Donors are currently showing a very keen interest in social business and are adopting specific strategies and tools (Asian Development Bank, USAID, DFID, KFW and, just recently, AFD). Indeed, social business could be seen as a miracle solution in this context of fiscal austerity. But let there be no mistake: public financial support continues to be one of the conditions for its success.
Reconciling the social objective and the need for profitability
The aim of social business is, as with social policies, to address social problems, but at the same time by generating incomes that are essential to the sustainability of the project, based on an entrepreneurial economic model. It involves organizations with different statuses (associations, NGOs, cooperatives, enterprises…) which have a priority social (and/or environmental) objective and are seeking to achieve financial equilibrium in order not to be dependent on public financing.
While profit is not the primary objective, it is the way to ensure the autonomy of the project, as well as its growth if reinvestments are made in it. The beneficiaries of these projects can be clients (who are sold essential products at a low price), or employees (who are offered more than just a job : improved working conditions, return to work…), suppliers (who are offered stable outlets at a fair price, by helping them to structure their sectors), and external persons (who are offered products and services, or a share of the profits).