Benefits and Drawbacks of Social Business

On October 20, 2011, the Russian Social Business Forum was held at the Ministry of Economic Development of the Russian Federation. The Forum was organized by the Russian Microfinance Center and the Grameen Creative Lab (Germany).  As part of the Forum agenda, Boris Tkachenko, Head of the Russia Branch of IBLF, together with Elena Feoktistova, Director of the Centre for Corporate Social Responsibility and Non-Financial Reporting of the Russian Union of Industrialists and Entrepreneurs (RSPP), conducted the session “Social business deals with the issues of social investment effectiveness in the framework of corporate social responsibility (CSR) programmes”; the objective of the session was to attract entrepreneurs’ attention to social business. The session was attended by the representatives of major businesses, NGO and entrepreneurs. Representatives of Grameen Bank, Citibank, Social Information Agency and Russian Microfinance Centre presented their reports. All reports described numerous successful cases in social business and social entrepreneurship. The discussion was mainly about benefits and drawbacks of social business and possibilities of support for projects in the framework of CSR programmes. As key benefits, the participants stressed the sustainability of this model and repayment on investments in successful business for a social investor, opportunity to involve occupied population and skills upgrade, and creating new working places for unemployed. The drawbacks of social business: problems with raising initial capital, lack of business skills and “substitution of concepts”. Generally, the concept of “social business” is still unclear and is interpreted in different ways, also, many do not see the difference from corporate social responsibility of business. Besides, it became clear during the discussion that it was necessary to arrange the next event to review the terms of CSR and social business in more detail, as well as basic differences between the two concepts. Russian Microfinance Centre, RSPP and IBLF shall discuss the possibility to arrange such an event shortly.