A Path Appears: Transforming Lives, Creating Opportunity

This means a for-profit business that focuses on addressing a social problem. The authors explain that such hybrid organizations have begun to spring up in recent years after a long tradition of nonprofit and for-profit entities being very distinct organizations. This can take the form of private companies like Greyston Bakery, founded by Bernard Glassman, which hires homeless people as its employees. As a private business, its mission only has to be approved by Glassman. Still, both aid workers and businesspeople find fault with the model, saying that such an organization is, by definition, contradictory because it blurs its purpose. Glassman’s idea, however, was for Greyston Bakery to be self-sustaining: running on profits and not having to rely on donations to do its work in fighting homelessness.

A social business can also take the form of a corporation addressing a social issue. This is illustrated by the Grameen Danone Foods venture, a partnership between the yogurt company Danone and Grameen Bank, founded by Muhammad Yunus to provide microfinancing. The goal was to fight malnutrition among children in Bangladesh while also providing jobs. Special yogurt containing micronutrients was produced locally and sold to families by women who traveled to rural villages. The idea was to at least break even; Danone did not want to subsidize the project by losing money, but it agreed to forego a profit if the venture could be self-sustaining. Using corporations in this way is more controversial because they are publicly traded and owned by many shareholders. The influential economist Milton Friedman vehemently opposes this model, calling it “fraud” that harms shareholders.