on social businesses

I was listening to NPR this weekend and a particular show caught my ear. It was an interview with Mohamed Yunus, nobel peace prize laureate a few years ago. His work is on social enterpreneuralship, sound familiar?
If you have read The Remedy, by our own Lisa Rohleder, then you are somewhat familiar with this guy’s work. He feels that free enterprise is the way to go, but that the way capitalism is set up is bogus. It focuses only on the individual and promotes nothing but greed, inequality, and dissatisfaction.
Yanus’s idea is that businesses should be for-profit enterprises. He calls his vision "social business" — a model where entrepreneurs can apply their creative, social and altruistic vision to the world's most pressing problems, such as poverty and homelessness. Revenue from these businesses should go back into the communities they are in. People get paid, bills get paid, investors get their investments back, and everybody is happy. He created Gramin bank, which offers small business loans to totally disenfranchised people in totally disenfranchised places, like poor women in Bangladesh. These women operate a yogurt industry there, as part of the yogurt giant Danon. Now they have jobs, their kids have yogurt, which supplies them with a lot of the nutrients they weren’t getting before, and Danon has a major success in their hands. Sounds beautiful, doesn’t it? Well, it is beautiful, except for the part where Danon has a major success in their hands. And why is this a problem, you may ask? Because the investors can’t help themselves and all they can see is $$$$ signs in front of their eyes. They are too committed to the ideas of capitalism as they understand it. If they invest in something and that something takes off like crazy because of their investments, then they want a piece of that pie. No matter if initially they liked the idea of a social business.
So there have been some board discussions at Danon, some tinkering with mission statements and by-laws, and now those greedy investors are making more money than they invested.
Danon in Bangladesh is still a great business. People still have jobs and kids still have their yogurt, BUT the original idea of revenue going into the community has kind of been lost along the way.
A very similar thing happened with another giant business Yanus set up. A major telecommunications enterprise, I forget where. Same thing, investors invested. They where feeling altruistic and generous. They knew they would get their investment money back, so why not help someone out? Well, a few years into it, the business was raking in the bucks, and they all got greedy. They wanted a piece of it, and they went ahead and changed the original arrangements so they could get their piece.
All this makes Yanus (and me) sad, of course. He (and I) believe that people are indeed good and generous. That people want to help people. That this is human nature, but that roots of greed and individualism have gotten too deep in people’s psyche.
And this is where Community Acupuncture comes in. Businesses like ours that are so small. We can really make this social business thing a reality, because guess what? We don’t really have investors! We have loans from the bank or from family members. We pay those off and we are good to go, not in need to answer to anybody, except for the IRS. We can decide how much we pay ourselves and how much our employees make. After we pay our overhead, if there is revenue left over, we get to decide what happens with that. We can be the micro little social businesses that could! Most of us believe in grass roots… well, let’s do it from the bottom up, then.
I highly recommend listening/reading to the interview with Mohamed Yanus on NPR. It aired Sunday, January 13. And though I haven’t purchased it myself, I recommend you get your hands on a copy of his new book, Creating a World Without Poverty: Social Business and the Future of Capitalism..