{discovery} Social Business — For Sustainability!

I’m volunteering with the wonderful the Kota Project – and learning leaps and bounds about the non-profit world.

The core mission of the project is to equalize the social, political and economic standing of women and men globally by providing the physical and virtual spaces, tools, and services required by non profits working on women’s empowerment.The tool to achieve this goal is a World Center for Women – a physical premise in New York City for not-for-profit organizations whose global mission is to improve women’s lives.

But in addition to providing strategic, legal, communication, and other support services as well as offering office, conference, and event space to the nonprofit organizations, we are considering integrating numerous other features in the Kota building?

The planned features include:

  • Retail space for related businesses (e.g., owned by women; offering products and services for women) to be rented out at market rates;
  • Housing for visitors: rooms to be rented on a short-term basis at subsidized rates to guests of our tenants during conferences, performances, and other events; market-rate to others when the spaces are free;
  • Event space to be rented out at market rates when not in use by member organizations;
  • A restaurant or café with a healthy, organic cuisine.
  • Find out more here.

My initial thought was: Why diversify Kota’s activities? Isn’t this taking the core mission to entirely new direction?

In fact, Kota is joining  the numerous non-profit organizations that are defining themselves as social entrepreneurs, and their strategy as doing social business, for financial sustainability.

The buzzword social entrepreneurship has recently gained momentum due to three interlinked trends: 1) the growing global corporate sustainability movement, 2) growing awareness of global challenges and 3) the growth of impact investing. There are many variations of social entrepreneurial efforts, but their essence is clear: Working for a good cause but making financial sense. Or, as the  by the Nobel Prize winning social entrepreneur Muhammad Yunus, the inventor of the concept of microcredit puts it:

Social business is a cause-driven business. In a social business, the investors/owners can gradually recoup the money invested, but cannot take any dividend beyond that point. Purpose of the investment is purely to achieve one or more social objectives through the operation of the company, no personal gain is desired by the investors. The company must cover all costs and make profit, at the same time achieve the social objective, such as, health care for the poor, housing for the poor, financial services for the poor, nutrition for malnourished children, providing safe drinking water, introducing renewable energy, etc. in a business way.

The impact of the business on people or environment, rather the amount of profit made in a given period measures the success of social business. Sustainability of the company indicates that it is running as a business. The objective of the company is to achieve social goal/s.

Social business can thrive as a non-profit, by donations and volunteer work. It can be a hybrid, with a non-profit as well as for-profit arms. Or, it can be a business, but mainly strive for doing social good.  It can be a start-up. It can also be  a non-profit arm of an established for-profit company that, instead of engaging in philanthropy as a form of corporate social responsibility, is urilizing its core products or services for social good. Here are some well-known US-based examples that utilize different strategies for sustainability, all of them successfully. 

In today’s complex economic environment, relying on one main source of support is no longer feasible. But even more importantly, the Kota Project is about empowerment and sustainability both in its mission, as well as in its execution. That is why the Kota Project goes for the social business model.

 

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