Integritty exists to help feed those in need; it is our central and overwhelming purpose. We regard ourselves as a social business.
Our mission is to feed all those in need and end poverty. Our business model is inspired by Nobel Peace Prize winner Mohammad Yunus, whose social businesses including Grameen Bank have transformed the lives of millions across the world. However, in his book Building Social Business, he defines a social business as a “non-loss, non-dividend company devoted to solving a social problem which reinvests all profits into the business”. By these definitions, Integritty is not a social business.
Yunus names 7 key characteristics for a company to be classed as a social business. These include:
The business objective is to overcome poverty, or one or more problems (education, health, technology access, and environment) that threaten people and society – not to maximise profit.
Muhammad Yunus
Our business objective is absolutely to overcome poverty — and improve the health of people in need across the UK. This is more important to us than profit.
Investors get back only their investment amount. No dividend is given beyond the return of the original investment.
Muhammad Yunus
This is where our philosophy diverges.
Though our first priority is helping those in need, we also aim to stay in business long term and make profit.
Yunus himself in Building Social Business admits this may be a more effective way of creating positive social change, stating “some may argue that a profit-maximisation organisation can more successfully fight poverty. The prospect of making a profit might allow them to attract more capital, to expand their model faster, and hence touch more lives, more quickly.”
We prioritise helping those in need over profit maximisation, and profit will never come between us and completing our social commitments. Though, by this definition, Integritty is not a social business.
Why does Integritty Foods not agree to be a non-loss, non-dividend social business?
1. It requires a level of financial privilege few have
Everyone has costs of living, and very few have passive income streams that cover these costs. Very few can therefore work for no returns, not now or in the future.
Philanthropy through social business should not be reserved for the rich. Anyone should be able to start any form of organisation they want to enrich the lives of others — and it should still be able to call itself a social business if it happens to also make money.
In addition, the founder takes on all the financial risk if the business fails. It is unreasonable to rule a company helping society’s most vulnerable that also pays the rent of the owner cannot be a social business.
To denounce any business that can offer investors a return or makes a profit, you place social business out of reach of 99.9% of people; many of whom want to do good.
2. For-profit social businesses can grow and scale quicker, and do more good for the world if allowed to scale
Operating with the potential for positive investment returns encourages investment, allowing for faster growth, economies of scale, and the ability to affect more lives.
A hypothetical: Integritty Foods receives funding by investors who want to make money from this investment, and this allows the company to expand faster, cut unit costs by gaining scale, and be stocked nationwide. These increased sales numbers means Integritty can give more meals away to food banks, soup kitchens and more — helping fulfill Integritty Foods’ social goal faster.
3. It is naive to assume that everyday people will happily invest their money with no returns into a project
Governments often invest into projects that offer standard of living or quality of life increases, and it usually falls to them because the free market is unwilling if it isn’t profitable.
Some billionaire philanthropists also donate towards these causes, but again you’re restricting social capital to the top few richest people.
Many everyday people would love to invest in ethical, eco-friendly or social business — and some do — but they still require a return. There’s nothing selfish in wanting a return either — they need to safeguard their futures and save for retirement. Profit shouldn’t be a dirty word in social business.
There needs to be encouragement and motivation for people to invest in funds that support socially-focused businesses, and this requires the possibility of positive returns.
Being realistic: beyond the pure social business hypothetical
People are not lining up to donate their hard-earned money to a company that helps others without any possibility of returns. More and more people are living paycheck to paycheck, with little savings; and the savings they do have, they need returns on — invested in stock markets and pensions. A quarter of Brits have less than £100 savings — do you want to permanently rule out 25% of the potential social business talent pool instantly?
They would surely love to invest in funds that support social business; but they also need returns. Creating a middle-ground through a scalable, for-profit social enterprise solves these issues. It also rewards people who invest in the early stages of a social business, and encourages large funds to become more ethic-inclined.
4. Social business needs a Mockingjay
There are numerous capitalist figureheads acting as inspiration for the next generation of would-be entrepreneurs: Jeff Bezos, Bill Gates, Warren Buffett et al. They all started strictly for-profit companies — setting aside separate philanthropic activity. Many young entrepreneurs seeing these success stories could therefore be forgiven for not realising that you can become wealthy while helping people with social business.
A “capitalist figurehead” who made their money with a social business would offer an alternative path of entrepreneurship. It would be proof it is possible, and encourage and inspire others to start their own, chasing after social goals rather than purely monetary ones. A Mockingjay to prove it can be done. As soon as the four-minute mile was broken once, hundreds of others achieved it.
Profit shouldn’t be seen as a bad word — within boundaries and the ethics by which it was obtained — and if you make a good living while enriching the lives of the most vulnerable, congratulations.
Therefore, we class ourselves as a social business despite failing to qualify by the previously quoted definition. Our mission, in our war against poverty, is to make sure nobody goes hungry, whatever their situation. We believe that we are best placed to achieve this by being able to take on investment if required, and if you are interested in becoming involved with our project, feel free to get in contact.
