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Social entrepreneurship is the process of pursuing innovative solutions to social problems. More specifically, social entrepreneurs adopt a mission to create and sustain social value. They draw upon appropriate thinking in both the business and nonprofit worlds and operate in a variety of organizations: large and small; new and old; religious and secular; nonprofit, for-profit, and hybrid.
Business entrepreneurs typically measure performance in profit and return, but social entrepreneurs also take into account a positive return to society. Social entrepreneurship typically furthers broad social, cultural, and environmental goals and is commonly associated with the voluntary and not-for-profit sectors. Profit can at times also be a consideration for certain companies or other social enterprises.
Social entrepreneurship practiced in a world or international context is called international social entrepreneurship.
There are continuing arguments over precisely who counts as a social entrepreneur. Thus far, there has been no consensus on the definition of social entrepreneurship, so many different sorts of fields and disciplines are associated with social entrepreneurship. Philanthropists, social activists, environmentalists, and other socially-oriented practitioners are referred to as social entrepreneurs. For a clearer definition of what social entrepreneurship entails, it is necessary to set the function of social entrepreneurship apart from other socially oriented activities and identify the boundaries within which social entrepreneurs operate. Some have advocated restricting the term to founders of organizations that primarily rely on earned income – meaning income earned directly from paying consumers. Others have extended this to include contracted work for public authorities, while still others include grants and donations.
Social entrepreneurship in modern society offers an altruistic form of entrepreneurship that focuses on the benefits that society may reap. Simply put, entrepreneurship becomes a social endeavor when it transforms social capital in a way that effects society positively. It is viewed as advantageous because the success of social entrepreneurship depends on many factors related to social impact that traditional corporate businesses do not prioritize. Social entrepreneurs recognize immediate social problems, but also seek to understand the broader context of an issue that crosses disciplines, fields, and theories. Gaining a larger understanding of how an issue relates to society allows social entrepreneurs to develop innovative solutions and mobilize available resources to impact the greater global society. Unlike traditional corporate businesses, social entrepreneurship ventures focus on maximizing gains in social satisfaction, rather than maximizing profit gains. Both private and public agencies worldwide have had billion-dollar initiatives to empower deprived communities and individuals. Such support from organizations in society, such as government-aid agencies or private firms, can catalyze innovative ideas to reach a larger audience.
Prominent innovators associated with the term include Pakistani Akhter Hameed Khan and Bangladeshi Muhammad Yunus. Yunus was the founder of Grameen Bank which pioneered the concept of microcredit for supporting innovators in multiple developing countries in Asia, Africa and Latin America. He received a Nobel Peace Prize for his efforts, and also inspired programs such as the Infolady Social Entrepreneurship Programme. Others, such as Stephen Goldsmith, former Indianapolis mayor, focused social efforts on a more local level, engaging the private sector in providing many city services.
Social entrepreneurship is distinct from the concept of entrepreneurship itself, yet still shares several similarities with the classic concept. Jean-Baptiste Say, a French economist, defined an entrepreneur as a person who “undertakes” an idea and shifts perspectives in a way that it alters the effect that an idea has on society. However, the difference between “entrepreneurship” and “social entrepreneurship” stems from the purpose of a creation. Social entrepreneurs seek to transform societies at large, rather than transforming their profit margin like classic entrepreneurs typically seek to do.
The concept of “social entrepreneurship” is not a novel idea, but it has recently become more popular among society and academic research, notably after the publication of “The Rise of the Social Entrepreneur” by Charles Leadbeater. Many activities related to community development and higher social purpose fall within the modern definition of social entrepreneurship. Despite the established definition nowadays, social entrepreneurship is a difficult concept to define, since it can be manifested in multiple forms. A broad definition of the concept allows interdisciplinary research efforts to further understand and constantly challenge the notion behind social entrepreneurship. No matter which sector of society certain organizations are in (i.e. corporations or unincorporated associations and societies), social entrepreneurship focuses on the social impact that an endeavor carries. Whether social entrepreneurship is altruistic or not is less important than the effect it has on society.
The terms social entrepreneur and social entrepreneurship were used first in the literature on social change in the 1960s and 1970s. The terms came into widespread use in the 1980s and 1990s, promoted by Bill Drayton the founder of Ashoka: Innovators for the Public, and others such as Charles Leadbeater. From the 1950s to the 1990s Michael Young was a leading promoter of social entrepreneurship and in the 1980s was described by Professor Daniel Bell at Harvard as 'the world's most successful entrepreneur of social enterprises' because of his role in creating more than sixty new organizations worldwide, including the School for Social Entrepreneurs (SSE) which exists in the UK, Australia and Canada and which supports individuals to realize their potential and to establish, scale and sustain, social enterprises and social businesses. Another notable British social entrepreneur is Andrew Mawson OBE, who was given a peerage in 2007 because of his regeneration work including the Bromley by Bow Centre in East London.
Although the terms are relatively new, social entrepreneurs and social entrepreneurship can be found throughout history. A list of a few noteworthy people whose work exemplifies the modern definition of "social entrepreneurship" includes Florence Nightingale, founder of the first nursing school and developer of modern nursing practices; Robert Owen, founder of the cooperative movement; and Vinoba Bhave, founder of India's Land Gift Movement. During the nineteenth and twentieth centuries some of the most successful social entrepreneurs effectively straddled the civic, governmental, and business worlds. Such pioneers promoted ideas that were taken up by mainstream public services in welfare, schools, and health care.
Groups focused on social entrepreneurship can be divided into several categories: community-based enterprises, socially responsible enterprises, social services industry professionals, and socio-economic enterprises. Community-based enterprises are based on the social ventures of an entire community that uses its culture and capital to empower itself as an entire enterprise. Socially responsible enterprises focus on being creating sustainable development through its initiatives that focus mostly on societal gains. Social service industry professionals work specifically in the sector of social services to expand social capitol for different individuals, communities, and organizations. Socio-economic enterprises include corporations that balance earning profits and non-profit social change for communities. In fact, there are even organizations dedicated to empowering social entrepreneurs, connecting them with mentors, strengthening their enterprise models, and preparing them for capital investments. These acceleartors help take social entrepreneurs to global scale, the earliest pioneer accelerator is the Global Social Benefit Institute (GSBI®).
One well-known contemporary social entrepreneur is Muhammad Yunus, founder and manager of Grameen Bank and its growing family of social venture businesses. He is known as the “father of microcredit,” and established the microfinance revolution in helping millions of people in global rural communities access small loans. For his work, he was awarded a Nobel Peace Prize in 2006. The work that Yunus did through Grameen Bank echoes a theme among modern day social entrepreneurs that emphasizes the enormous synergies and benefits that arise when business principles are unified with social ventures. Larger countries in Europe and South America have tended to work more closely with public organizations at both the national and local level.
The George Foundation's Women's Empowerment program empowers women by providing education, cooperative farming, vocational training, savings planning, and business development. In 2006 the cooperative farming program, Baldev Farms, was the second largest banana grower in South India with 250 acres (1.0 km2) under cultivation. Profits from the farm are used for improving the economic status of the workers and for running the other charitable activities of the foundation.
Some have created for-profit and for-a-difference organizations. A recent example is Vikram Akula, the McKinsey & Company alumnus who started a microcredit venture, SKS Microfinance, in villages of Indian state of Andhra Pradesh. Although this venture is for profit, it has initiated a sharp social change amongst poor women from villages. For example, a Ramanujan Bose Awardee, Dr. Akash S. Rajpal was the founder of Ekohealth. He serves as an example of a social entrepreneur in healthcare. He has been working in India in the field of healthcare against fee splitting and creating a unique ethical facilitation and aggregation services for healthcare providers and price comparison services for patients and help them reduce health care costs.
At the heart of social entrepreneurship is the innovation of novel social capital to create more community-based agency for obtaining assets in individual lives. Private corporations focused solely on profit and nonprofit organizations (NGOs) that are focused solely on social impact are two extremes in the nuanced spectrum of social entrepreneurship, but other types of social entrepreneurs with different visions for their enterprises exist. This can range from individuals seeking to allow solely for society to profit even at a profit loss, to individuals that focus on simultaneously profiting both themselves and society. In either case, individuals are at risk for personal profit loss. There is a trend in organizations, especially private organizations that combine traditional interest in corporate profit gain with a desire to create social enterprises that have meaningful social impacts that are innovative in society. The complexity of defining the type of social entrepreneurship can also increase when boundaries cross. For example, certain non-profit organizations may have initiatives that generate revenue but only for the purpose of their social enterprise. Additionally, for-profit organizations may be focused primarily on gaining profit, but arrange some of their profits for socially impactful activities.
The GSBI empowers social entrepreneurs by pairing them with Silicon Valley executive mentors to refine their business models and identify growth opportunities. It is one of the pioneer accelerators and social entrepreneur ecosystem builders, dedicated to empowering social enterprises like World Wide Hearing, Komaza, Sankara Eye Care, Kiva, all GSBI alumni.
When we think of hearing loss, we may think of it as a problem that affects only the aging population. However, over 180 million children worldwide are born with hearing loss and have few resources to better their condition .Audra Reyni, Executive Director of World Wide Hearing, explains that, “When children are born with hearing loss, they are born into silence. Hearing can be the difference of having a chance at life, or having missed opportunities.”
World Wide Hearing provides access to affordable, high quality hearing aids for low-income children with hearing loss in developing countries. They do this by training local female entrepreneurs to provide the hearing aids and services. They are currently active in Jordan and are optimistic of where the future can take them. Audra participated in the Global Social Benefit Institute (GSBI) Accelerator program and viewed it as a huge push at a crucial time. GSBI has provided strategic advice at a time when World Wide Hearing has the capability to scale in a big way.
Tevis Howard, a Bay Area native, took a gap year and went to Kenya to do Malaria research. During about a year and a half of living there, he saw quite a bit of poverty and transitioned from science to social entrepreneurship. Tevis had the unique idea of planting trees in order to help dryland farmers out of extreme poverty. This sparked the beginnings of Komaza.
Komaza, a GSBI social enterprise graduate, offers a partnership that motivates farmers to plant trees and short-term crops that, in turn, provide decades of life-changing income. Dryland farmers are the poorest people on earth, and they are struggling to grow crops on bad soil with no rain. East Africa is currently facing a multibillion dollar wood market failure, there are tens of millions of families on dry lands living in extreme poverty.“Deforestation is intrinsically linked with poverty,” Tevis shared. “We’re trying to break that cycle by doing the obvious thing: by planting trees.”
“When someone is in darkness, they aren’t able to move, they aren’t able to do their daily chores, they become dependent.” One-fourth of the world’s blind population is in India and 80% of this blindness is curable. Bharath Balasubramaniam, President of Community Outreach at Sankara Eye Care, explained what Sankara Eye Care is doing to try to end curable blindness.
They have outreach camps and bring eye care services to those in the rural areas. If necessary, they will bring the patients back to their full hospitals and the patients receive everything–surgery, food, room– completely free of charge, and then are taken back into their village. When they are back in their village, Sankara also goes back for post-op care. There is no cutting corners or skimping on quality in order to keep the services free.
Sankara Eye Care’s mission is to eliminate curable blindness across India by scaling to 20 Sankara Community Eye Hospitals, serving over a million rural poor every year. The Global Social Benefit has been able to aid in this mission by providing Silicon Valley executives as mentors for Bharath. His mentors have helped him understand the variable options that are available for funding and identify which opportunities are plausible. Another way the program helped Bharath was distinguishing the differences between marketing and sales. “It was a little confusing for us. We were blending and mixing the two, so now I have better clarity of which is which and what I need to look at once I get back,” He said. The program was very educational and now he has a better idea of what needs to be done in order for his vision to become a reality.
Ashoka is an example of a non-profit organization focused on building social entrepreneurs through its system of social venture capital. Ashoka was founded by Bill Drayton in 1981 in Arlington, VA. Ashoka's motto is "Everyone a Changemaker," and lies at the heart of all of the work the organization. Essentially, Ashoka's primary mission is to simultaneously empower individuals with the capacity to become social innovators and to solve societal problems in such a way that all members of society can have a voice - even previously marginalized populations. With a strong international presence in over 70 countries, the organization seeks to identify entrepreneurs through various iniatives at various ages and stages in life, deeming them "Ashoka Fellows." One of Ashoka's iniatives, the Changemakers program, hosts collaborative competitions that challenges budding entrepreneurs to come up with innovative solutions to global issues. Additionally, Ashoka also operates on a university-level through its Ashoka U initiative, working with university officials and administrators to develop programs that encourage and nurture students that are interested in social entrepreneurship. In targeting various age groups, Ashoka seeks to identify and empower social entrepreneurs to promote positive change in society.
According to Bill Drayton, the individuals “who [possess] the creativity, savvy, and determination to realize their ideas on a large scale” are the social entrepreneurs who will have the most impact in their world  The first Ashoka fellow chosen whom he believed displayed these characteristics was Gloria de Souza, a forty-five-year-old Indian elementary school teacher whose vision brought positive changes to her community and to her country as a whole.
It all began after De Souza attended a conference on experiential education and environmental education. After internalizing what she had learned and realizing the impact this different way of teaching could have on the teachers and children of India, she started to incorporate the techniques she had learned in her own classroom – with stunningly positive results. Enthusiastic over her success, she began sharing her findings with colleagues only to be met with criticism, skepticism, and resistance. Undaunted by the lack of support, de Souza embarked upon what would become a fight to reform India’s education system and help students gain the most out of their learning experience. After being discovered and supported by Ashoka in 1981, de Souza resigned from teaching and founded Paisar Asha, an organization devoted to her cause. Less than ten years later, what started as an idea in one teacher’s head had grown to become the official curriculum for grades 1-3 in India, a system used by almost a million students  Gloria de Souza’s was a maverick whose determination and persistence and dream for change made her a truly successful social entrepreneur.
Brazilian social entrepreneur Fábio Rosa was instrumental in improving Brazilian farmers’ quality of life through rural electrification initiatives. His incredible creativity, unwavering pragmatism, and indefatigable perseverance enabled him to succeed in the face of enormous obstacles.
When Rosa encountered a problem, he insightfully identified and attacked the root cause rather than the symptoms. For example, when he observed the poverty of rural rice farmers in the municipality of Palmares do Sul, he realized that they were forced to buy water at exorbitantly high rates from the landowners who controlled it. According to Rosa, “Without water there was no production. And without production there was no wealth.” Artesian wells were a possibility, but rural farms did not have the electricity necessary to operate the pumps. Undaunted, Rosa developed a system for economically carrying electricity to rural farms by using simple monophase current and cheap components. Access to affordable electricity gave poor, rural farmers access to cheap irrigation as well, dramatically raising their standard of living. Rosa’s pragmatic approach motivated him to not only bring electricity to farmers at reasonable rates, but also to make it a worthwhile investment for them by coupling it with the benefit of inexpensive irrigation.
Later, Rosa sought to provide rural Brazilian farmers with solar energy. To offset the high installation costs, he integrated the electricity generation system with relatively cheap electric fences. Access to cheap fencing empowered farmers to prevent their cattle from overgrazing, thereby increasing their land’s productivity. Again, by combining two seemingly dissimilar yet mutually synergizing products into a single, marketable solution, Fábio Rosa multiplied his ability to positively change the lives of Brazilian farmers. His success must be attributed at least in part to his perceptive ability to take two seemingly unfeasible and unrelated ideas and merge them into a single, viable solution capable of bringing great good to the underserved.
Youth social entrepreneurship is an increasingly common approach to engaging youth voice in solving social problems. Youth organizations and programs promote these efforts through a variety of incentives to young people. Such young entrepreneurs utilize technology, social media, and fellow peers in sparking social movements. Additionally, various organizations have established awards to recognize such young, socially active voices. News sources have started to increasingly recognize youth as social entrepreneurs. Fast Company Magazine annually publishes a list of the twenty-five best social entrepreneurs, which the magazine defines as organizations "using the disciplines of the corporate world to tackle daunting social problems." In 2009, BusinessWeek followed suit, publishing a review of America's twenty-five most promising social entrepreneurs, defined as "enterprising individuals who apply business practices to solving societal problems." Forbes launched their 30 Under 30 Social Entrepreneurs in 2011, recognizing "folks who apply their entrepreneurial chutzpah to a social problem to make the world a better place. They’re creative, do-gooding business people, and they’re getting a lot done."
Youth social entrepreneurship spans across the world and is not particularly limited to a certain country. For example, the Young Social Pioneers program in Australia has developed as a globally active program that invests in the power and promise of Australia's young leaders. The program is an initiative of The Foundation for Young Australians, which strengthens, supports and celebrates the role of young people in creating positive change in their communities. In the United Kingdom The Duke of Edinburgh's International Award has been established with a component for encouraging and recognizing social innovation. Programs in the USA include Ashoka's Youth Venture (which provides educational materials, challenges and grants), Do Something (which provides project ideas, grants and media exposure), and RandomKid (which provides youth with a wide range of free tools and resources to increase their social impact.)
Florence Nightingale exercised the entrepreneurship trait of nursing to help improve the unstable conditions of hospitals during the mid 1800s. Her tasks compiled of planning ahead at what needed to be different and how she was going to attempt to change things for the better, acting upon the ideas she came up with, and finally leaving behind a notebook of ideas and recommendations to help the next generation prevent the same disaster of extremely high death rates from happening again. Not only did she organize fundraisers to raise money for the hospital and arrange more stable living conditions to improve the health of the soldiers in the hospital, but she also removed people who were lapsed at their job and delegated tasks to more capable people, sometimes having to do the work herself. She grew up with the desire to help people or anything that needed a hand. Her love grew when she got older and despite her lack of support from her family she pursued her dream and sacrificed her life for other people and therefore is an epitome of true social entrepreneurship. She wasn’t afraid to do the hard things if she knew it was going to make things better or as Niccolò Machiavelli puts it, “[T]here is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle, than to initiate a new order of things…” Florence Nightingale is quoted as writing “The first thought I can remember, and the last was nursing work.”
As previously stated, social entrepreneurship offers an altruistic form of entrepreneurship that focuses on the benefit to society. Social entrepreneurism seeks to transform societies at large.
Ten-Nine-Eight-Childline is yet another example of a socially entrepreneurial organization. Childline is a 24/7 hotline and emergency response service for children in India. Founded in Bombay, India in 1996, Childline's influence in India has spread and by 2002, it served children in thirty Indian cities. According to founder Jeroo Billimoria, "Childline is not a charity service or a welfare service. It's a rights service." Children living on the streets of India face many hardships, including injuries, abuse, abandonment, assault, tuberculosis, and AIDS. Childline is there to provide immediate help and assistance to those who call. Intercepting thousands of phone calls every year, the organization relies primarily on team members, volunteers and staffers who have experience with street kids - former street kids themselves who were helped by Childline and who have a passion for telling others in the same situations about the help Childline has to offer. Former street kids who are now current team members earn $30–$40 every month. When Billimoria got the idea to start a twenty-four hour hotline, she was working with children in Bombay's shelters and experiencing first hand the struggles they faced. She began giving the children her home phone number and soon started receiving calls on a daily basis. When she began receiving calls in the middle of the night for serious issues, Billimoria saw the need for an emergency service to provide immediate support to children. After establishing Childline, calls came in from concerned adults who had witnessed ill-treatment of children. "It showed us that people often observe abuse, but turn a blind eye because they don't know who to contact and don't want to get involved with the police. I saw that it was necessary to create awareness about the service amongst larger sections of the population," said Jeroo Billimoria about the calls Childline received from adults. To this day, Childline continues to serve the population of India's children and supply them with the help and support they need to live safe and healthy lives.
Organizations such as Ashoka, the Skoll Foundation, the Omidyar Network, the Schwab Foundation for Social Entrepreneurship, Athgo, New Profit Inc., National Social Entrepreneurship Forum,Echoing Green and the Global Social Benefit Institute among others, focus on highlighting these hidden change-makers who are scattered throughout the world and providing various levels of resources to advance their initiatives. Then, they are connected them through the annual Skoll World Forum and Social Edge, the Foundation's online community, and highlights their work through partnerships with the Sundance Institute, Frontline World, NewsHour with Jim Lehrer, and other film and broadcast outlets. Skoll also supports the field of social entrepreneurship, including through Skoll's founding of the Skoll Centre for Social Entrepreneurship at the Said Business School at Oxford University. Social entrepreneurial business in the USA often sell products that donate either a portion or all of their profits to portions of the developing world. For example, NIKA Water Company sells bottled water in the USA and uses 100% of its profits to bring clean water to those in the developing world, and Newman's Own which donates 100% of its profits to support various educational charities.
The Internet and social networking websites have been pivotal resources for the success and collaboration of many social entrepreneurs. In the twenty-first century, the Internet has become especially useful in disseminating information in short amounts of time. In addition to this, the Internet allows for the pooling of design resources using open source principles. These media allow ideas to be heard by broader audiences, help networks and investors to develop globally, and achieve their goals with little or no start-up capital. For example, the rise of open-source appropriate technology as a sustainable development paradigm enables people all over the world to collaborate on solving local problems just as open source software development leverages collaboration.
For example, Blake Mycoskie extensively used the Internet in piloting TOMS Shoes, a company that gives a pair of shoes to a person in need for every pair of shoes purchased. Another example would be the US-based nonprofit Zidisha leverages the recent spread of internet and mobile technologies in developing technologies to provide an eBay-style microlending platform where disadvantaged individuals in developing countries can interact directly with individual "peer-to-peer" lenders worldwide, sourcing small business loans at lower cost than has ever before been possible in most developing countries.
Many initiatives carried out by social entrepreneurs, while innovative, have had problems in being sustainable and effective initiatives that are able to ultimately branch out and reach the larger society as a whole (versus a small community or group of people). Studies over the qualities encompassed in a social entrepreneur have shown that very few individuals possess the talent and skills of entrepreneurs with a primarily socially-motivated outlook. Thus, compromises in social initiatives developed often do not reach large audiences. Since the concept of social entrepreneurship has only been recently popularized, some advocates suggest that there needs to be some standardization of the process in scaling up social endeavors to increase impact across the globe.
A need for policymakers around the globe to further understand social initiatives is useful in increasing sustainability, effectiveness, and efficiency. Involvement and collaboration between private corporations and government agencies allow for increased monetary gain for carrying out initiatives, increased accountability on both ends, and increased connections with communities, individuals, or agencies in need. For example, private organizations or non-profit organizations have tackled unemployment issues in communities in the past.
However, only short-term solutions are presented, or solutions are unable to scale up to a larger degree in order to maximize the number of people affected. Government policies in the financial sector are able to tackle such a large issue; however, the little collaboration that has occurred between the two modes that serve society has stagnated the effectiveness of social entrepreneurship. This stagnation primarily rests in the motives and goals of social enterprises and that of those in policymaking. Those in policymaking naturally tend to be has different priorities than social entrepreneurs, which is where slow growth and expansion of social initiatives occurs.
Since social entrepreneurship has only recently started to gain momentum, current social entrepreneurs are actively encouraging social advocates and activists to step up as innovative social entrepreneurs. Increasing the scope of social entrepreneurship naturally increases the likelihood of an efficient, sustainable, and effective initiative. Increased participation draws more attention, especially from policymakers and privately owned corporations that can help shape social entrepreneurs through policy changes, training programs, and leadership development focused on developing social entrepreneurs.
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