We live in a time when people, especially the young, are becoming increasingly conscious about the products and services they consume. According to Deloitte Insights (2018), 86 percent of millennials believe that success for a business is more than just financial.
It means that they are more interested in ventures, businesses, and startups that, instead of simply making money, are also focused on solving problems of people and society. That is where social entrepreneurship comes in. In this article, we will talk about social entrepreneurship, its definition, characteristics, types, and examples.
Let us begin right away.
A social entrepreneur pursues ventures that can potentially solve the problems of a group of people, a community, or a society at large. These individuals seek to bring positive change to society through their projects or business undertakings. Many social entrepreneurs connect such ventures to their life purpose and create a chance to make a difference in the world.
However, there is a distinction between a charitable organization and a social enterprise. Social entrepreneurship is a venture that generates financial capital, but its goal is to solve social and environmental problems with its products or services.
Let us now look at the characteristics of a social entrepreneur.
A social entrepreneur cannot find viable solutions to people’s problems without curiosity. Curiosity helps these people engage with those at the grassroots level and understand what they are going through. Curiosity also helps social entrepreneurs consider different perspectives and come up with novel, applicable, and sustainable solutions.
Resourcefulness is the trait of making the best use of potential and resources available to you, and it is a necessary trait for social entrepreneurs. Why? It is hard to find financial and human capital willing to be a part of your cause in a world driven by profits, competition, and corporate culture. As a result, a social entrepreneur must possess the resourcefulness to make the best use of the potential available to him.
It is one thing to idealize a perfect social enterprise that meets your vision, but it is another to make that a reality. Pragmatism allows a social entrepreneur to understand that vision takes time, effort, successes, failures, and experimentation to manifest. They know that by being pragmatic, they can achieve the desired results by moving one step at a time.
For a social entrepreneur, always sticking to old methods and strategies might not be the best way to achieve success. In the earlier phases, many new problems appear that require new ways of thinking. A social entrepreneur works with an open mind and understands that to solve new problems, they must adapt and come up with new solutions.
Social entrepreneurs need all the help they can get to make their vision a reality. People who set down the path of setting up a social enterprise thinking they can do it all have minimal chances of success. Moreover, people and organizations with a philanthropic mindset are eager to collaborate in such ventures, so it is best to take their help and use their talents for the benefit of all.
Inspiration is that spark that keeps a social entrepreneur going. Even though inspiration goes through lows and highs, it is a necessary ingredient. Social entrepreneurs who are not inspired by their cause and vision cannot inspire others and convince them to believe in them.
It is said that Rome was not built in a day. Persistence is a key trait without which a social enterprise cannot become successful. There will be times during this journey when inspiration wanes, and an entrepreneur’s belief may shake. Persisting and believing in the cause during such times helps an entrepreneur come out of tough times with an energized and motivated spirit to carry on.
Let us now discuss the major types of social entrepreneurship.
Community social entrepreneurs are modest contributors who target their immediate communities and aim to solve their problems. They focus on various issues such as sanitation, education, literacy, food, hygiene, health, employment, etc. They are located in small geographical areas with big visions and a team that believes in their goals.
Once they achieve successful results in their communities, they try to expand and reach other communities, paving the way for becoming a bigger social enterprise. Many large-scale social enterprises begin as community social entrepreneurship.
Non-profit social entrepreneurs are more driven by social gain rather than financial gain. They start with the initial cost, and when the business is set up and generates profits, they reinvest the surplus into the cause. This helps them expand their vision and portfolio, allowing them to gradually grow into a bigger social enterprise and solve bigger problems.
For example, let’s assume the initial vision of a social enterprise was to provide free basic healthcare to those in need. As they grow, they put the surplus back and expand their vision to include those in need to get costly surgical procedures.
Generally speaking, big-budget organizations and successful business people choose this model because it is easier for them to generate enough profits to expand.
Transformational entrepreneurship is usually the next stage of non-profit social entrepreneurship. These entrepreneurs target the social needs and problems typically outside the scope of other businesses or governments. Moreover, they are focused on creating a greater social impact while also generating greater economic benefits for the organizations.
These are large-scale organizations with their own set of rules and regulations. In some cases, they grow big enough to collaborate with or integrate into government bodies focused on solving social problems.
Transformational social enterprises have better access to the top talent because of their size and budget. They also recruit people and provide them with in-house training and mentorship to meet the organization’s talent requirements.
Global social entrepreneurs are big players who target social and environmental problems on a global scale. Their goal is to bring a change in social systems using their financial and international standings. Generally, big organizations and multimillionaires go down the path of global social entrepreneurship when they become socially responsible and focus their efforts on bringing positive change.
These organizations have lofty goals, such as fighting food shortages in an impoverished continent or eradicating polio from the world. As a result, they work with a network of other organizations and social entrepreneurs to achieve the desired results. However, their ambitious goals and extensive network also expose them to greater risk, as their failure harms them more than a small–scale social enterprise. Bill & Melinda Gates Foundation is a perfect example of a global social enterprise.
Social entrepreneurship is not just a theory; it revolutionized the world. Let’s take a look at some of the most famous social entrepreneurs striving to make a change in the world.
Known as the “father of social entrepreneurship,” Bill Drayton was the first person to devise and promote the term.
He is the founder of a social enterprise called Ashoka. Its goal is to find entrepreneurs interested in starting social ventures and help them stand on their feet. Ashoka has sponsored about 2,100 fellows in 73 countries around the world up until now.
Scott Harrison led a life of comfort and luxury in New York City, but his perspective changed on his visit to West Africa with a hospital ship charity “Mercy Ships.”This life-altering experience led him to start “Water,” a non-profit social enterprise that aims to provide safe water to 29 countries around the world.
This organization works by providing money to charities that install wells and water filtration plants in areas that need clean, drinkable water. By 2020, his organization had completed 91,414 such projects in developing nations.
Bill Gates got the world’s attention as a commercial entrepreneur, but he quickly shifted his interest toward social entrepreneurship.
Right now, his Bill & Melinda Gates Foundation is the largest private foundation that holds about $46.8 billion in assets. It aims to solve complex problems of human civilization, such as access to advanced healthcare and reduction of extreme poverty.
Inspired by Malala Yousufzai’s desire to promote gender equality in education, Shiza Shahid became the co-founder and global ambassador of the Malala Fund.
It started in 2009 when Shahid approached Malala to organize a camp for her and other Pakistani girls. Shiza Shahid is a fine example of a young entrepreneur who shifted her interests toward social entrepreneurship at a young age. As a result, she was included in time’s “30 under 30” list of world changemakers.
Professor Muhammad Yunus is a social entrepreneur hailing from Bangladesh. A banker and an economist, he was awarded a Nobel Prize in 2006 for founding Grameen Bank. The goal of this bank is to fund villagers and pull them out of poverty.
Grameen bank is a case study example of how banks can also function as social enterprises. Professor Muhammad Yunus has also earned other international awards like the Congressional Gold medal, US Presidential Medal of Freedom, and the Olympic Laurel for his work.
The long-standing culture of capitalistic corporations is under scrutiny as the world is increasingly becoming aware of the impacts their choices can make. People now demand conscious or organic products and services that no longer harm the planet and its inhabitants.
Social enterprises are a viable solution to this problem as they aim to handle social and environmental issues while generating income and livelihood for those working in them.