an integral part o the social enter-prise paradigm, hence
the issue isless of perpetuating a money myththan missing a mission opportunity
rouc mnnt—Not “Poft”
The perception that social enter-prise is strictly about earned-incomeor proit is misleading. No amounto proit makes up or ailure on thesocial impact side o the equation. Any social entrepreneur who gener-ates proits, but then ails to convertthem into meaningul social impactin a cost eective way has wasted valuable resources.
Social enterpriserequires eective resource manage-ment, which must go beyond the nar-row view that inancial resources arethe only resources. Typically, nonpro-its most valuable resources are their people, networks or members, andintangible assets such as methodolo-gies, content, reputation
socialimpact. An integrated approach tosocial enterprise recognizes the inan-cial as well as non-inancial capital(human, social, environmental andphysical) and motivates practitionersto productively employ and managethese assets.
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Little research has been con-ducted to ascertain why socialenterprises ail, however, the practicespeaks volumes—cultural tensionand low capacity are the main oend-ers. Change is hard and resistance tochange is human nature, present inboth or-proit and nonproit sectors.Social enterprise challenges the tra-ditional concept o charitable actionand its implications on social struc-tures—do we (western society) really want the poor no longer poor, or thehomeless no longer homeless?These potential institutionalbeneits o social enterprise, i letunmanaged, are equally a source o institutional risk. Authors and practi-tioners have shared many a caution-ary tale o mission creep, culturalstrie, stakeholder and/or sta ten-sions, lack o vision or capable lead-ership, inancial losses, operationalineiciencies, weak marketing, andthreats to an organization’s reputa-tion.Much o the value o social enter-prise is in the process-or example,the learning gained developing abusiness plan oten exceeds the valueo the plan itsel. Social enterprise isan organizational change and trans-ormation process, thereore thereis a need to deine a ramework or monitoring the impacts that theprocess o developing and managingenterprise activities has on nonproitsthemselves.
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Microinance institutions (MFI)are quintessential social enterprisesand their leaders are some o the world’s most ormidable social entre-preneurs, yet they have largely absentrom the conversation. From early on microinance practitioners imple-mented MFIs as a vehicle by which to achieve wide-scale sustainablesocial impact. The microinance meth-odology takes a holistic approach,its ethos is that the “social programs”(micro-credit services) must be insti-tutionalized in order to be a goingconcern. Social programs and impactare not disaggregated rom businessactivities and inancial aspects o the organization, rather they are anintegral part o the business model.Capacity building is an enduring pro-cess and central to implementationand development o the MFI. Last year’s Micro Credit Summit celebrat-ed reaching 100 million poor borrow-ers. This is success, yet little has beendone to learn rom their experienceor share their immense intellectualcapital with other practitioners.
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The reality o the current state o practice is that social enterprises areexecuted in isolation—treated as adistinct project or activity—when in
“Social enterprise as atool for achieving mis-sion has come to thefore. It’s more than arevenue strategy. Peopleare beginning to look atit as a tool of economicempowerment for thecommunities they serve.It’s not just anotherfund-raising tool—it’sa mission fulfillmenttool!”
—Yma Gordon,Program Officer, Ms.Foundation for Women