Impact Academy fostering local social enterprises – out to prove Milton Friedman wrong

Normally associated with such pursuits as kayaking, paddle boarding and rock climbing,  Riverlife at Kangaroo Point was the location for a showcase event for Peter Ball’s Impact Academy, an incubator for emerging social enterprises, on Thursday evening. The basic idea of a social enterprise is that it does good and makes money at the same time; it appeals to both the noble and base motives of investors. Also, ideally, it should be scalable. Recent examples include Buffed and Suit of Change. A social enterprise is not necessarily a non-profit. Indeed, some of the businesses pitching for funding at the Riverlife event look like they could make their investors substantial amounts of money if they are successful. For example, I was particularly impressed by the business models presented by:

  • ThankBank, which is hoping to inspire so-called slacktivists into action (see Startup ThankBank wants to incentivise people to donate blood),
  • Drag Drop Give, which helps businesses advertise to those people who truly might be interested in their products, rather than annoying the bulk of internet users, and
  • Getabout, which supplies wheelchair-accessible motor trikes; top marks to Getabout for bringing along a demonstration model to the showcase (photo below).

trikeTime will tell whether the worldwide euphoria over social enterprise and impact investing is justifiable. I recall Milton Friedman’s skepticism about corporate social responsibility, and his intensely logical argument that the only social responsibility of business is to maximise profits (see my post Milton Friedman was right, but that doesn’t excuse a lack of ethics). Ultimately a business has to make money to be sustainable and provide profit and jobs, and I expect many social enterprises will face difficult tradeoffs between making money and doing good.

That said, social and environmental objectives are important to many consumers and investors, and they appear willing to reward those companies that pursue them, even if that means consumers have to pay slightly higher prices or investors have to accept slightly lower returns. For this reason, social enterprises are likely here to stay, and I wish the Impact Academy every success in fostering successful social enterprises into the future.

For those interested in learning more about impact investing, I recommend this book:

The Impact Investor

Disclaimer: It goes without saying that this does not constitute investment advice…

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