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Chapter 1

Social Entrepreneurship

Definition, Distinction betweenEntrepreneurship and Social

Entrepreneurship


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Introduction

Only the individuals can think and create newvalues for society nay, even set up new moralstandards to which the life of community

conforms. Without creative, independentlythinking and judging personalities, the upwarddevelopment of society is as unthinkable as the

development of individual personality without the

nourishing soil of community-- Albert Einstein


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Introduction

An entrepreneur recognizes-

possibilities in the environment,

taps the opportunities and

marshals resources to satisfy a growing need ofcommunity

A social entrepreneur follows the same path but with anoverarching altruisticreason.

Social entrepreneurs reinvent the model of forging the

nicely separated realms of business, government,citizen sectorby bringing together both financial profitand social benefit.


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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 significantsocial changes (Cernea, 1987; Tendlar, 1989).


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Definition

Social Entrepreneurship is a field of practice that deals withapplication of entrepreneurial energy primarily for:

(a) Addressing social and environmental issuesat community

and/or higher levels and(b) Causing social and environmental change through non-

violent, non coercive methods and generating significantimpacts in the target areas and beyond. (This is because insome cases, social change is attempted through

application of violent and coercive methods).(c) Social Entrepreneurship is also a special type of

leadership.


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Definition- cont

A social entrepreneur is any person, in any sector, who uses earnedincome strategiesto pursue a social objective.

Some researchers (Cook, Dodds, & Mitchell, 2001; Wallace, 1999)suggest that social enterprises that carry out for profit activity tosupport other nonprofit activities can be viewed as social

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

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


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Definition- cont

On the fundingside, social entrepreneurs look

for innovative ways to assure that their

ventures will have access to resources as long

as they are creating social value.


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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


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Scope of SEP- cont

Social entrepreneurship is gradually increasingand attracting remarkable attention frommanagers, leaders and many progressive sectors.

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

Social entrepreneurship may be expressed in a

vast array of economic, educational, research,welfare, social and spiritual activitiesengaged inby various organizations (Leadbeater, 1997).


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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)


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Methods of SEP vis--vis traditional EP

Traditional entrepreneurs frequently act in a sociallyresponsible 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.


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SEP vis--vis traditional EP- cont

Social entrepreneurs are different because

their earned income strategies are tied directly to theirmission.

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 thathave a direct impact on a specific social problem (e.g.,working with potential dropouts to keep them inschool, manufacturing assistive devices for people withphysical disabilities, providing home care services thathelp elderly people stay out of nursing homes, etc)


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Traditional entrepreneurs are ultimatelymeasured by financial results. The success orfailure 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 socialreturns. Profitability is still a goal, but it is not the

only goal, and profits are re-invested in themission rather than being distributed toshareholders.


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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


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Social entrepreneurs concentrate on

marginalized sectors of society. They seek

financial sustainability as a means of attaining

objectives such as improving the quality of lifeof their stakeholders and their living

environments. Traditional entrepreneurs may

or may not concentrate on marginalizedsectors of society.


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Social entrepreneurs" are nonprofit

executives who pay increasing attention to

market forces without losing sight of their

underlying missions, to somehow balancemoral imperatives and the profit motives --

and that balancing act is the heart and soul of

Social Entrepreneurship.


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Perspective of Social Entrepreneurship

Social entrepreneurship can be pursued from severalperspectives-

Mitigation of human suffering (social and environmentalrelief 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 andgovernance, and inclusive forms of community

development Natural resource management and sustainable

development

Social movements &poverty alleviation initiatives


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The7 key tasks for Social

Entrepreneurs1. 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 marginalisedgroups or people.

3. They should emphasize systematic learning by individuals and by theorganisation(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 organisationalgrowth to expand their coverage


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The7 key tasks for Social

Entrepreneurs

6. Scaling-up, Capacity building in the society forself helpand packaged need disseminationshould be the focus area of social

entrepreneurship.7. Social transformation leverage and impactsshould vary across in different innovation in thesociety.

(Source: reproduced from the journal of Sarah,Brown and Letts, 2004)


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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 dont play at all

Price your products and services aggressively Stick to your knitting

Build the right team

Be patient

P t ti l itf ll


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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?


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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.


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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. Itmission is to make medical technology and

health care services accessible, affordable and

financially self-sustaining. Aravind offerscomprehensive eye care in the most

systematic way attracting across the world.


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Context- cont

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. Itmission is to empower the poor to become

self-reliant through affordable loans Since

inception, SKS has delivered a full portfolio ofmicro finance to the poor in India.


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Context- cont

Dr. Verghese Kurien:Amulwas created by

government initiative and by the passion of

people like Dr Kurien. The vision was big,

there was passion, there was capital (directand indirect), there was terrific leadership,

sustained and involved engagement with the

grass-roots, and the formation of partnershipsto create the impact via the business.


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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

Industrieshad 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.


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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.


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Contd.

Muhammad Yunus: Grameen Bank (GB) has

reversed conventional banking practice by removingthe 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 havebeen kept outside the banking orbit on the ground

that they are poor and hence not bankable.


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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 nursesand fought to improve

hospital conditions.

Margaret Sanger (U.S.): Founder of the Planned Parenthood

Federationof 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 foundThe Sierra Club.


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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 theyrich 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


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Social Entrepreneurs: A Catalyst for Social

Change

A new approach has arisen to solve the world'stoughest, 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, socialentrepreneurship can produce small changes in

the short term that reverberate through existing

systems to catalyze large changes in the longer

term(Ashoka Innovators, 2000).


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Concluding Words

Social entrepreneurship provides practical solutions to problems pertaining tothe society by combining resource, ideas and innovationsthat 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 traditionalsocialism is capable enough to eradicate social issues without bringing change in

individual mindset. This mindsetis important in this regard. Motivationof

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 existingprofitable 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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Thank You !!

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