Is there a place in our economy for organizations that are neither for-profit businesses nor non-profit organizations? This is the question the Nobel Peace Prize Laureate Muhammad Yunus sets out to answer in his newest book–Building Social Business: the new kind of capitalism that serves humanity’s most pressing needs.
Dr. Yunus got his start as an economics professor in Bangladesh. He started the micro-lending movement in Bangladesh, making small unsecured loans to poor people normally denied by banks. His program developed into the Grameen Bank. Dr. Yunus and the Grameen Bank won the Nobel Peace Prize in 2006.
More recently Muhammad Yunus conceived the social business. It is different from regular businesses in that 100% of profit is directed toward alleviating some social problem. It is also different from a non-profit organization because it is entirely self-supporting, usually by charging a small fee for its product or service.
As an example, the Grameen organization has a partnership with the French company Danone, maker of Dannon yoghurt in the United States. In Bangladesh, Grameen Danone produces nutritionally-enriched yoghurt for about 9 cents per unit, making it affordable to poor people. The program has created 1600 jobs and improved the diet of many Bangladeshis. It is self-supporting, returning all profits into expanding the program itself.
In the United States, a similar idea has been around for many years, in institutions like not-for-profit schools and colleges and non-profit hospitals. They are still generating most of their income through fees for services, yet do not generate a profit. Dr. Yunus is suggesting there are many more opportunities for organizations modeled like these.
Check out Professor Yungus’ book at your local branch of the Las Vegas-Clark County Library District.