Professional Documents
Culture Documents
Social Entrepreneurs
"Social entrepreneurs are not content just to give a fish or teach how to fish. They
will not rest until they have revolutionized the fishing industry."- Bill Drayton, CEO
Founder of Ashoka,
"Nonprofits have to recognize that they're businesses, not just causes. There's a
way to combine the very best of the not-for-profit, philanthropic world with the
very best of the for-profit, enterprising world. This hybrid is the wave of the
future for both profit and nonprofit companies." Bill Strickland, CEO of the Manchester
Craftsmen's Guild
1
S.Rengasamy - Understanding Social Entrepreneurship
What do the following great people have in common? All are exemplary social entrepreneurs,
leaders who have identified sustainable solutions to social problems that have fundamentally
changed society.
Jane Addams founded Hull-House in 1889, a social settlement to improve conditions in a
poor immigrant neighborhood in Chicago, then expanded her efforts nationally. Addams gained
international recognition as an advocate of women's rights, pacifism and internationalism, and
served as the founding president of the Women's International League for Peace and Freedom.
Her work ultimately resulted in protective legislation for women and children.
Maria Montessori, the first female physician in Italy, began working with children in 1906
and created a revolutionary education method that supports each individual child's unique
development. Montessori schools allow each child to realize his or her full potential by fostering
social skills, emotional growth and physical coordination, in addition to cognitive preparation.
Muhammad Yunus revolutionized economics by founding the Grameen Bank, or "village
bank," in Bangladesh in 1976 to offer "microloans" to help impoverished people attain economic
2
S.Rengasamy - Understanding Social Entrepreneurship
entrepreneurs act as the change agents for society, seizing opportunities others miss and
improving systems, inventing new approaches and creating sustainable solutions to change
society for the better. However, unlike business entrepreneurs who are motivated by profits,
social entrepreneurs are motivated to improve society. Despite this difference, social
entrepreneurs are just as innovative and change oriented as their business counterparts, searching
for new and better ways to solve the problems that plague society.
Today, social entrepreneurs are working in many countries to create avenues for independence
and opportunity for those who otherwise would be locked into lives without hope. They range
from Jim Fruchterman of Benetech, who uses technology to address pressing social problems
such as the reporting of human rights violations, to John Wood of Room to Read, who helps
underprivileged children gain control of their lives through literacy. They include Marie Teresa
Leal, whose sewing cooperative in Brazil respects the environment and fair labor practices, and
Inderjit Khurana, who teaches homeless children in India at the train stations where they beg
from passengers.
Whether they are working on a local or international scale, social entrepreneurs share a
commitment to pioneering innovation that reshape society and benefit humanity. Quite simply,
they are solution-minded pragmatists who are not afraid to tackle some of the world’s biggest
problems.
3
S.Rengasamy - Understanding Social Entrepreneurship
Social entrepreneurs are solution-minded pragmatists who are not afraid to tackle some of
the world’s biggest problems. They recognize the extraordinary potential in the billions of
poor people who inhabit the planet, and they are absolutely committed to helping them use
their talents and abilities to achieve their potential. Social entrepreneurs use inspiration,
creativity, courage, fortitude and, most importantly, direct action, to create a new reality –
a new equilibrium – that results in enduring social benefit and a better future for everyone.
Social Entrepreneurs are the equivalent of true business entrepreneurs but they operate in
the social, not-for-profit sector building 'something from nothing' and seeking new and
innovative solutions to social problems.
Their aim is to build 'social capital' and 'social profit' to improve the quality of life in
some of the most 'difficult' and 'excluded' communities.
They identify unmet social need and generate solutions based upon a close reading of
the views of those most directly affected.
They normally work in creative partnership with central and local government, business,
religious institutions, charities and other local and national institutions and they are
skilled at constructing such partnerships.
They are skilled at redirecting, using and regenerating underused, abandoned, redundant
or derelict human and physical resources (skills, expertise, contacts, buildings,
equipment and open spaces).
Their work reaches the parts of society other policy initiatives do not touch.
They recognise, encourage and employ skills from different faiths, cultures, traditions
and backgrounds bringing them together in new and creative ways to address practical
problems.
Distinct from a business entrepreneur who sees value in the creation of new markets, the social
entrepreneur aims for value in the form of transformational change that will benefit
disadvantaged communities and, ultimately, society at large. Social entrepreneurs pioneer
innovative and systemic approaches for meeting the needs of the marginalized, the
disadvantaged and the disenfranchised – populations that lack the financial means or political
clout to achieve lasting benefit on their own.
4
S.Rengasamy - Understanding Social Entrepreneurship
Who is an Entrepreneur?
An entrepreneur is person who:
• Creates something new, something different;
• Changes or transmutes values
• Drastically upgrades yield from resources
• Creates new market and new customer by applying
management concepts & techniques
• Is a creator of wealth
• Is innovative; innovation is the specific instrument
of entrepreneurship
Who is a social entrepreneur?
The job of a social entrepreneur is to recognize what part of the society is stuck and to provide new
ways to get it un-stock.
Finds what is not working and solves the problem by changing the system.
Spreading solution and persuading entire societies to take new leaps.
Not content just to give a fish or teach how to fish but instead to revolutionize the entire fishing
industry, so to speak.
Has the committed vision and inexhaustible determination to persist until they have transformed the
entire system
Creative both as goal setting visionaries and in the essential follow-up problem solving
An ultimate realist- do not make political statements nor want to be burned at stake
Obsessed by an idea to change social norms and patterns but when there is a flaw in the design, he is
most willing to change the design.
Not ideological in broader sense: ideology closes the mind to absorbing reality sensitively.
Cannot rest until his/her vision has become the new norm society wide.
Great visionaries and detailed engineers committed to the persistent pursuit of all practical “how to”
issues that must be resolved for the idea to fly.
Possesses an idea that spread with its own merits.
5
S.Rengasamy - Understanding Social Entrepreneurship
6
S.Rengasamy - Understanding Social Entrepreneurship
7
S.Rengasamy - Understanding Social Entrepreneurship
Who is an Entrepreneur?
An innovator or developer who recognizes and seizes opportunities; converts these opportunities
into workable / marketable ideas; adds value through time, effort, money, or skills; assumes the
risks of the competitive marketplace to implement these ideas; and realizes the rewards from
these efforts.
According to some reports, globally this is the fastest growing sector and perhaps the only sector
that is creating gainful employment worldwide
Defining Social Entrepreneurship
Peter Drucker’s views
“Innovation is the specific tool of entrepreneurs, the means by which they exploit changes
as an opportunity for a different business or a different service. It is capable of being
presented as a discipline, capable of being learned and practised. Entrepreneurs need to
search purposefully for the sources of innovation, the changes and their symptoms that
indicate opportunities for successful innovation. And they need to know and to apply the
principles of successful innovation.”
Indian Entrepreneurs
1. Dhirubhai Ambani 2. JRD Tata & Ratan Tata 3. Adi Godrej 4. Anil Ambani
5. Dr K Anji Reddy 6. Azim Premji 7. Bhai Mohan Singh 8. B M Munjal
9. Ekta Kapoor 10.Ghanshyam Das Birla 11. Karsan Bhai Patel 12. Kiran Mazumdar Shaw
13. K.P. Singh 14. Kumar Mangalam Birla 15. Lalit Suri 16. M S Oberoi
17. Mukesh Ambani 18. Nandan Nilekani 19. Narayan Murthy 20. Naresh Goyal
21. Rahul Bajaj 22. Dr C Pratap Reddy 23. Shiv Nadar 24. Vijay Mallya
24. Raunaq Singh 25. Subhash Chandra 26. Subrato Roy 27. Verghese Kurien
And innumerable others
8
S.Rengasamy - Understanding Social Entrepreneurship
Even then why do people normally equate business and entrepreneurship with the profit motive?
Because of mental models
Mental models are deeply ingrained assumptions, generalizations, or even pictures or images that
influence how we understand the world and how we take action.
Very often, we are not aware of our mental models or the effects they have on our behavior
Most people become imprisoned by mental models? This has to be changed
9
S.Rengasamy - Understanding Social Entrepreneurship
10
S.Rengasamy - Understanding Social Entrepreneurship
Bill Drayton, CEO and Chair of Ashoka Innovative Societyʼs Wide/ large
―A leading social entrepreneur sees a new opportunity, solutions most scale
figures it out and then starts introducing it at the local Seizing pressing change
level.‖ new social Changing
Social entrepreneurs are individuals with innovative solutions opportuniti problems the system
to society most pressing social problems. They are es Spreading
ambitious and persistent, tackling major social issues and the solution
offering new ideas for wide-scale change. Social
entrepreneurs find what is not working and solve the
problem by changing the system, spreading the solution,
and persuading entire societies to take new leaps. Social
entrepreneurs act as the change agents for society, seizing
opportunities others miss and
improving systems, inventing new approaches, and creating
solutions to change society for the better. While a business
entrepreneur might create entirely new industries, a social
entrepreneur comes up with new solutions to social
problems and then implements them on a large scale.
Professor Muhammad Yunus, Founder of Grameen Any Serving Social Long-term For-profit
Bank innovative people, business; social goals Not-for-profit
Social entrepreneurship is a very broad idea. As it is initiative planet; non-loss, non-
generally defined, any innovative initiative to help people disadvantage dividend
may be describes as social entrepreneurship. The initiative d groups business
may be economic or non-economic, for-profit or not-for- Surplus
profit. reinvested for
Social business is a subset of social entrepreneurship. All long-term
those who design and run social businesses are social social
entrepreneurs. But not all social entrepreneurs are engaged goals
in social businesses.
A social business can be defined as a non-loss, non-dividend
business. Rather than being passed on to investors, the
surplus generated by the social business is reinvested in the
business in order to support the pursuit of long-term social
goals. The bottom line of a social business is to operate
without incurring losses while serving the people and the
planet- and in particular those among us who are most
disadvantaged- in the best possible manner.
11
S.Rengasamy - Understanding Social Entrepreneurship
12
S.Rengasamy - Understanding Social Entrepreneurship
13
S.Rengasamy - Understanding Social Entrepreneurship
Nonprofit Enterprise and Self-sustainability Team Entreprene Critical social Self-financing Non-profit
(NESsT) ur problem methods
The term social enterprise to refers to "the myriad of ial Generate own
entrepreneurial or 'self-financing' methods used by nonprofit Social income to
organizations to generate some of their own income in innovator support social
support of their social mission. mission
The term social entrepreneur is currently used to mean very Non-profit
different, albeit interesting things. Some use the term social enterprise
entrepreneur to refer to ―social innovator‖ (i.e. an individual Social purpose
that is addressing a critical social problem in a particularly business
effective or innovative way). Others, including NESsT, use Revenue
the term social entrepreneur (or social enterprise) to refer to generating
a CSO (civil society organization) that uses entrepreneurial, venture
business activities as a means to generate income and/or Double
otherwise further its mission impact (e.g., to create Bottom
employment opportunities for underserved constitutes). A Line
social enterprise is also referred to as a ―nonprofit Financial
enterprise,‖ ―social-purpose business,‖ or ―revenue return
generating venture‖ that operates with a ―double bottom w/ social
line‖ of generating financial return while simultaneously mission
advancing a social mission.
Virtue Ventures Mitigating/ Business Social value Not-for-profit
A social enterprise is any business venture created for a reducing a venture Social purpose
social purpose--mitigating/reducing a social problem or a social Financial for profit
market failure--and to generate social value while operating problem discipline business
with the financial discipline, innovation and determination of or market Hybrid
a private sector business. failure organisations
Third Sector Enterprises Social aims Profits Social
Social enterprise is not defined by its legal status but by its through outcomes
nature: its social aims and outcomes, the basis on which its trading
social mission is embedded in it's structure and governance, activities
and the way it uses the profits it generates through its
trading activities.
14
S.Rengasamy - Understanding Social Entrepreneurship
15
S.Rengasamy - Understanding Social Entrepreneurship
The following is the number of times each element is highlighted in In summary, the central elements of social entrepreneurship/ enterprises
each definition: include:
• Innovation – 11 times • Advancing a social mission
• Social Mission – 17 times • Applying innovative processes/ technologies
• Business model – 15 times • Having measurable and scalable impact
• Impact – 12 times Integrating financial sustainability
16
S.Rengasamy - Understanding Social Entrepreneurship
17