Extracted from Building Social Business
By Muhammad Yunus
A social business has investors and owners but they don’t earn a profit, dividend, or any other form of financial benefit. The investors in a social business can take back their original investment amount over a period of time they define. It could be a very short period, such as one or two years, or a very long period, as much as fifty years or more. But any increase in the money going to investors beyond the original investment disqualifies the business from being a social business.
This even applies to an adjustment for inflation. In social business, dollar is a dollar is a dollar. If you invest a thousand dollars in a social business, you’ll get back a thousand dollars – not a penny more. We are strict about this because we want to make it very clear that the notion of personal financial benefit has no place in social business.
We have formulated the following seven principles of social business which present its key characteristics.
The business objective is to overcome poverty, or one or more problems (such as education, health, technology access, and environment) that threaten people and society – not to maximize profit.
The company will attain financial and economic sustainability.
Investors get back only their investment amount. No dividend is given beyond the return of the original investment.
When the investment amount is paid back, profit stays with the company for expansion and improvement.
The company will be environmentally conscious.
The workforce gets market wage with better-than-standard working conditions.
Do it with joy!!