WEEK 10 :  Hybrids and Social Businesses

Main Ideas and Topics of the Week:

This week we learned about two new styles of business that combines the for-profit and nonprofit sectors called hybrid businesses and social businesses. Hybrids are complex structures that have two legal entities, one for-profit and the other non-profit. The distinguishing factor of both is a social mission and the clear integration of practices or infrastructure from both sectors.

We learned that hybrids can be extremely successful, but they also have trade-offs. Sometimes their impact is secondary or even worse ineffective. This happens when the profit driving activities and the social activities conflict so one overcomes the other. 

The social business is a bit more straightforward in offering a model that looks to blend social value with profitability. We read about Muhammad Yunus who is one of the leaders of a social business. Hybrids and social businesses strive to find the balance of profitability while still addressing core social problems.

Reflection:

This week we watched the TED Talk by Peter Singer called “The why and how of effective altruism.”  He talked about the most effective way to give that will make the biggest impact- share what you have.  He shared how to balance emotion and practicality.  For example, he shared about a college aged student who gave one of his kidney’s and then posed the question should he feel bad that at 65 he has both of his kidney’s.  He calculated that the extension of life the student had given to others through this one kidney was the same as if he had given $5,000 dollars to the Against Malaria Foundation. He concluded that because he had given over $5,000 to that foundation as well as other effective charities, he didn’t feel so bad because his impact was as great (or greater) than the student who donated his kidney.

 

While I understand the point Peter Singer is making, I think he is forgetting one aspect of social change- individual people.  Fabio Rosa explained it best in an e-mail he wrote to David Bornstein in a response to his question about why Fabio works on the projects he does. He wrote back explaining that money only matters if helps to create a better world.  When people work together, they create powerful friendships that in the end bring peace, tranquility, harmony and optimism to a chaotic world. These individual efforts connect us in a profound way.  

 

Writing Prompt:

What is it about hybrids that make them so successful?

 

I think hybrids are so successful because enterprises don’t have to compromise on social impact for the sake of financial returns.  Hybrids allow for a flow of innovation as there isn’t a specific model that has to be followed, rather they can find ways to increase impact and revenue in new ways. I think the most successful hybrids are those that are headed up by strong leaders driven by life experience that leads them with purpose. 

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