One of the most basic questions we get asked at Funds2Orgs is what the difference is between a social enterprise and micro-enterprise. We know that it could be a little confusing, but we’re here to help.
Applying Business Strategies
Let’s begin with the work and objectives of a social enterprise. There are sometimes different definitions for the meaning of a social enterprise, depending on the country, but generally speaking in the U.S., this type of organizations applies business strategies to not only make money but also to improve society. Social enterprises can be both for-profit or non-profit entities. Funds2Orgs, for instance, is a for-profit social enterprise that is in business to make a profit but also to improve the situation of people living in poverty in developing nations.
One of the ways we’ve decided to make a social impact, aside of the opportunity we provide to micro-entrepreneurs in developing nations is to create the Funds2Orgs Micro-Enterprise Curriculum for educators across the U.S. The curriculum is intended for home schools, elementary, middle schools, and high schools. And because it’s aligned with Common Core, it meets the educational standards for subjects such as Math, English, Science and Social Studies.
Social enterprises are all about providing innovative solutions to the intractable issues facing society as a whole, such as poverty, access to clean water, medicine, education, etc. By applying market strategies to find solutions, money and commerce are a fundamental aspect of the work that is done. As an example, even in a non-profit social enterprise, an organization may help toward the eradication of poverty by selling the products or people in developing nations to people in a larger market, such as the United States. In other words, a non-profit social enterprise could create a platform that allows families living in poverty to find a market for their products outside of their local communities.
A social enterprise helps to improve the world in the following ways:
- Creating jobs
- Protecting the environment
- Providing a bridge or opportunities for jobs
- Reinvestment of profits into a community in a developing nation
- Providing vital services
The idea of micro-enterprises has been around for a long time and it’s not a new concept. Micro-enterprise in developing countries like Haiti, India or Uganda is critical because of systemic poverty, which means there are limited work opportunities and even education is not guaranteed to every child, which only makes the work situation more challenging when people come of age.
Micro-enterprises are small businesses and they are usually run by one or two people. Sometimes, if there is the success, you might get family members who help each other with employment through their micro-enterprise. It’s essential for people all around the world to make a sustainable living and micro-enterprises provide people a chance to create their own work opportunities so they can have some type of a living.
Funds2Orgs and Micro-Enterprise
When an organization does a shoe drive fundraiser with Funds2Orgs to raise money, the group will collect gently worn, used and new shoes. Those shoes eventually get picked up by Funds2Orgs and consolidated with thousands of others from other shoe drive fundraising events. Funds2Orgs issues a check to our partners for the footwear collected.
What happens next is vital to our work. All of the shoes collected in shoe drive fundraisers in the U.S. and Canada are shipped by us to partners in developing nations. The shoes are then sold for a fraction of their original cost to hub operators. Remember, this is about providing an opportunity for people to make money, so it’s essential that commerce be part of the equation. The hub operators purchase hundreds of thousands of shoes from Funds2Orgs and then resell them to small micro-entrepreneurs in their communities with a small markup who, in turn, sell the footwear for a profit.
Some of the micro-entrepreneurs we’ve worked with in developing countries have gone from earning less than $2 a day for their families, which is considered extreme poverty, to over $60 a day––a sustainable living wage.
That’s how social enterprise and micro-enterprise organizations work, and more specifically, how Funds2Orgs (social enterprise) partners not only with you but also micro-entrepreneurs around the world.
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