Over the holiday season, a day in a new city and a brief encounter with a man named Victor taught me an important lesson, managed to tweak my perspective and granted me inspiration.
Victor is a street vendor who was selling a magazine, which I bought simply out of curiosity. What makes Victor unlike other vendors I had come across was the fact that he was part of an organized network and a registered charity, which exists specifically to help vendors have greater control of their lives.
The Big Issue is one of the U.K.’s leading social businesses, which started up 17 years ago in response to the growing number of people sleeping on the streets of London. The business offers homeless and “vulnerably-housed” people the chance to earn a legitimate income by distributing a weekly entertainment and current events magazine for them to sell. The Big Issue sellers (the vendors) buy the issue from the company, sell it for double the cover price and keep the difference for themselves. Vendors receive training and must sign a code of conduct, creating an atmosphere of employment and trust.
The company’s slogan is “A Hand Up Not a Handout,” as it feels that earning an income is the first and best way to empower the homeless. Thus, this initiative is able to tackle the issue at its core, by helping people to help themselves. The magazine even includes contributions by homeless people — anything from poems, to editorials to photographs. One of Victor’s photos had been published in a previous issue, which he had carefully saved in a plastic bag in his backpack. Another aim of the magazine is to alter the public’s perception of homeless people, including panhandlers and street vendors — a goal I believe they have most certainly achieved.
The Big Issue is currently supporting close to 3,000 homeless people across the U.K., according to their website. The magazine has risen in popularity throughout the U.K. and is now read by over 670,000 people each week. Today, the company is an international entity, as a version of the magazine is published in Australia, Japan, South Africa, Kenya and Malawi. While it doesn’t change the fact that poverty and inequality continue to be pervasive issues in the country, it most certainly creates a more inclusive and caring community.
The idea, which is so simple, made so much sense to me and I wondered why it seemed so innovative.
A “social business” is a fairly new category of business that has been gaining force in countries across the world. The concept may at first come across as a bit strange, even foolish for people who are used to a highly capitalist economy, where business is equated with profit-maximization.
The fuel driving social businesses lies in the belief of a cause, rather than personal gain or profit. Investors or owners of such businesses focus on the realization of a social objective through the operation of their company. Although they can gradually recoup money they have invested, they cannot take any profit beyond the amount they invested.
Social businesses in various regions of the world have turned to objectives such as healthcare, housing and nutrition for the poor. Ultimately, the premise of social businesses relies on the belief that entrepreneurs can be motivated by something other than the profit they personally receive and can feel equally satisfied with the realization of cause-driven rather than profit-driven goals.
Muhammad Yunus, an economist from Bangladesh, is the founder of the Grameen Bank — possibly the greatest success story of a socially minded institution. The Grameen Bank is based on the belief that granting small loans to people lacking collateral is the first step to helping the poor regain financial stability. This theory, commonly known as “micro loans,” which earned itself the Nobel Peace Prize in 2006, ultimately established a model for future businesses. If investors are able to look past the idea that the accumulation of profit is necessary to run a business, the concept could play a major role in eliminating social injustices. By taking advantage of the business format, social businesses can more easily address people’s needs in an efficient and sustainable fashion.
Yunus identifies two types of social businesses — one dealing solely with social objectives, and another, which includes any profitable business that is owned by the disadvantaged, thus granting them direct or indirect benefits. He notes that the social business is not intended to monopolize the market, but gives consumers a new option and adds to the competition.
“One thing is very clear to me — that with the social business taking off, the world of free market capitalism will never be the same again, and it then will really be able to deliver a deathblow on global poverty,” writes Yunus. “It will accelerate the process of poverty eradication to an unthinkable pace using the same market mechanism which accelerated the global prosperity for the rich in the first place.”