Why is social enterprise important?

Social enterprises bring the self-sufficiency of for-profit businesses and the incentives of market forces to bear on global social problems in a way that neither pure capitalism nor pure charity has been able to match.

There is a great deal of interest in social enterprise today because this approach offers a new — and possibly more sustainable — path for us to address the world’s most pressing challenges.

These social enterprises deliver benefits in a self-sustaining way by using their revenues to finance activities that generate social benefit.

They can also scale to benefit large numbers of people by incentivising other players in the value chain and receiving financing from a mix of sources, including: consumers, franchisees, patent capital funds like Tandem, and commercial sources.

These are businesses with the potential to transform markets for social benefit.

Today, 1.1 billion people lack access to clean drinking water. 3.6 million people die each year from water-related disease. WaterHealth International is a social enterprise that uses franchising to deliver clean drinking water to small villages. WaterHealth provides village entrepreneurs with UV filtration technology, which is used to process and sell clean drinking water to remote villages at a low cost. Through its network of franchises, WaterHealth provides access to pure and safe drinking water to half a million people in 4 different countries.

While some charitable water projects languish because beneficiaries have no money to fix pumps when they break down, WaterHealth have plenty of technicians on-hand to troubleshoot equipment. This is because the empowered village entrepreneurs pay for maintenance using the proceeds from their businesses.

Waterhealth is one of many social enterprises emerging to provide innovative ways of delivering water and sanitation, prenatal healthcare, early education, and agricultural technology to disadvantaged communities that are out of reach of conventional businesses.

 

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Social enterprise business models

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What is social enterprise?

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