A Social Solution, Without Going the Nonprofit Route is an article in the March 4th issue of The New York Times that examines social enterprises. D.light Design (see previous Green VC coverage) and MIA Consulting are ventures highlighted in the article. The article also examines issues surrounding whether a for-profit or non-profit model is best suited for a venture with a social purpose. One relevant excerpt:
Experts concede that not all social problems respond well to the for-profit model. One example could be early childhood education. "If you set it up as a business, you might be able to raise money more quickly and grow more quickly," said David Bornstein, the author of "How to Change the World" (Oxford University Press, 2004), an often-cited book on social entrepreneurship. "But if you want to be profitable, you might find that you have to make choices that diminish the quality of your program and then children won’t learn to read as quickly. While Stanley Kaplan can make a fortune selling education to well-heeled people, providing the same services to low-income kids would probably not provide a very good income."
Mr. Bornstein said it came down to one crucial question: "As you grow, will the economics of your business work in favor of your mission or will they work against it? In the case of providing access to solar energy for people in villages, the bigger you get, the cheaper your product will be, so the economies of scale make sense."
For more information:
- A Social Solution, Without Going the Nonprofit Route (The New York Times, March 4, 2009)