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What is a Social Business?
A Social Business is a business that has both commercial and social goals woven into the fabric of it. Investment in a Social Business would lead to equivalent increase in both Social Impact and Return on Investment.
A social business can also be a non-profit or for-profit.
Oftentimes, the Social Business is not the entity that is doing the work that solves an issue.
In most cases, a portion of the profits from the Social Business is committed toward solving that social issue.
There are a few key concepts that separate Social Businesses from Corporate Social Responsibility.
An example of a Social Business is Newman's Own. This company is not always doing the work themselves, but they are contributing a significant amount to changing a social issue and Newman's Own is all profits to charity. So, everything that is above the operating costs of that organization are going out to the organizations and the missions that they want to find and that they feel passionate about.
A Social Business is different from Corporate Social Responsibility because the issue that the Social Business is committed to solving is at the center of why the business exists.
Corporate Social Responsibility often gets included in the marketing budget of a lot of organizations and is likely to be in a separate category than what is core to ‘Why’ that business exists.
A Social Business operates as “we raise money for those organizations because this is part of ‘Why’ we do what we do” as opposed to “if I have an extra $10,000, I'll sponsor your event, or I’ll provide this grant, etc.”.
This difference is central to ‘Why’ the Social Business exists.