Several posts ago, we blogged about the idea of using for-profit business models for social benefits, one example of this being Ben & Jerry’s partnership with the ONE Campaign.  While we salute this effort and contribution to improve the quality of life, we posed the following question: Is there a more effective way to use business for social ends?

Muhammad Yunus, pioneer of microfinance and winner of the 2006 Nobel Peace Prize, recently published a new book titled “Creating a World Without Poverty – Social Business and the Future of Capitalism.”  A concise and informative synopsis of the book can be found at the Social Ecosystem Blog.  I heard Professor Yunus speak a couple of months ago at MIT about this new model for social business enterprise.  The basic idea is that instead of generating profits for shareholders, Yunus’ model generates profits which are immediately reinvested into local development projects.  What’s more, the company is actually owned by the people it serves. 

Flickr image courtesy of danone.communities

In a partnership with Danone (another dairy-product company. . . coincidence?), Yunus helped to create a company called Grameen Danone Foods (or Danone-Grameen Foods, depending on who you’re talking to) under the social business model.  The company produces a nutrient-fortified yogurt, which is sold at an affordable price (about US $0.05 per 80 gram cup) to poor Bangladeshis.  Grameen Danone Foods employs Bangladeshis at its plant and also creates jobs for local farmers and distributors.  Additionally, the use of clean energy and sustainable environmental practices are a significant part of this holistic business model.  Yunus discusses this model briefly in an NPR interview and a YouTube video published by Ashoka.

This could certainly signal a paradigm shift for socially-minded business; what remains to be seen is whether this model will become the new foundation upon which for-profit ventures “do good.”  If so, what will be the new role for NPOs who have traditionally delivered these products through aid?  Will NPO and for-profit partnerships become rare if social businesses are now fulfilling this role, or will we begin to see partnerships generating entirely new (social) businesses like Grameen-Danone?  See also an interesting discussion by Pete Burden regarding marketing for social business on the Just Means blogroll.