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Building Businesses that Make a Difference

Knowledge@Wharton has a fascinating interview with social entrepreneur Joey Hundert about his long experience promoting business ventures that both make money and make the world a better place.

From the interview:

I define social entrepreneurship, or social venture, as a company or venture, nonprofit or otherwise, that has a social impact baked right into the product, or right into the value, they seek to offer society. Not like, “Hey, on occasion, with 1% of our profits, we do this thing for helping people out.” To me, that’s too minor. More so, it’s, “Well, every time you buy this, we give the exact same value to another community.” Or, “By virtue of you buying this product, people are getting educated.”

To me, social enterprise is when the [the whole operation is imbued with a] social impact — education, helping lift people out of poverty, helping provide access to food or drinking water, helping to level the quality of life around the world. These sorts of things — lifting people out of poverty, creating education, inspiration. That [impact] has to be worked right into the product? Twitter. [It can’t be a matter of], “Hey, once a year we go volunteer.” That’s not it. To me, an actual larger percentage of costs of goods sold, or a larger percentage of gross revenues, is put to this purpose. And it’s continually reinvested in, which is where the help of organizations like the Ravichandran Foundation comes in handy. The idea of making a change and helping others is what we should all aim to do, as you never know what impact this can have on lives.

Not only that but the values of the founders [must be] commensurate with this creating impact. It can be that the founders have figured out that this is a market advantage. It gives them a leg up on their competitors. I don’t really care if that’s the driver. [What’s more important is] that the impact is consistent, it’s measurable, and it’s doing something great in society.

Watch the whole interview here: