By Bianca Bartz, Editor in Chief of SocialBusiness.org

When I tell people I write about social business, most people ask “what’s that?”

A few know I write about businesses striving to make profit to further a social cause, but a good chunk think that I write about businesses that use social media. Although they’re wrong about what we do, it’s a fair assumption. Here’s why:

Particularly in the last year, the term “social business” has been widely used to describe businesses that regularly integrate social media into their business practices. Makes sense.

But prior to that, most online references to “social business” were connected to the ideas of Nobel Peace Prize winner Muhammad Yunus. The “Banker to the Poor,” as he’s often referred to, started Grameen Bank, which began offering micro loans in India in the early 80s. Today versions of the model are found in 100+ countries, all geared at helping entrepreneurs launch businesses so they can lift themselves out of poverty and stimulate their economies.

Professor Yunus helped bring the term “social business” into popularity after publishing the book Creating a World Without Poverty: Social Business and the Future Of Capitalism in 2007. In a June 2010 Forbes interview, he defined it as such:

I define social business as a non-loss, non-dividend company dedicated entirely to achieve a social goal. All profits, or “surplus revenue,” is ploughed back into the venture for expansion and improvement. In social business, the investor gets his or her investment money back over time, but never receives dividend beyond that amount.

Our definition is similar. (You can read it here.) Like Yunus, we love the idea that, unlike charities that have to work with low overheads, have little budget for innovation and expansion and that rely completely on fundraising, social businesses are self-sustaining and have the opportunity to grow exponentially.

As Yunus said to Forbes, “A charity dollar has one life; a social business dollar has endless lives!” 

Social Business: Social Media vs Social Enterprise

But back to the confusion. Last fall we noticed the term “social business” gain traction online, particularly on Twitter, and soon after in blog posts. Unfortunately, it wasn’t because more people were talking about using business for good. It was around the time IBM came out with a big social business campaign focused on making businesses more social online with their customers. Then we read about the Social Business Forum, based on the same concept. Shortly after, Fast Company wrote an article based on IBM’s initiative, and interviewed Ethan McCarty, IBM’s Senior Manager of Digital and Social Strategy. Here’s how Ethan defined social business:

Social media is about media and people, which is one dimension of the overall world of business. With social business you start to look at the way people are interacting in digital experiences and apply the insights derived to a wide variety of different business processes.

Others started adopting the term faster than we could track, and we were suddenly unable to monitor online references to “our” version of social business anymore. Dang. Frustrated that the term was being diluted and losing context, and passionate about clarifying the difference, our community manager, Tia, pitched Fast Company on an article detailing the growing confusion. Unfortunately, we still haven’t heard back. That’s OK though. We’re defining it now.

Social Business: How it’s Perceived Online

Not to get too nerdy, but I wanted to show you an example of how search terms — and, accordingly, online perception — pertaining to “social business” have switched largely from references to Yunus’ type of social business to IBM’s. I took screenshots from the top news results in the US for “social business” in 2011, and the same for “social business” in 2008.

In 2011, only the last result pertained to social enterprise, the result were social media focused.

In 2008, there were few results, but all were about social enterprise.

At the end of the day, I love both types of social business and work in both industries. In fact, we’ve merged them at SocialBusiness.org, using our Facebook, Twitter, LinkedIn, Google+ and even Pinterest to help promote purpose-focused businesses. I just wanted to clarify the difference 🙂