A growing number of entrepreneurs are embracing the idea that it is possible to make money while also creating a positive impact in their communities. Founders who do this are known as social entrepreneurs, but sometimes being a social entrepreneur can come with a sense of guilt.
The guilt stems from the idea that in order to do good in your community, you need to be a nonprofit organization. But the reality is that there are many organizations, startups and entrepreneurs who can create businesses that make a profit while making a positive difference.
“I’ve always liked the quote, doing well by doing good,” Said Fonta Gilliam, Founder and CEO of Sou Sou. “We really tried to embed that mantra into our business model.”
Gilliam created a company that modernizes traditional savings and loan models in cultures around the world. Her business uses a double bottom line, which incorporates both making profits and making positive changes.
On the GIST TechConnect: Turning a Profit While Doing Good, Gilliam, along with a panel of social entrepreneurs, explained that making money sometimes needs to come before doing good.
“When you’re a social enterprise, you’re running a business first and foremost,” said Gilliam. “You do have to focus on the business model, because if you don’t, you run the risk of not being able to maintain your business or attract the investment you need to grow or scale – and then you’re not helping anybody.”
Gideon Taub, founder and CEO of Pinkaloo Technologies, agreed with Gilliam’s assessment about the overall viability of a startup.
Pinkaloo Technologies was created to help businesses manage its own charitable giving or the charitable giving of its employees. Taub pointed out that when his company was founded, they focused on making a strong business first, and then determined how to maximize its social impact.
“If you go out of business, you’re not making any impact at all,” said Taub. “First and foremost, make sure that you can be around for the long haul, and then after that seek to optimize maximizing impact, given expectations of customers, investors and all of those folks.”
But this approach, the panel explained, can make some social entrepreneurs feel as though they are taking advantage of a bad situation. If that describes you, this panel said you shouldn’t feel that way.
“Most people who want to start their social entrepreneurship or social project, they always think making a profit out of it is something wrong or something that we shouldn’t be doing,” explained Laila Akel, co-founder and COO of RedCrow. “I think this is one of the misconceptions of the idea itself, because making a profit is not shameful.”
Akel’s company RedCrow, based in the West Bank and Gaza, is an application that makes money by warning people of potential dangers in their communities. Akel explained that her company not only makes her community safer, but because it is a for profit organization, it also has a positive economic impact in her region.
Akel pointed to the fact that startups and entrepreneurs provide economic stability, create new jobs and can even provide workforce training. These are all positive social impacts that stretch beyond a company’s business model.
“There is more than one way to serve your community with the project that you’re making, and making a profit out of it doesn’t defeat the purpose,” said Laila.
So if you have a business idea that has a positive social impact, don’t feel guilty about making a profit. The GIST TechConnect panel explained that making money may, in fact, be what keeps your company viable long enough to make lasting changes.
If you want more advice on becoming a social entrepreneur, you can watch the full TechConnect or excerpts of the TechConnect by following this link.
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