Nobel laureate Muhammad Yunus is out to redesign the world. Again! First, with Grameen Bank, he proved that the poor, especially women, are bankable, have near 100% repayment record. He even turned 200,000 beggars in Bangladesh into canny salesmen and saleswomen.
Now, his ambition is of planetary proportion – Zero Poverty, Zero Unemployment, Zero Carbon Emission in the next two decades. This is not a dream or a plan on paper – he is avidly promoting social business as a revolutionary idea for redesigning society, business and economy.
The social business movement started a decade ago or so but is catching up traction only now. Perhaps the world has run out of ideas and repurposing of old ideas is not working in what appears to be mega problems that seemingly have no lasting solution. Only a radically new approach is needed to address gaping problems such as inequality, poverty and climate change.
The big question is – where will the money to fund social businesses come from? As it is, venture funding, angel funding or impact funding is hard to come by unless the returns are a minimum of 3X.
Prof. Yunus was in Bangalore to launch a social business fund at the Indian Institute of Management early February 2017. One of his social business funds has been in operation in Mumbai for the last eight years. The Yunus Social Business Fund was launched in 2014 and since then 12,000 investors have joined.
Here’s Prof. Yunus’ innovative ways of find funds for launching thousands of social businesses across the world. He has already shown that it works wonders in Haiti, Columbia and in Europe. It’s a tested model already. It only requires to scale big time and that’s what Prof. Yunus is busy with these days.
While philanthropy is great, the money given doesn’t come back. It’s a one way deal. Each year, Prof. Yunus estimates that $ One trillion is given away as charity across the world. “Can we have some portion of it (even 10%) invested in social business? In social business, invested money is recovered and reinvested. One tenth of one trillion dollar can solve many major problems currently faced by poor countries and communities. His new line to donors is, ‘Don’t give it to charity give it to social business.’ He is happy that currently 139 billion dollars are pledged for targeted philanthropy. He expects some of it to be diverted financing social business.
Despite pension funds’ massive size and influence the problems faced by the retired population remains. Prof. Yunus suggests that even if 5% of the earnings from pension funds are given to social business funds, he believes, most of the problems faced by the older people can be taken care of.
What is a social business?
Prof. Yunus is clear in his mind that promoters of social business cannot take any profit. They have to focus on getting the investment back which is then reinvested. However, promoters can take salaries. But he said, he is not averse to hybrid models that can solve social problems.
“When you take off your money-making glasses and wear the social business glasses, you can see much more and make anything happen with your creativity,” he said during his talk on ‘Building Bridges – Social and Capital’.
Typically, a social business funding proposal is not rejected. It works as a partnership between the promoter and the Fund. The Fund offers financial management support while the promoter takes care of the operations.
How a strict no-profit social business model picks up will be interesting to watch. The hybrids, loosely called social enterprises, are growing in strength.
The Yunus Mantra
• All human beings are essentially entrepreneurs, they are not born to work for someone
• Job is an obsolete idea
• Social businesses can remove poverty from the face of the earth
• Financial resources are plenty if one has a good heart
• Social business needs only creative thinking. There is enough money chasing it.
• Half the charity money, if given to social business, can solve all global problems
• 5% of Pension Fund earnings into social business can solve all the problems of old people
• Retirement is an obsolete idea. Human beings can work till their last breadth
• The old world is based on greed. The new one can be built by sharing and caring
Ugly Vegetables, Odd Potatoes
McCain Foods Limited, a Canadian MNC, is one of the world’s largest manufacturer of frozen French fries and other potato specialties. It picks only potatoes of certain shape and size and discards others, which is more than 26% of the total produce, as waste. Recently, a senior executive of the company had a brainwave. He came up with a social business idea in which he collected the discarded potato and turned it into soup. He hired a well-known chef to give special touch to it. Today, the soup is being sold in supermarkets across Europe.
It’s the same with vegetables in Europe. Supermarkets don’t buy 30% of the vegetables which are of odd shapes and they usually go waste. The executive buys such vegetables, cuts them into pieces and sells them in the supermarket as ready-to-cook vegetables. The “Eat Ugly” movement has gathered momentum.
Jordan Figueredo is the founder of @UglyFruitandVeg, a fun Twitter account that collects and posts pictures of wonderfully imperfect fruits and vegetables as a reminder that these exist and should be part of our regular diet. It is part of a broader campaign called End Food Waste. Nearly 15% percent of all human-caused greenhouse gas emissions is said to come from the food we never eat.