Rengasamy - Understanding Social Entrepreneurship

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

The nonprofit environment has changed.  Community needs are growing in size and diversity.  More nonprofits are competing for government and philanthropic funds.  Traditional forms of funding are becoming smaller and less reliable.  New for-profit businesses are competing with nonprofits to serve community needs.  Funders and donors are demanding more accountability. "In the face of this new reality, an increasing number of forward-looking nonprofits are beginning to appreciate the increased revenue, focus and effectiveness that can come from adopting "for profit" business approaches. Increasingly, they are reinventing themselves as social 1

S.Rengasamy - Understanding Social Entrepreneurship entrepreneurs, combining "the passion of a social mission with an image of business-like discipline, innovation, and determination." J. Gregory Dees.

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

self-sufficiency through self-employment, a model that has been replicated in 58 countries around the world.  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. Mahatma Gandhi described him as his mentor  Dr.Verghese Kurien (India) - Founder of the AMUL Dairy Project which has revolutionized the dairy industry through the production chain of milk, small producers, consumer products and health benefits Just as entrepreneurs change the face of business, social 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. Social entrepreneurs are:  Ambitious: Social entrepreneurs tackle major social issues, from increasing the college enrollment rate of low-income students to fighting poverty in developing countries. These entrepreneurial leaders operate in all kinds of organizations: innovative nonprofits, social purpose ventures such as for-profit community development banks, and hybrid organizations that mix elements of nonprofit and for-profit organizations.  Mission driven: Generating social value-not wealth-is the central criterion of a successful social entrepreneur. While wealth creation may be part of the process, it is not an end in itself. Promoting systemic social change is the real objective.  Strategic: Like business entrepreneurs, social entrepreneurs see and act upon what others miss: opportunities to improve systems, create solutions and invent new approaches that create social value. And like the best business entrepreneurs, social entrepreneurs are intensely focused and hard-driving-even relentless-in their pursuit of a social vision.  Resourceful: Because social entrepreneurs operate within a social context rather than the business world, they have limited access to capital and traditional market support systems. As a result, social entrepreneurs must be exceptionally skilled at mustering and mobilizing human, financial and political resources.  Results oriented: Ultimately, social entrepreneurs are driven to produce measurable returns. These results transform existing realities, open up new pathways for the marginalized and disadvantaged, and unlock society’s potential to effect social change. 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.


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.

Who is a Social Entrepreneur? Entrepreneurs are essential drivers of innovation and progress. In the business world, they act as engines of growth, harnessing opportunity and innovation to fuel economic advancement. Social entrepreneurs act similarly, tapping inspiration and creativity, courage and fortitude, to seize opportunities that challenge and forever change established, but fundamentally inequitable systems.
Bunker Roy is an example to understand who is a social entrepreneur. He created the Barefoot College in rural communities in India to train illiterate and semiliterate men and women, whose lack of educational qualifications keeps them mired in poverty. Today Barefoot College graduates include teachers, health workers and architects who are improving communities across India, including hundreds of "barefoot" engineers who have installed and maintain solar-electrification systems in over 500 villages, reaching over 100,000 people.

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.


S.Rengasamy - Understanding Social Entrepreneurship


S.Rengasamy - Understanding Social Entrepreneurship 


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 5. Dr K Anji Reddy 6. Azim Premji 9. Ekta Kapoor 10.Ghanshyam Das Birla 13. K.P. Singh 14. Kumar Mangalam Birla 17. Mukesh Ambani 18. Nandan Nilekani 21. Rahul Bajaj 22. Dr C Pratap Reddy 24. Raunaq Singh 25. Subhash Chandra And innumerable others 3. Adi Godrej 7. Bhai Mohan Singh 11. Karsan Bhai Patel 15. Lalit Suri 19. Narayan Murthy 23. Shiv Nadar 26. Subrato Roy 4. Anil Ambani 8. B M Munjal 12. Kiran Mazumdar Shaw 16. M S Oberoi 20. Naresh Goyal 24. Vijay Mallya 27. Verghese Kurien

Social Entrpreneurship in Teaching & Research Skoll Center for Social Entrepreneurship (Oxford Said Business School) Center for Advancement of Social Entrepreneurship (Faqua Business School, Duke University) Catherine B Reynold Program for Social Entrepreneurship (New York University) Entrepreneurship in Social Sector Program (Harvard Business School) Schwab Foundation for Social Entrepreneurs (University of Geneva) and Social Entrepreneurship Course Series (Stanford University)

Social Entrepreneurship is the process of recognizing and resourcefully pursuing opportunities to create social value and craft innovative approaches to addressing critical social needs. By “Social Entrepreneurs,” we mean leaders of social-purpose organizations Two types of entrepreneurs according to motivation Profit-centered entrepreneur: An entrepreneur who creates wealth for himself and his immediate family, regardless of adverse consequences to society and the environment. The Socially Responsible Entrepreneur or Social Entrepreneur: An entrepreneur who helps creates wealth not only for his benefit but also for the benefit of his workers and the community at large, while protecting the environment for future generation.


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
Old Economy profit is supreme ―invisible hand‖ rules free access to information resources are depleted people can adjust to Paradigm Shift in Mental Models Socially Responsible Economy ―triple bottom line‖ organized stakeholders get a handle of market stakeholders‗ participation in market systems design & application resources can be renewed, recycled build learning organizations that economic dislocations allow people to acquire new knowledge/skills

Mother Theresa as one of the greatest
Examples of Social Entrepreneurs 1. Amul and Verghese Kurien in Anand 2. Basix and Vijay Mahajan, Hyderabad 3. Bhagavatula Charitable Trust, Vizag, AP 4. Child Relief (Rights) and You (CRY) 5. Grameen Bank, Bangladesh 6. FINCA – Village Banking 7. Food King – Sarath Babu, Chennai 8. Lizzat Papad (SGMU), Mumbai 9. Polyhydron, Suresh Hundre, Belgaum 10. SEWA, Ahmedabad
entrepreneurs of our time. She started with an angel investment of five rupees in 1948 from the Archbishop of Calcutta. By the turn of the century, her Missionaries of Charity had 602 homes in 125 countries and her band of 4,000 sisters from as many as 40 different national origins marched to the same mission, vision and core values. How did she build that institution? What was the impetus? Disease and death that crawled in the gutters of Calcutta and nudged her sari each time she walked past? Was it the negative energy of her surroundings? Or was it the possibility of positive outcomes? Or spreading love, joy, seeing a dying destitute as an angel of peace? It wasn’t the former. She was to recall later that she had, in fact, ‘received’ her call….


S.Rengasamy - Understanding Social Entrepreneurship

Social Entrepreneurship Definition Matrix
(Adopted from Change Fusion ) Prepared by S. Dev Appanah & Brooke Estin Definitions by Organizations/ Individuals J. Gregory Dees, Professor of Social Entrepreneurship at Duke University Social entrepreneurs are reformers and revolutionaries, as described by Schumpeter, but with a social mission. They make fundamental changes in the way things are done in the social sector. Their visions are bold. They attack the underlying causes of problems, rather than simply treating symptoms. They often reduce needs rather than just meeting them. They seek to create systemic changes and sustainable improvements. Though they may act locally, their actions have the potential to stimulate global improvements in their chosen arenas, whether that is education, health care, economic development, the environment, the arts, or any other social field. In addition to innovative not-for-profit ventures, social entrepreneurship can include social purpose business ventures, such as for-profit community development banks, and hybrid organizations mixing not-for-profit and for-profit elements, such as homeless shelters that start businesses to train and employ their residents. The new language helps to broaden the playing field. Social entrepreneurs look for the most effective methods of serving their social missions.
Innovation Social Mission Business model Impact Organizational structure

Attack underlying causes

Education Health-care Economic development Environment

Social purpose business Community development banks Hybrid Organizations

Create social/ environmental value Local action w/ potential for global improvement

Not-for-profit Social purpose business


Shelters starting businesses

Large scale Systemic change Sustainable improvements

Hybrid organizations


S.Rengasamy - Understanding Social Entrepreneurship
Bill Drayton, CEO and Chair of Ashoka ―A leading social entrepreneur sees a new opportunity, figures it out and then starts introducing it at the local level.‖ Social entrepreneurs are individuals with innovative solutions to society most pressing social problems. They are ambitious and persistent, tackling major social issues and 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 Bank Social entrepreneurship is a very broad idea. As it is generally defined, any innovative initiative to help people may be describes as social entrepreneurship. The initiative may be economic or non-economic, for-profit or not-forprofit. Social business is a subset of social entrepreneurship. All those who design and run social businesses are social entrepreneurs. But not all social entrepreneurs are engaged 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. Innovative solutions Seizing new opportuniti es Societyʼs most pressing social problems Wide/ large scale change Changing the system Spreading the solution

Any innovative initiative

Serving people, planet; disadvantage d groups

Social business; non-loss, nondividend business Surplus reinvested for long-term social goals

Long-term social goals

For-profit Not-for-profit


S.Rengasamy - Understanding Social Entrepreneurship
Social Enterprise Alliance USA A social enterprise is an organization or venture that advances its social mission through entrepreneurial, earned income strategies. Social enterprise describes any non-profit, for-profit or hybrid corporate form that utilizes market-based strategies to advance a social mission Social Enterprise Coalition UK Social enterprises are businesses set up to tackle a social or environmental need. Many commercial businesses would consider themselves to have social objectives, but social enterprises are distinctive because their social or environmental purpose is central to what they do. Rather than maximizing shareholder value their main aim is to generate profit to further their social and environmental goals. Social enterprise is a business model which offers the prospect of a greater equity of economic power and a more sustainable society - by combining market efficiency with social and environmental justice. Jed Emerson, Stanford Graduate School of Business By ―social enterprise‖ we mean the application of business models and acumen to address social issues, whether through non-profit or for-profit corporate structures. New Profit Inc Social entrepreneurs are visionaries who generate innovations with the potential to transform a problem or field; possess exceptional abilities to rally the human and financial resources to transform their vision into a reality; and deliver high-quality social impact. Social entrepreneurs have powerfully demonstrated their models, and with an infusion of financial and strategic resources can take their social innovations to scale. Transforma tional innovation Social innovations Social mission Earned income strategies Market-based strategies to advance social mission Business to tackle social/ environmental need Generate profit to further social/ environmental goals Business models and acumen to address social issues Infusion of financial and strategic resources to scale social innovations Non-profit For-profit Hybrid corporate form Earned income strategies Not-for-profit Social purpose business Hybrid organisations

Social and environment al need Social or environment al objectives are central to the organisation Social issues

Greater equity of economic power and a more sustainable society

Non-profit For-profit corporate High-quality social impact Not-for-profit Social purpose business Hybrid organizations


S.Rengasamy - Understanding Social Entrepreneurship
Schwab Foundation for Social Entrepreneurs A social enterprise is an organization that achieves large scale, systemic and sustainable social change through a new invention, a different approach, a more rigorous application of known technologies or strategies, or a combination of these. Social entrepreneurs are leaders, change driven, passionate, innovative, risk-takers, believers in people, high standards. A social entrepreneur combines the characteristics represented by Richard Branson and Mother Teresa Skoll Foundation The social entrepreneur aims for value in the form of transformational change that will benefit disadvantaged communities and ultimately society at large. Just as entrepreneurs change the face of business, social entrepreneurs act asthe change agents for society, seizing opportunities others miss by improving systems, inventing new approaches and creating sustainable solutions to change society for the better. The Small Enterprise Education and Promotion (SEEP) Network A social enterprise is a nonprofit organization or socially oriented venture that advances its social mission through entrepreneurial market-based approaches to increase its effectiveness and financial sustainability with the ultimate goal of creating social impact or change. Social enterprise is about linking financial and moral incentives in business and the marketplace. Social enterprise has synergies with existing poverty alleviation approaches— value chain development, market development, and microfinance—and can augment and add value to current initiatives as well as provide new tools. The Roberts Foundation Homeless Economic Development Fund A revenue generating venture founded to create economic opportunities for very low income individuals, while simultaneously operating with reference to the financial bottom-line. New invention Different Approach Rigorous application of known Large scale, systemic and sustainable social change

technologies / strategies Inventing new approaches Disadvantaged communities and society at large Sustainable solutions Transformational change Not-for-profit Social purpose for profit business Hybrid organizations

New invention Different Approach

Socially oriented Poverty alleviation Value chain development Market development Microfinance

Market-based approaches Financial sustainability Linking financial and moral incentives in business and the marketplace Revenue generating venture Financial bottom-line

improvement Economic Improvement Quantitative and Qualitative measure Policy Change

Non-profit Socially oriented

Create economic opportunities


S.Rengasamy - Understanding Social Entrepreneurship
Nonprofit Enterprise and Self-sustainability Team (NESsT) The term social enterprise to refers to "the myriad of entrepreneurial or 'self-financing' methods used by nonprofit organizations to generate some of their own income in support of their social mission. The term social entrepreneur is currently used to mean very different, albeit interesting things. Some use the term social entrepreneur to refer to ―social innovator‖ (i.e. an individual that is addressing a critical social problem in a particularly effective or innovative way). Others, including NESsT, use the term social entrepreneur (or social enterprise) to refer to a CSO (civil society organization) that uses entrepreneurial, business activities as a means to generate income and/or otherwise further its mission impact (e.g., to create employment opportunities for underserved constitutes). A social enterprise is also referred to as a ―nonprofit enterprise,‖ ―social-purpose business,‖ or ―revenue generating venture‖ that operates with a ―double bottom line‖ of generating financial return while simultaneously advancing a social mission. Virtue Ventures A social enterprise is any business venture created for a social purpose--mitigating/reducing a social problem or a market failure--and to generate social value while operating with the financial discipline, innovation and determination of a private sector business. Third Sector Enterprises Social enterprise is not defined by its legal status but by its nature: its social aims and outcomes, the basis on which its social mission is embedded in it's structure and governance, and the way it uses the profits it generates through its trading activities. Entreprene ur ial Social innovator Critical social problem Self-financing methods Generate own income to support social mission Non-profit enterprise Social purpose business Revenue generating venture Double Bottom Line Financial return w/ social mission Business venture Financial discipline Profits through trading activities Social value Non-profit

Mitigating/ reducing a social problem or market failure Social aims

Not-for-profit Social purpose for profit business Hybrid organisations

Social outcomes


S.Rengasamy - Understanding Social Entrepreneurship
Social Enterprise Ambassadors Social enterprises are profit-making businesses set up to tackle a social or environmental need. Many commercial businesses would consider themselves to have social objectives, but social enterprises are distinctive because their social or environmental purpose is central to what they do. Rather than maximizing shareholder value, their main aim is to generate profit to further their social and environmental goals. By combining a public service ethos with a commercial focus on efficiency and good business practice, social enterprises are able to deliver on the things that really matter, whilst remaining both independent and sustainable. Social Ventures Australia At SVA, we define a social enterprise as a non-profit business whose purpose is to create employment for marginalized people. Marginalized people include people with disability, people with mental illness, refugees, indigenous Australians and other long-term unemployed people. The Non-profit Good Practice Guide A non-profit venture that combines the passion of a social mission with the discipline, innovation and determination commonly associated with for-profit businesses. University of Wisconsin- Madison Social Entrepreneurship is the application of innovative ideas to solve social problems. A social entrepreneur is someone who recognizes a social problem and uses entrepreneurial principles to organize, create, and manage a venture to create change.
Enterprising Non-Profits Social enterprises are businesses operated by non-profits, with the dual purpose of generating income by selling a product or service in the marketplace andcreating a social, environmental or cultural value. The term "social enterprise" to refer to business ventures operated by non-profits,whether they are societies, charities, or cooperatives.

Social or environment al need Social or environment al purpose is central to activities Public service ethos
Employment for marginalized people

Profit-making businesses Generate profit to further social and environmental goals Commercial focus Independent and sustainable
Non-profit business Non-profit business


Innovative ideas

Solve social problem

Create change

Selling product or service

Create social/ environment al value

Non-profit Societies Charities Co-operatives


S.Rengasamy - Understanding Social Entrepreneurship
The following is the number of times each element is highlighted in each definition: Innovation – 11 times Social Mission – 17 times Business model – 15 times Impact – 12 times In summary, the central elements of social entrepreneurship/ enterprises include: Advancing a social mission Applying innovative processes/ technologies Having measurable and scalable impact Integrating financial sustainability

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S.Rengasamy - Understanding Social Entrepreneurship


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