The Business of Good Transforms the Charity Mindset

The Business of Good: Social Entrepreneurship and the New Bottom Line challenges the assumption that to “do good” a business can’t be profitable. As the book cleverly points out, we applaud business owners who build the trendiest app and make millions. We don’t applaud when a charity or business, trying to solve a deeply entrenched social issue, makes even a penny in profit. These assumptions, according to the book, are destroying our ability to scale the kind of help we need to conquer global social issues like poverty, access to education and access to financial services.

What is The Business of Good About?

The Business of Good explores the rise of social enterprise as a viable way to solve social problems and make a profit. Similar to another book on the topic, Capital and the Common Good: How Innovative Finance Is Tackling the World’s Most Urgent Problems, this book argues that social enterprise can fill in funding shortfalls that are not met by donations or government-backed aid. In The Business of Good, the key is to transform how we think about charity and business in the first place.

Understanding how we can transform the concepts of charity and business begins with understanding how these concepts were linked in the past. Charity and business, from their early beginnings in America, have always had a rough-and-tumble relationship. Businesses gave to charities, but had to be asked nicely first using the right words. Charities, who depended on businesses for support, became so focused on fundraising, they couldn’t focus on thriving or growth. This phenomenon, recently expounded by Peter Buffett and explored in his New York Times Op Ed  the “Charitable-Industrial Complex“, is one in which the “haves” give a little bit of their leftover money to the “have nots” so they can feel less guilty about their wealth.

The way out of this “complex” is to embrace “Capitalism 2.0”, capitalism powered by technology, social media and entrepreneurship. Under Capitalism 2.0, the goal isn’t simply to increase stakeholder profits. The goal for a business is to increase innovation to solve society’s problems in addition to making a profit. The goal for nonprofits isn’t to simply survive but thrive.

The time and the environment, — described in the book as the “Great Convergence” —  are ripe for this change if we take the steps to make it happen.

Author Jason Haber is an entrepreneur whose experience crosses a lot of boundaries including social enterprise, government and real estate. He started Rubicon Property, a social enterprise in real estate in 2010 in addition to serving as an adjunct professor and frequent news commentator.

What Was Best About The Business of Good?

The best part of The Business of Good is the author’s optimism in the topic itself. Jason Haber shows enthusiasm throughout the book, backing up that enthusiasm with powerfully inspiring stories of businesses from around the world that embrace social entrepreneurship as a way of life (including d.light, Toms, M-Pesa) and others. The book doesn’t stick to the typical “corporate social responsibility” big-name examples. Rather it shows social entrepreneurship at varying levels of growth, from the small business owner in Africa to a global network of sustainable investors. This provides a more comprehensive view of the social enterprise field.

What Could Have Been Done Differently?

While the book does an excellent job at detailing the positive potential of social enterprise and “Capitalism 2.0”, it leaves out some of the negative potential (aka failures) that might occur. To its credit, the book devotes a small section to the risk of failure, but The Business of Good doesn’t provide enough examples of social enterprises that failed. What if a social enterprise liked Tom’s (which donates a shoe for every shoe bought) failed? Providing this kind of insight could encourage social entrepreneurs to share more of their journey so they can guide others.

Why Read The Business of Good?

If you are someone inspired by the potential of a social enterprise, this book will provide the motivation and incentive to get started. Using a variety of successful socially-oriented businesses from around the world, The Business of Good explores why it is the perfect time to take advantage of the “Great Convergence”, the “perfect storm” of technology, social media and generational awareness that can foster a transformation in how we look at solving the world’s problems. The Business of Good won’t provide everything you need to launch a social enterprise, but it will provide a lot of resources, stories and basic principles to help you get started down the path.

This article, "The Business of Good Transforms the Charity Mindset" was first published on Small Business Trends