For-Profit vs. Social Enterprise
For-profit companies exist to maximize profits within certain boundaries. Examples of boundaries:
- You are not allowed to murder a union-leader in the pursuit of profits, but you are allowed to serve non-organic food in your kitchen, which means having some farmer spray pesticides on his crops, which gives local residents cancer, which indirectly kills people.
- You are not allowed to steal money from people, but you are allowed to hire a cut-throat accountant to help you keep every possible cent away from the IRS.
- You are not allowed to discriminate against women in any overt way, but you are allowed to “encourage” your employees to work as many hours as you can get away with, thereby quietly making people choose between parenting and career progression.
- You are not allowed to collude with your competitors to fix prices, but you are expected to somehow be aware of prevailing market rates and how your company compares to its competitors.
The interesting thing about these acceptable boundaries within which we are allowed to maximize profits is that they are an ever-changing social construct. There was a time, for instance, where people didn’t really care that people worked all day in the coal mines without respiratory protection [shout-out to Michelle Brown for that example]. Society’s views on worker rights shifted, and once a critical mass of consensus was reached, laws were enacted to reflect this shift in socially acceptable boundaries within which to maximize profits.
Then there is this other thing called a Social Enterprise, which is an organization that plays the game of capitalism for a philanthropic goal. The entire purpose of their organization is to achieve positive social change of some sort.
This is slightly different than a “non-profit organization,” because a social enterprise doesn’t necessarily need to be classified with the IRS as non-profit. Also, most non-profit organizations operate primarily through donations, whereas a social enterprise actually operates like a regular business, selling goods or services for money.
The problem is that a company isn’t necessarily one or the other; there is a spectrum that runs from “greedy for-profit company” to “pure social enterprise.”
Let’s think about Boiled Architecture. I founded this company as an act of advocacy. This company is devoted to increasing collaboration and transparency within the building industry.
But this company is not only focused on achieving positive change outside our organization; it is also deeply devoted to doing good within our organization.
As we establish our company’s financial strength, I intend to pay everyone above industry average and have them working fewer hours than industry average. That includes myself.
Usually wanting to make more money and work less don’t count as “philanthropy,” so Boiled Architecture wouldn’t be called a Social Enterprise.
Does that sound greedy to you? That could be because you’re old. Just kidding. No, but seriously.
There’s a common criticism lobbed at Millennials that we are “lazy” because we aren’t willing to work 60 hour weeks.
[Incidentally, my age puts me just between Generation X and Generation Y/Millennial, but I identify most strongly with Generation Y/Millennial.]
Right, I’m lazy. I founded a company, while getting my MBA on the weekends, training for half marathons, and maintaining a healthy marriage. That was sarcasm.
Boiled Architecture is an organization dedicated to collaboration and transparency in the building industry, and dedicated to the idea that people deserve the right to be happy, well-rounded, healthy people.
People deserve the right to raise children without being pushed off the career track. People deserve the right to have hobbies and friends and books. And they deserve the time they do spend at work to be filled with a sense of pride and respect. That is the philanthropy I am working toward.
Does that make Boiled Architecture a corporation or a social enterprise?