All you need to know about social impact startups and why they’re reinventing the business wheel
- Non-profit organisations, non-government organisations and social impact ventures are very similar yet different in their own ways.
- Social enterprises drive change while generating the potential for profit.
- Some multinational social impact ventures include TOMS and One Acre Fund.
- The business models of these social enterprises are focused on giving back through self-sustainability.
There’s a fine line between NGOs, NPOs and social impact organisations but the golden thread between them all is the will to make the world a better place. So what sets these three apart?
For starters, it’s their way of looking at business. A non-profit organisation, as the name suggests, is not for profit and if per say some profit is generated, it won’t be distributed between shareholders.
Similarly, a non-government organisation is a non-profit making entity, but it differs from an NPO in its focus. NGOs function completely independent from the government to advocate public policies, promote political participation, provide information or provide services overlooked by the government.
Social impact ventures on the other hand are companies that drive positive social and environmental impact while generating the potential for profit. So basically it’s a business that can succeed while pursuing to help others.
Here are three social enterprises that are blurring the lines between being provident and profitable in all the best ways:
TOMS is probably one of the most famous pioneering social impact ventures. While traveling in Argentina in 2006, founder Blake Mycoskie saw how many children grow up without shoes. From there, he created TOMS Shoes, a company that would match every pair of shoes purchased with a new pair of shoes for a child in need.
TOMS is formally defined as a for-profit company “with giving at its core” which allows them to sustain themselves rather than depending on fundraising for support.
One Acre Fund, East Africa
One Acre Fund is a social enterprise that supplies smallholder farmers with the financing and training they need to grow their way out of hunger and poverty. Instead of giving handouts, they invest in farmers so that communities can generate a permanent income through produce. What started out as a pilot group of 38 farmers in Kenya has grown to over 400,000 farmers in six countries across Sub-Saharan Africa.
Vava Coffee, Kenya
Who doesn’t love a good blend of Kenya’s finest coffee? But for a long time, the reality for smallholder coffee farmers in Kenya was earnings less than 35% of the international market value on their high-quality specialty coffees.
Which is why Vava Angwenyi, founder of Vava Coffee, decided to cause positive social and economic disruption within the coffee industry through her social enterprise. Vava Coffee buys and exports Kenya's finest coffee from small-holder farmers who have traditionally lacked access to fair markets.
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