- Living Christmas rents live trees as Christmas trees. Their mission is "to change the way California celebrates Christmas." The founder was saddened by the number of trees discarded at the end of every holiday season, especially because of the negative environmental impact. The business has a social mission, the environment. Eco-businesses, or businesses whose mission is to protect the environment through selling/renting a product, are a new class of social enterprises.
- A second, more innovative type of social enterprise is Living Goods. While still maintaining a 501c3 nonprofit status, making them eligible for tax-deductible donations, Living Goods uses "Avon-like network of door-to-door Health Promoters who make a modest income selling essential health products at prices affordable to the poor. The model combines the latest and best practices from the worlds of micro enterprise and public health to create a truly sustainable system for defeating diseases of poverty." Instead of relying on volunteers to distribute good, independent business agents grow their own businesses and through doing so, benefit the community. To hear more, listen to this podcast by the Stanford Center for Social Innovation.
- Of course, the greatest success story of the for-profit social enterprise is the Grameen Bank. Through micro-loans, the Grameen Bank makes a significant difference in the lives of the poor in rural Bangladesh. It is a self-sufficient banks owned by the borrowers that no longer accepts donations. Every year it has made a profit. When in conversations with those supporting social enterprise, micro-financing is among the most frequently cited examples of why the nonprofit sector should change its assumptions about how organizations should operate.
1. Scale - One of the biggest problems in the nonprofit sector is scaling-up. USAID and OXFAM capacity building efforts, for example, have directed significant resources to help the nonprofit sector, particularly in developing countries, achieve this goal. Many social ventures, especially like Living Goods and the Grameen Bank, have turned this issue on its proverbial head, viewing the size of the problem as market opportunity.
2. The ethics of dependency- Nonprofit organizations that require little of their recipients, such as direct-service agencies, have been criticized for creating a culture of dependency. This has been especially true in Africa and Latin America. A recent rise in the number of international volunteers has raised questions about the degree to which volunteers take away lower skill jobs. Social enterprises, because they do not rely on volunteers and they require something from recipients (e.g., repaying micro-loans, payment for health products), may create less dependency.
Next sector blending post: Cause-marketing
