk with them and then both take public transport to get home!
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