We are exposed to so much new information, concepts and ideas every day. One way the human mind copes is to lump similar things into categories, like baskets, and understand new ideas relative to the existing ones in the same basket. For example, processing a television commercial for a new car would go into baskets (almost like hashtags) along the lines of “car,” “automotive,” “transportation,” “big purchase,” etc.
Mentally, we have probably lumped businesses and charities into separate baskets. After all, they are fundamentally different, right? Most businesses exist to maximize profit while charities serve to contribute to philanthropic goals. Actually, the lines between these types of organizations have become increasingly blurred by a variety of forces.
One of these forces is social innovation. Failures in the traditional models of for-profit, government, and not-for-profit organizations have led to the emergence of social innovation, a novel solution to social problems that is more effective, efficient, just and sustainable than current solutions. As a result, we will be seeing more businesses that have social or environmental goals at the core of their purpose, as well as charities that are adopting more business-oriented models.
At the highest level, social innovation produces new ideas to address unmet needs. The blurring of lines between sectors is important because it allows new organizations to harness the best of all worlds: take what works and leave the rest behind. A well-known case study is the Grameen Bank, founded by Mohammed Yunus. It is defined as a ‘social business:’ a cause-driven business where the owners/investors can gradually recoup the money invested, but not beyond that point. It differs from the traditional approach to business, and it certainly isn’t a charity – this new model has some elements of both, and it works. What you end up with is a business taking on a social issue that previously may have only suited a purely charitable model.
As we imagine and create solutions to address the core social and environmental problems we are facing, we can feel empowered by the fact that we are not encumbered by prescribed organizational limitations. The traditional divisions that helped us navigate the complex world of business and non-profit organizations are disappearing, and that’s a good thing.