social entrepreneurshil

Chapter 1

Social EntrepreneurshipDefinition, Distinction between

Entrepreneurship and Social Entrepreneurship

Introduction

• “Only the individuals can think and create new values for society – nay, even set up new moral standards to which the life of community conforms. Without creative, independently thinking and judging personalities, the upward development of society is as unthinkable as the development of individual personality without the nourishing soil of community”

-- Albert Einstein

Introduction• An entrepreneur recognizes- possibilities in the environment, taps the opportunities and marshals resources to satisfy a growing need of

community A social entrepreneur follows the same path but with an

overarching altruistic reason. Social entrepreneurs reinvent the model of forging the

nicely separated realms of business, government, citizen sector by bringing together both financial profit and social benefit.

Introduction

Government aid agencies and private foundations have invested billions of dollars to support social initiatives.“But all too often, the results of these initiatives have been disappointing in terms of both effectiveness and sustainability, let alone their capacity to scale up their impacts into significant social changes” (Cernea, 1987; Tendlar, 1989).

Definition• Social Entrepreneurship is a field of practice that deals with

application of entrepreneurial energy primarily for:

(a)Addressing social and environmental issues at community and/or higher levels and

(b)Causing social and environmental change through non-violent, non coercive methods and generating significant impacts in the target areas and beyond. (This is because in some cases, social change is attempted through application of violent and coercive methods).

(c)Social Entrepreneurship is also a special type of leadership.

Definition- cont • A social entrepreneur is any person, in any sector, who uses earned

income strategies to pursue a social objective.Some researchers (Cook, Dodds, & Mitchell, 2001; Wallace, 1999)

suggest that social enterprises that carry out for profit activity to support other nonprofit activities can be viewed as social entrepreneurs.

Others have argued that for-profits that may take some innovative action towards building social capital can be considered as being socially entrepreneurial (Canadian Centre for Social Entrepreneurship (CCSE), 2001; Thompson, Alvy, & Lees, 2000).

Thompson (2002) identifies social entrepreneurship as possibly occurring in profit seeking businesses that have some commitment to doing good. They are set up for a social purpose but operating as businesses and in the voluntary or nonprofit sector.

Definition- cont

• On the funding side, social entrepreneurs look for innovative ways to assure that their ventures will have access to resources as long as they are creating social value.

Scope of SEP

• Social Entrepreneurship is one of the most hopeful and helpful trends around. These folks aren't famous, but they are showing that what it really takes to change the world isn't so much wealth or power as creativity, determination and passion. - Nicholas Kristof, The New York Times

Scope of SEP- cont

• Social entrepreneurship is gradually increasing and attracting remarkable attention from managers, leaders and many progressive sectors.

• The term itself gained lime-light in the media, and has become the strategy of several prominent social sector organizations.

• Social entrepreneurship may be expressed in a vast array of economic, educational, research, welfare, social and spiritual activities engaged in by various organizations (Leadbeater, 1997).

Scope of SEP- cont

• Social entrepreneurship is a partial solution to the need for radical welfare reform and a way to meet social and other demands through social innovations led by enterprising people (Leadbeater, 1997; Thompson, 2002)

Methods of SEP vis-à-vis traditional EP

• Traditional entrepreneurs frequently act in a socially responsible manner:

They donate money to nonprofit operations; they refuse to engage in certain types of businesses; they use environmentally safe materials and practices; they treat their employees with dignity and respect. All of this is admirable, but their efforts are only

indirectly attached to social problems.

SEP vis-à-vis traditional EP- cont• Social entrepreneurs are different because their earned income strategies are tied directly to their

mission. they either employ people who are developmentally

disabled, chronically mentally ill, physically challenged, poverty stricken or otherwise disadvantaged; or

they sell mission-driven products and services that have a direct impact on a specific social problem (e.g., working with potential dropouts to keep them in school, manufacturing assistive devices for people with physical disabilities, providing home care services that help elderly people stay out of nursing homes, etc)

SEP vis-à-vis traditional EP- cont

• Traditional entrepreneurs are ultimately measured by financial results. The success or failure of their companies is determined by their ability to generate profits for their owners.

• Social entrepreneurs are driven by a double bottom line, a virtual blend of financial and social returns. Profitability is still a goal, but it is not the only goal, and profits are re-invested in the mission rather than being distributed to shareholders.


• SEP focuses on raising public awareness of an issue of general public concern and it is absent in traditional entrepreneurship

• “The most powerful source in the world is the big idea, but only if it is in the hands of a good entrepreneur. This can move the world” -Bill Drayton


• Social entrepreneurs concentrate on marginalized sectors of society. They seek financial sustainability as a means of attaining objectives such as improving the quality of life of their stakeholders and their living environments. Traditional entrepreneurs may or may not concentrate on marginalized sectors of society.


• “Social entrepreneurs" are nonprofit executives who pay increasing attention to market forces without losing sight of their underlying missions, to somehow balance moral imperatives and the profit motives -- and that balancing act is the heart and soul of Social Entrepreneurship.

Perspective of Social Entrepreneurship

Social entrepreneurship can be pursued from several perspectives-•Mitigation of human suffering (social and environmental relief and rehabilitation)•Human rights, social justice, gender and equity perspective, and empowerment of people•Reduction in violence stemming from social factors•Social capital, civic participation in development and governance, and inclusive forms of community development•Natural resource management and sustainable development•Social movements & poverty alleviation initiatives

The7 key tasks for Social Entrepreneurs

1. Successful social entrepreneurship initiatives should take at least three forms-

a. including building local capacities to solve problems, b. providing packages needed to solve common problems, and c. building local movements to deal with other powerful actors.

2. They should use innovations that mobilize exciting assets of marginalised groups or people.

3. They should emphasize systematic learning by individuals and by the organisation (if the organisation operates on a large scale)

4. They should be founded by leaders themselves with the capacity to work with and build bridges among very diverse stakeholders.

5. Social entrepreneurship should expand their impacts by either, investing in organisation and management systems to support organisational growth to expand their coverage

The7 key tasks for Social Entrepreneurs

6. Scaling-up, Capacity building in the society for self help and packaged need dissemination should be the focus area of social entrepreneurship.7. Social transformation leverage and impacts should vary across in different innovation in the society.(Source: reproduced from the journal of Sarah, Brown and Letts, 2004)

Critical Success factors• Candour/Honesty/Awareness/Vision • Passion • Clarity of purpose • Commitment • Courage • Core values • Customer focus • A willingness to plan • Think like a business at all times • Find a niche: • Be a player or don’t play at all• Price your products and services aggressively • Stick to your knitting• Build the right team• Be patient

Potential pitfalls

• Concerns about the concept of making money- is making money ethical?

• Taxing already scarce resources- are we exploiting some for the benefit of others?

• The fear of failure- how to recover the investments if we fail?

• What happens if we are successful?- can we keep the focus intact even after success?

Social entrepreneurs- Indian Context

• Vinoba Bhave (India): Founder and leader of the Land Gift Movement, he caused the redistribution of more than 7,000,000 acres of land to aid India's untouchables and landless.

Social entrepreneurs- Indian Context- cont

• Dr. Govindappa Venkataswamy (Dr. V) & David Green: Aravind Eye Care System, started in 1976- is the largest and most productive eye care facility in the world. It mission is to make medical technology and health care services accessible, affordable and financially self-sustaining. Aravind offers comprehensive eye care in the most systematic way attracting across the world.


• Vikram Akula: SKS believes that access to basic financial services can significantly increase economic opportunities for poor families and in turn help improve their lives. It mission is to empower the poor to become self-reliant through affordable loans Since inception, SKS has delivered a full portfolio of micro finance to the poor in India.


• Dr. Verghese Kurien: Amul was created by government initiative and by the passion of people like Dr Kurien. The vision was big, there was passion, there was capital (direct and indirect), there was terrific leadership, sustained and involved engagement with the grass-roots, and the formation of partnerships to create the impact via the business.

Some famous Examples of Leading Social Entrepreneurs

John DuRand began working in the mid-1960s with seven people who were mentally retarded. By the time he retired during the winter of 1997, Minnesota Diversified Industries had become a $57 million not-for-profit business employing more than 1,000 people. •Since 1964, Minnesota Diversified Industries (MDI) has been serving people with disabilities by offering progressive development and employment opportunities in competitive business enterprises. Real jobs that create a sense of pride, value and independence in our workers’ lives.•To support this mission, MDI provides solutions for business customers. From corrugated plastic products to project-specific services, MDI is your answer.


Margaret Cossette started in the mid-1970s with six part-time employees and a $16,000 grant. Today, Missouri Home Care is a $10 million for-profit business providing non-medical care to more than 2,500 elderly people in 39 rural counties.

Dr. Mimi Silbert helped start Delancey Street Foundation with $1,000 from a loan shark in the early 1970s. Today the Foundation operates nine profitable small businesses, employs only former convicts and drug addicts, and has returned more than 10,000 people to the mainstream.

Contd.Muhammad Yunus: Grameen Bank (GB) has reversed conventional banking practice by removing the need for collateral and created a banking system based on mutual trust, accountability, participation and creativity. GB provides credit to the poorest of the poor in rural Bangladesh, without any collateral. At GB, credit is a cost effective weapon to fight poverty and it serves as a catalyst in the over all development of socio-economic conditions of the poor who have been kept outside the banking orbit on the ground that they are poor and hence not bankable.


Dr. Maria Montessori (Italy) : Developed the Montessori approach to early childhood education. Florence Nightingale (U.K.) : Founder of modern nursing, she established the first school for nurses and fought to improve hospital conditions.

Margaret Sanger (U.S.) : Founder of the Planned Parenthood Federation of America, she led the movement for family planning efforts around the world.

John Muir (U.S.) : Naturalist and conservationist, he established the National Park System and helped found The Sierra Club.

Social Entrepreneurs: A Catalyst for Social Change

•"Many of the problems of our modern world, ranging from disease to drugs to crime to terrorism, derive from the inequalities between the rich and the poor . . . be they rich nation versus poor nation or rich community versus poor community. It is in the best interests of the well-off to help empower those who are not as well-off to improve their lives." —Jeff Skoll

Social Entrepreneurs: A Catalyst for Social Change

A new approach has arisen to solve the world's toughest, inescapable social issues by combining business tools, techniques and models to alleviate poverty, hunger, ignorance, and environmental degradation.

.Social entrepreneurship works as a catalyst for social transformation. From this perspective, social entrepreneurship can produce small changes in the short term that reverberate through existing systems to catalyze large changes in the longer term (Ashoka Innovators, 2000).

Concluding Words•Social entrepreneurship provides practical solutions to problems pertaining to the society by combining resource, ideas and innovations that may be any of the new processes, services and products. There can be diverse focus on the social issues such as enterprise development, health, education, environment, labor conditions or human rights.•Neither present societal set up, nor government, nor NGOs, nor traditional socialism is capable enough to eradicate social issues without bringing change in individual mindset. This mindset is important in this regard. Motivation of people to invest their own vision and also their ability to transform that vision into reality are the critical ‘success mantra’ for successful entrepreneurs.•Rather than making a more conservative secured investment in an existing profitable program with guaranteed outcomes, willingness to take risk by investing money, time and effort on their philanthropic innovative ideas are vital for bringing some radical, relevant and meaningful change in society.

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