NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Friday, January 2, 2015

When it comes to our greatest social and environmental challenges, let’s first ask: What problem are we trying to solve? Once we know where we’re headed, we can better understand which methods and resources are most needed. Charity and social enterprise both have critical roles. Increasingly, we are seeing the ways charity and social enterprise and investment can work together effectively – along with smart government policy – to drive real and lasting change.

Grants and charity are important and effective in providing immediate basic services, such as food, shelter and sanitation. But to promote entrepreneurial activity, job creation and long-term sustainability, market-based solutions can be more effective. Social enterprises, or businesses focused on both social good and the bottom line, have the potential to have a huge impact. Globally, social enterprises like Bridges International Academies andd.light are businesses that provide quality education and affordable, solar lighting to low-income communities. Others, like Hapinoy, create micro-entrepreneurs in communities, increasing incomes and opportunities. In the United States, social enterprises like Revolution Foods provide healthy meals to children in schools. All of these social enterprises are creating new markets where charity alone is not sufficient and the market has failed.