Social enterprises are unique because, unlike other businesses, they run on certain principles. Nobel Peace Prize laureate Prof. Mohammed Yunus identified social enterprises’ seven principles, which define the business’s purpose and modus operandi. They include:
- The business objectives and purpose is not to maximize profit. Instead, it’s to alleviate global issues that threaten people, such as poverty, education, health, technology access, and environment.
- The enterprise must be financially and economically sustainable. It means that the organization’s cash flow must be in line with the programs it aims to fund. With financial sustainability, social enterprises won’t need outside funding.
- The investors in a social enterprise will only receive their investment amount. They won’t get any dividend on investment.
- Once the business pays back investment money, all profits will remain with the company for scaling and improvement.
- Social enterprises are gender-sensitive and environmentally conscious. They are to tackle gender discrimination and are responsible for the well being of the environment either through direct or indirect actions.
- The workforce or employees within the business will receive fair wages in line with the industry benchmark. Also, they’ll get better working conditions.
- Organizations that work for a purpose or champion a social cause do it with joy.
Social enterprises make global impacts through the different social business models they employ. Through their sustainable revenue generation attribute, they fulfill their primary objective of creating social change.