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The Why & How of Sport & Social Business

Marrying the problem-solving power of sport with a financially sustainable social mission

Social business has been solving social challenges across diverse industries for nearly 40 years. Today, the global sports industry is larger than ever, as is consumer demand for social good. Bringing the two together is where Yunus Sports Hub steps in.

In case the concepts of either social business or the power of sports is new, it helps to touch on both. An introduction to either wouldn’t be complete without first identifying who Professor Yunus is — the man behind the sport & social business problem-solving duo.

1 — Who is Professor Yunus
Professor Muhammad Yunus is a Nobel Peace Laureate, Bangladeshi economist, and founder of the Grameen Bank (the world’s first dedicated microcredit institution for the poor), and the father of social entrepreneurship.

A former Fulbright scholar and university professor in the United States, Professor Yunus returned to Bangladesh in the late 1960s to help establish his newly independent country (after liberation from Pakistan). While serving as Director of the Department of Economics at the University of Chittagong, a mass famine hit Bangladesh. In 1972, he took an unprecedented step to help those suffering most: the poorest of the poor. He was troubled by the extreme disconnect between the traditional economic theories being taught to his students and the reality of mass poverty right outside the university’s doors. Professor Yunus chose to challenge the convention of education at the time and engaged his students in experimenting with practical ways of helping the poor. In 1976, he began his first steps in establishing microcredit (a form of social business), granting small loans from his own pocket to empower the poorest neighboring villagers as entrepreneurs, starting with 27$.

The microlending and unique system of support provided to borrowers worked. It helped pull people out of extreme poverty and the endless cycle with loan sharks. The model was brought to village-after-village throughout Bangladesh, with the same positive results, leading Professor Yunus to officially create the Grameen Bank (literally translated, the “village” bank, owned by and for villagers) in 1983. The bank and its microcredit approach have since been replicated around the world, lending to tens of millions of borrowers, with a 99% return rate. In 2006, Professor Yunus and the Grameen Bank were jointly awarded the Nobel Peace Prize for their fight against poverty. Professor Yunus has received more than 140 prestigious awards in 36 countries and is one of only seven people in history to have received the Nobel Peace Prize, the Presidential Medal of Freedom (United States), and the Congressional Medal of Honor (United States).

2 — What is Social Business
Microcredit, as developed by Prof Yunus, is a banking model to solve the problem of no access to credit for the poorest. The Grameen Bank, therefore, is a business that solves a problem. This business-meets-social-solution led Profesor Yunus to extend the concept, formalizing a definition of “social business”: a business that solves a social problem. After creating more than fifty social businesses in Bangladesh (many of which operate on a national-scale and tackle several diverse social challenges) Professor Yunus brought the model to other countries, initiating a worldwide movement where businesses solve problems. It is straightforward and outlined in seven principles:

  1. Society must aim to eradicate poverty or solve social problems in the areas of health, education, access to technology or the environment. Its objective cannot be profit maximization;
  2. The corporation must ensure its financial and economic viability;
  3. Investors can only recover the amount of their investments. No dividend will be distributed to them beyond this amount;
  4. When the amounts invested are recovered by the investors, the remaining profits are reinvested in the company so that it can improve and grow;
  5. Society must respect the environment and promote gender equality;
  6. Employees must obtain market wages and good working conditions;
  7. The whole thing must be accomplished with joy.

Essentially, social business is a business just like any other in that it provides a product or service in exchange for payment, but the primary mission of the business is to solve a human or environmental challenge. A conventional business sells goods with a primary mission of maximizing profits for the highest possible shareholder dividends. By contrast, a social business generates profits so that they can go back into the business and continue funding solutions.

“A social business is a non-dividend company to solve human problems” — Prof Yunus

3 — Sport & Social Business
Professor Yunus’s work shows us that social business is sector agnostic — it can apply to any industry: nutritional products, telecom, healthcare, banking, agriculture, water distribution… you name it, there are social business solutions for it. Within certain fields, it has an especially potent ability to ignite change. The sports sector is one of these.

As Professor Yunus asserts, “sport is powerful because it is basic to human beings”. Its emotional power draws on basic and fundamental human experiences of sharing a common language, solidarity, and fellowship. That power entertains and pulls people in.

In his opening speech at the 129th Session of the International Olympic Committee at the Rio 2016 Olympic and Paralympic Games, Professor Yunus highlighted how social business could be used as a game-changing tool to unleash the sport sector’s potential for large-scale social transformation

  • The idea: Taking any opportunity to solve social or environmental problems, in and through sport. Three critical opportunities come from bringing social business to the sports sector:
  • Solving social and environmental problems that are inherent to sport
    Solving social and environmental problems by leveraging the power of sport
    Helping those who already use sport to solve problems (NGOs in the sport for development sector) to transition to self-sustainable business models

4 — Our role as Yunus Sports Hub: Implementing Social Business in and through sport
Our mission stems from infusing Professor Yunus’s problem-solving spirit into the wide world of sports.

Solving problems in the sports sector
As with any industry, there are certainly social challenges that need to be tackled within the sports world, ones that directly play into the challenges that the UNSDGs aim to address.

Examples of these include gender inequality amongst players, coaches, officiants, and managerial positions, as well as the pay for each of these roles; racism, mental health, exorbitant salary gaps, and sector sustainability.

Financial hardship amongst athletes is one such challenge to which we give attention. Frequently the media portrays athletes as wealthy celebrities, which is inaccurate for the majority of athletes. In both pro and semi-pro positions, developing and developed countries alike, athletes are often unsalaried, other than with mainstream sports like soccer or football. Dedicating their lives to competitive training, athletes also often end up forgoing some of their education, making it difficult to find employment both during their career and upon retirement from competing.

“Whenever I discover a problem, I create a business to solve it” — Professor Yunus

Fortunately, some organizations take a stand. A fantastic example of an organization creating a solution is the IOC’s Athlete 365 Business Accelerator. An initiative launched by the IOC in 2019, the Business Accelerator empowers athletes globally to become entrepreneurs as a way of financing their career and aiding in career transition. Entrepreneurship allows flexibility and freedom with training schedules. Moreover, athletes possess qualities that are integral to successful entrepreneurs; such as stamina, commitment, and drive. Social business and encouraging people to heed Professor Yunus’s advice — to “be a job creator, not a job-seeker”, — are a solution both long and short term for the poverty problem. For other challenges in the sector as well, Professor Yunus’s approach can help solve problems in a financially sustainable manner.

Solving problems by leveraging the social power of sports

“I always felt amazed at the limitless power of sport. It is powerful because it is basic to human nature. Where there is power there is always a chance to make a meaningful difference in people’s lives” — Professor Yunus

While it’s impossible to put a price on the power of sport, we cannot understate:

The social powers of sport are unending, as are the solutions that can be built by leveraging those powers. Such solutions are already in motion and sustaining themselves in various parts of the world, through different sports disciplines.

Take the fabulous example of the Paris 2024 Games. The development and delivery of the ESS 2024 platform is a case study in using the economic power of the industry to serve those in greatest need. The 7 billion euro budget allocated to deliver the 2024 summer games could be used in a traditional manner, which would generally make large corporate service providers wealthier. Alternatively, small and medium enterprises in the social economy sector could receive support to participate. This would allow small businesses who have a social mission to benefit from the 7 billion euro budget as well as advance local solutions, such as providing employment to disadvantaged youth or only using locally sourced products. This is precisely what the ESS2024 platform aims to accomplish, working since 2016 and in the lead-up to the 2024 summer games to help SMEs and social businesses respond to tenders.

Helping the Sport for Development Sector transition to Social Business
For social business to work, it requires a mindset committed to solving social problems. This is great news, as Sport for Development (SfD)organizations already operate with this mindset, meaning that they can more readily take on a social business model to help sustain their activities.

The SfD sector is already full of fantastic problem solvers — organizations composed of people who use sport to help solve local issues, such as peace-building after tribal conflicts, neighborhood desegregation, access to education, child safety, and protection, the inclusion of displaced peoples, and skill development. They are well-connected, deeply rooted in the communities in which they operate, and have strong relationships with their beneficiaries (helping to better understand challenges they face).

To advance their incredible work, a significant step is to improve the traditional SfD financing model. Most SfD organizations are nonprofits, relying on donations and fundraising to operate, which causes a few issues:

  • Reliance on yearly grants and donations makes it difficult to plan long-term programs (which are needed to create sustained change in communities).
  • Allocating limited budgets that go toward more fundraising and impact measurements (you might note the troublesome irony here: fundraising just to pay the fundraiser).
  • Mission drift, as many financial contributions come with specific requirements for their use, which are often tied to specific agendas from funders (meaning a lot of funding cannot go where those on the ground in the organization know that it would be best suited).

This is where Profesor Yunus’s expression “a charity dollar has one lifetime, a social business dollar has endless lifetimes” comes into effect. Through social business, the work of such nonprofit ventures can be more independent, sustained, and operate as a regular business would, but with profits going back into the business.

Any organization that uses SfD can create their own revenue streams and become a social business. Every week on our Yunus Sports Hub media we showcase sport & social business entrepreneurs who drive change in a financially self-sustainable way. We also have a community dedicated to offering information, support, and opportunities to individuals who want to advance solutions through sport and social business (you can get involved here).

Coming full circle
The sports sector, at present, stays largely in black and white, on two ends of the spectrum: the mega-revenue, business and entertainment-focused sports industry on one end, and grassroots sport for development efforts on another. Social business can be a tool to create a strong middle way that allows more financial independence for the grass-roots, better social outcomes from mega-sports, and more potential to redesign a system that creates problematic binaries.

As an aspiring entrepreneur, a sports organization employee, a funder, or event organizer, you have the power to leverage social business and solve problems. That’s what we’re here to help you do, wherever you are if you want to solve problems sustainable & leverage sports to do so. Take that step; we’ll work with you to use sport & social business to create a solution.

We believe you can make a difference!