What if profit margin wasn’t the leading metric by which success was measured? What if one of the most important metrics for a company was whether they were able to impact social, cultural or environmental issues?
This is the driving force behind social entrepreneurship, a business approach that has seen increased activity and interest in recent years. You’ve seen self-proclaimed social entrepreneurs on Shark Tank pitching not only their mission, but their business case.
Whether for profit or not, social entrepreneurship is more than just another way to provide charity — these are real businesses built to provide lasting revenue, create jobs and ensure long-term sustainability.
These five companies prove that building a business around social issues isn’t just goodwill, it’s good business:
The quintessential example, and one of the first social-enterprise companies to enter the public consciousness, Toms Shoes was built on a simple premise: For every pair of shoes you buy from them, they’ll give a pair to someone in need, typically in underdeveloped countries.
The founder, Blake Mycoskie, was already an entrepreneur, and even sold a company to finance the creation of Toms. It turned out to be a wild success, with 10,000 shoes sold within the first year.
Toms, a for-profit company, has since expanded its product line, as well as the items and services it provides, providing access to clean water, items and training for safer births, and anti-bullying resources.
And before you ask, it is indeed Toms, not Tom’s. It’s short for “Tomorrow,” taken from the original concept of the “Shoes for Tomorrow Project.” Cue The More You Know music.
The Internet has opened up a new space for social-entrepreneurship, and Change.org has taken advantage of that opportunity to the tune of 150 million users and $72 million in funding.
Founded in 2007, Change.org’s mission is to make creating petitions easier, encouraging its users “to create the change they want to see.”
Change.org is also a Class B company, a certification for companies committed to creating positive impact.
When people like Bill Gates are investing in your company, you’re probably on to something.
The Safety Store
Social entrepreneurship doesn’t always take the form of companies who take off with a bazillion customers and major investors, sometimes it’s about solving issues locally and providing a sustainable revenue stream.
The Safety Store at Children’s Hospital Colorado has two locations to serve Denver-area residents. The stores feature exactly what the name implies: things to keep you safe. From car seats to bike helmets to life jackets, The Safety Store provides personalized education in addition to merchandise for whatever injury-prevention product you’re in the market for.
All proceeds support the hospital’s community-based injury prevention outreach initiatives, providing a sustainable source of revenue so they don’t have to rely solely on donations. This is a popular area of exploration for many small non-profits seeking new sources of funding.
Love Your Melon
Sometimes millennials get a bad rap, but the millennial founder of social enterprise Love Your Melon turn the stereotype of a selfish generation on its head.
Love Your Melon has a simple mission statement: provide every kid with cancer a cool, comfortable hat to wear during chemotherapy treatment. Following the one-to-one model that Toms Shoes popularized, every purchase equals a free hat or piece of clothing for a child undergoing cancer treatment.
Love Your Melon takes it a step further by donating 50% of net proceeds to nonprofit partners that work in the field of pediatric oncology, or support families of children with cancer.
And it looks like even with donating 50% of profits, Love Your Melon is doing just fine. On Cyber Monday of 2016 alone, they generated more than $414,095 in donations.
Blue Star Recyclers
Social entrepreneurship isn’t just a way for companies to give back, but a business model that can enable those with special needs or challenges to gain independence.
With locations around the Denver metro area, Blue Star Recyclers seeks to create jobs for individuals with autism and other disabilities. They point out that only 20% of electronic waste is recycled, while 80% of those with disabilities are unemployed. This is true entrepreneurial thinking: finding a problem and creating a solution.
The business model is so effective, Blue Star recently received a $50,000 grant to expand its business model across the country.
The future of business?
While having a corporate responsibility or social enterprise component has been a big part of businesses for a long time, building a business model around this idea is relatively new — but it’s likely here to stay.
A recent survey found that a whopping 94% of millennials say they want to use their skills to make a positive impact. Social entrepreneurship provides a model that motivates its employees, as well as consumers. As more and more millennials enter the workforce and start their own businesses, it’s clear this will be a popular business model for a long time to come.