How can organizations be social and still make money?
In Germany you always ask yourself the question of the color of money. Can money be good or bad? And if so, when is it good and when is it bad? Is it allowed to earn evil money with some good things or should certain projects fall under the protective concept of "non-profit" and thus be realized in corresponding legal forms?
The "social" sector is particularly riddled with these issues. It starts with nursing professions and ends as the managing director of an NGO- earning money is virtually taboo in the non-profit sector- and if, then one does not talk about it. It’s embarrassing that I do good and get paid for it. Completely wrong, we think!
As a social entrepreneur in particular, you are constantly confronted with the question of money. "What is social about you, you earn money??" is only one of them. We have talked to three social enterprises about this topic and have come to the conclusion that we are all riding on the same, uneasy wave..
Being social and still earning money, is that possible??
As a social entrepreneur, you usually produce a product or offer a service, just like any other business. The difference, however, is that profit is not in the foreground, but the social impact is. So can you earn money as a social entrepreneur? We asked.
Mogli inspire z.B. with their sustainable organic products children for food and nature, in order to bring healthy food back on the table respectively. hold there. We have spoken with founder Armin Steuernagel. Armin believes that some people ask about the compatibility of money and social issues in the first place because in the past – and even now – there are companies that claim to be "social" or "sustainable" but do so only for marketing purposes and not because they really want to change anything. Greenwashing you often hear! With Mogli, however, it’s different, he emphasizes: "We actually see our company as a non-profit enterprise… this is reflected in the fact that we don’t pay out our profits to ourselves, but see them as a start for new products/projects.". For Mogli is profit is not the purpose of the company, but means to be able to pursue the actual purpose "to inspire children for healthy foods. But it is also about more: "In the kind of economy in which we operate, i.e. in a sense economy, in which just not only the profits count, our employees and customers are of course very important and are also treated respectfully and are not seen only as instruments.".
Florian Henle from Polarstern also makes it clear: "We are a social enterprise because we give equal weight to economic, ecological and social components, and that’s how our products are set up." Polarstern earns money through renewable energies. But they also help developing countries to switch to renewable energies, and the customer knows and pays for that. "We also prefer to work with companies that just also tick exactly the same" Florian emphasizes: "Money in itself is nothing antisocial, it depends on what you do with it."
The situation is similar at MeineKleineFarm. We spoke with founder Laura Kubke, who is also a social entrepreneur and can’t understand why some people even ask this question. "We don’t even ask ourselves this question anymore, because everyone has to earn money and I prefer to earn it with something I stand behind 100% than with something I have neither a connection to nor a good conscience about."
Conclusion then: Being social and earning money is not only possible, but a must! Of course, none of the entrepreneurs is exclusively about profits, they could achieve that much faster elsewhere, but it is about advancing the sense / purpose of a social business idea and doing something good for the community. And aren’t the people who think this way the ones who should be becoming millionaires?? We hope so!
Why one chooses the economic way and does not simply found an association?
Another question with which social entrepreneurs have to deal again and again. Who does not know that, straight if one has its Gegenuber so far that it understands that the profit of the own enterprise is only secondary and one pursues above all a sense, wonders it, why one does not then simply an association founds.
Florian also thinks that this is a legitimate question: "We want to think like entrepreneurs and be independent, we couldn’t do that as an association". Another uniqueness may be in the product for some social entrepreneurs. You are not only producing a product that is good and sustainable, but which should also change the behavior of the consumer, the market and ultimately the world. In Armin’s words: "We want to make something that has such value on its own that people are willing to pay for it". We couldn’t be more convinced – YES let’s all offer or produce products that are so great, so useful and valuable that others are happy to pay for them and you don’t have to live off donations and being nice.
MeineKleineFarm could also have founded an association, but they want to change the behavior of the consumer with the actual "problem product" – less meat consumption through the sale of meat, is their motto. A difficult model with which they make the consumer a "prosumer," i.e., create awareness. They don’t want to turn anyone into a vegetarian, they want to make people more aware of their consumption, and the best way to do that is through the product itself. The non-profit character of the economy can only work if people actually buy the products and if they prevail over their competitors. Your Competitiveness is central to their message. A clear case for a social business.
"I believe in good business and I am against the assumption that on the one hand there is the evil economy and on the other hand there are good NGOs that take care of cleaning up all the shit that the economy produces" says Armin. We think this is an important point, because the economy is an integral part of our society and does not have to be thought away, but perhaps only reformed from the inside. "We will only be able to change the world if we bring the economy itself back to a sensible form, where it can work out of itself Serves people’s needs and does not become an end in itself" Armin speaks from the soul. Maybe tomorrow there will be no need for associations to improve the world, but maybe there will be such a big paradigm shift that "our economy will change from a profit driven economy to a sense driven economy, because especially the young people who are now entering the job market don’t want to work for someone to stuff their pockets" argues Armin. And thus the world would be a very large piece healthier.
This article was created in cooperation with Triodos Bank. The social enterprises in this article are all business clients of Triodos Bank. Triodos Bank is a sustainability bank that strives to find innovative ways to put money to work for society and a better future. And this with the greatest possible transparency – by reporting on every loan granted. The Nachhaltigkeitsbank only supports projects and companies with loans that bring about positive changes for people and the environment in the long term.
Mogli produces sustainable organic food for children to help families put healthy food on the table and to raise children’s awareness of the healthy use of food and nature. Profits are reinvested in more kid-friendly products to educate people about nature and healthy foods.
The goal of MeineKleineFarm is to make the meat lover also an animal lover. It’s not about banning the consumption of meat, it’s about raising awareness about it. The profits flow into projects such as "School Pig", where already in childhood more conscious meat consumption is to be conveyed.
Polarstern is Germany’s only energy supplier that relies entirely on renewable energies for electricity and gas. The profits are invested, among other things, in projects in developing countries, where they are used locally to help people switch to renewable energies.