Social Business Business goal: a better world

The trio of founders of “What Do I Have?”
The trio of founders of “What Do I Have?” | © Amac Garbe

They are organised like small companies, but work rather for others than for their own profit: more and more projects to help eliminate social ills are arising under the rubric of social business.

A financial investor would probably shake his head: in the Vegetable Academy, students become acquainted with local farmers and learn from them about market gardening. The association AIAS makes students into potential life-savers by organising registration actions at universities for stem cell donors. And in the programme Canto Elementar senior citizens have come together to pass traditional songs on to the next generation. Exciting ideas that promise many things – but not great financial profit. Nevertheless, they are among the business concepts that the German Federal Chancellor Angela Merkel honoured in June 2014 as part of the competition Start Social. Those responsible received a grant to develop their project with trainers from the private sector. Thus many of these ideas can continue to live and grow under the name of social business.

The term comprises initiatives that are often organised like small companies. The difference from traditional companies is that a social business is designed to eliminate social ills or solve environmental problems. In Germany social businesses often address themselves to issues of education and integration. If they generate profits, these flow back into the project. The real yield is social progress.

Muhammad Yunus made the world aware of the concept

The initiators of such projects are often young people who come from their training or university studies full of enthusiasm. But older people, who have long held a job in an ordinary company, are also among their number: “Many employees desire to have a job that makes some sense”, says Laura Haverkamp. She works for Ashoka, an international non-profit organisation for the promotion of social businesses. Muhammad Yunus is also one of the founders who was supported by Ashoka. Through his micro loans, which today help people in many developing countries to build a life for themselves, he made the world aware of the concept of the social business. For his engagement in Bangladesh, Yunus was awarded the 2006 Nobel Peace Prize.

Some German social business projects have grown over time from regional initiatives to nation-wide companies. For example, the company Wellcome from Hamburg, founded in 2002, now has more than 250 teams who support young families in the initial period after the birth of a child. But even successful social businesses know that a good idea is not enough; it must also be realised professionally, not least in terms of business. Although it is also common for initiators of socially oriented start-ups to develop financial plans, these, in contrast to the concepts of many ordinary companies, are not designed to earn maximum profits and stimulate rapid growth. “The plan can also include donations or government funding as sources of financing”, explains Haverkamp. In addition, she recommends keeping the organisation lean. “It’s a matter of remaining flexible – and having a keen sense of when to bring the appropriate colleague on board.”

Support from the private sector

Often other businesses are supporters. For them, the engagement then comes under the heading of corporate social responsibility. Thus, for example, the software maker SAP is a partner of the programme Social Impact. Among other things, grants provide young social business people with the time to plan and realise their projects. The Deutsche Bank Foundation also supports engaged company founders. At the internet platform Social Impact Finance, they can look for funding opportunities.

If all goes well, however, a social business can make itself superfluous. The operators of the successful website Was hab’ ich? (ie. What Do I Have?) hope that they will eventually no longer be needed. At their online portal, they counsel bewildered and anxious patients who fail to understand the technical terminology in which their diagnoses have been couched. A team of doctors and medical students in advanced semesters “translate” the findings into everyday language. The goal is to make this new doctor’s German common in the medical profession.