Social entrepreneurship is not a particularly new term, but its use and prestige have grown prodigiously in the last two decades. Combining aspects of standard business models with a backbone of charitable giving and social consciousness, this new form of doing business takes a self-sustaining approach to solving some of the world’s biggest problems.
These merchants are taking on aspects of social entrepreneurship by merging core aspects of their business model with nonprofit and not-for-profit charitable giving.
These merchants large and small are taking on aspects of social entrepreneurship by merging core aspects of their business model with nonprofit and not-for-profit charitable giving. This form of entrepreneurship loops in charitable preservation into its core key performance indicators. The bottom line isn’t just profits, but also the societal and sustainability impact of the project itself.
As if maintaining a pure return on investment month-over-month wasn’t difficult enough, imagine then turning up to 30% of your profits over to fund sustainability and public services. In the rest of this article we’re going to really open up how social entrepreneurship distinguishes itself from other types of charitable actions, ways in which these merchants are giving back to their communities and ways to get involved on the ground level.
Finding the balance between how their business can remain profitable — bringing in constant, sustainable revenue — with aiding a cause as much as possible is a challenging but rewarding practice.
Social entrepreneurship can be broadly defined as businesses that consider profit and societal impact (the net good accomplished) equally. This balance between how their business can remain profitable — bringing in constant, sustainable revenue — with aiding a cause as much as possible is a challenging but rewarding practice. This is how socially conscious businesses will separate themselves from standard nonprofit and not-for-profit operations.
While all of these phrases have more or less the same meaning — and ultimately have the same goals — they operate in their own unique and distinct ways. To silo these terms — for the sheer sake of drawing differences between them — nonprofits can operate with paid staff with a goal of raising surplus funds for their cause.
Surplus funds aren’t redistributed to shareholders, but serve as a happy bonus to move towards future goals. Not-for-profits are generally smaller scale, utilizing volunteer staff. Furthermore, due to their structure, not-for-profits don’t qualify for 501(c)(3) tax-exempt status in the same way. Social entrepreneurship is on the right of both of these items, where by developing and creating a sustaining business model, higher profits can be turned into larger expansion and the ability to do more good.
Power in a purchase
With a mission at the core of their business, each social entrepreneur enables the consumer to put buying power behind their purchase. Because the charitable cause is at the center of each transaction, customers have more “buying” power behind their actions. While ecommerce behemoths offer a paltry 0.5% (despite record profits), SMBs are leading the charge in socially conscious giving, at times reinvesting 100% of their sales profits to charitable organizations ranging from the Wounded Warrior Project to author associations.
SMBs are leading the charge in socially conscious giving, at times reinvesting 100% of their sales profits to charitable organizations.
By tapping into socially-conscious buying, businesses can leverage the higher expectations consumers are placing onto business. CGS, a business application service provider, found in their 2018 study of retail shoppers that 40% of responders had an interested in the ethics of a product being produced.
The buy local, shop local approach for groceries and other renewables is going to filter back to online items as well.
This expectation goes further, where roughly that number of users are willing to pay more for sustainable products. However, this should come as no surprise. The buy local, shop local approach for groceries and other renewables is going to filter back to online items as well. If you’re giving your proceeds to charitable causes, or reinvesting in your community, let your potential shoppers know. Include navigation links to your mission statement, or mention in your header that a portion of proceeds go to good causes. It’s a simple value-add to your website, and may ultimately aid in a conversion.
How You Can Get Involved
A clear way to show your involvement in a community is to offer a price-flexible donation product. The process is like creating any other product, with a necessary product title, description and image, however there are two big differences. The first is that the items weight should be 0 lbs. This is simply so the item does not trigger any of your shipping methods; no customer wants to pay for FedEx Home Delivery for an item that isn’t going to be sent to them. The second aspect is the most important: under the Advanced Info > Misctab you’ll find the checkbox option to “Allow Price Edit”. This feature allows kindhearted customers to edit their item price on the checkout page. Leaving a price of $0.00 on the page keeps the product page blank, or setting a product price can leave a recommend amount.
Once created, you can begin to modify the product with options. Some stores, like the Ruffed Grouse Society, that allow customers to earmark and dedicate their giving to specific causes within the organization. Other social entrepreneurs, like Somethin Special, create options featuring a variety of different charitable organizations for customers to choose whom their giving benefits.
Building a donation is just one way in which you can put your toe into the veritable social entrepreneurship waters. Standalone products, outreach, social media influence and more, there are so many ways in which you can engage with online communities for a net positive. However, the true benefit of integrating social entrepreneurship tendencies into your business is found outside your brick and mortar. It’s found by following through and aiding the community that needs your helping hand.
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