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UNIT-05
Social Entrepreneurship
Social entrepreneurship is the process by which individuals, startups and entrepreneurs develop
and fund solutions that directly address social issues. A social entrepreneur, therefore, is a person
who explores business opportunities that have a positive impact on their community, in society
or the world.
A social entrepreneur is a person who pursues novel applications that have the potential to solve
community-based problems. These individuals are willing to take on the risk and effort to create
positive changes in society through their initiatives. Social entrepreneurs may believe that this
practice is a way to connect you to your life's purpose, help others find theirs, and make a
difference in the world (all while eking out a living).
One example of social entrepreneurship is microfinance institutions. These institutions provide
banking services to unemployed or low-income individuals or groups who otherwise would
have no other access to financial services. Other examples of social entrepreneurship include
educational programs, providing banking services in underserved areas, and helping children
orphaned by epidemic disease. All of these efforts are intended to address unmet needs within
communities that have been overlooked or not granted access to services, products, or base
essentials available in more developed communities.
EXAMPLES:
The introduction of freshwater services through the construction of new wells is another
example of social entrepreneurship. A social entrepreneur may have the goal of providing
access to communities that lack stable utilities of their own.
In the modern era, social entrepreneurship is often combined with technology assets: for
example, bringing high-speed internet connectivity to remote communities so that school-age
children have more access to information and knowledge resources.
The development of mobile apps that speak to the needs of a particular community is another
way social entrepreneurship is expressed. This can include giving individuals ways to alert their
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city administrations to problems such as burst water mains, downed powerlines, or patterns of
repeated traffic accidents. There are also apps created to report infractions committed by city
officials or even law enforcement that can help give a voice to the community through
technology.
Social entrepreneurship is all about recognizing the social problems and achieving a social
change by employing entrepreneurial principles, processes and operations. It is all about
making a research to completely define a particular social problem and then organizing, creating
and managing a social venture to attain the desired change. The change may or may not include a
thorough elimination of a social problem. It may be a lifetime process focusing on the
improvement of the existing circumstances.
While a general and common business entrepreneurship means taking a lead to open up a new
business or diversifying the existing business, social entrepreneurship mainly focuses on creating
social capital without measuring the performance in profit or return in monetary terms. The
entrepreneurs in this field are associated with non-profit sectors and organizations. But this does
not eliminate the need of making profit. After all entrepreneurs need capital to carry on with the
process and bring a positive change in the society.
SOCIAL ENTREPRENEURSHIP – THE DIFFERENT PERSPECTIVE:
Many scholars believed that social entrepreneurship should be focusing on social missions
solely and profit-oriented organization with social mission objectives should not be
categorized as social entrepreneurship (Dees, 2001; Dees, 2007; Shane, 2003,
Gandy,2012; Helm; 2007). However, though Gandy (2012) and Helm(2007) argues that
way, both of them agreed that social entrepreneurship is a part of entrepreneurship and in many
ways, social entrepreneurship is just an extension of the entrepreneurial model used in the for-
profit sector. Dees (2001) also defined social entrepreneurship as “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.” Thus he agreed
that there’s possibility of having hybrid organization that have both profit and social goals.
Social entrepreneurship definitions and understandings that been proposed contradicts and
creating more confusion on what is the meaning of social entrepreneurship.
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Social entrepreneurship should not have the narrow view by exclusively defining it by non-
profit organizations that
focuses on social missions only. Looking back on the definitions of an entrepreneur, it says that
entrepreneur is an
innovator that creates and exploits opportunity, consequently creating value and change towards
the economy and
society. Therefore, if we add the word social to the word entrepreneur, why does profit has to be
out of the picture?
Financial goals can be in the picture as long as the organization has social mission as well.
Many scholars have started to realized about this issue and supported the idea of hybrid
organization which is
referred as social enterprise or social venture as well (Dorado, 2006; Townsend & Hart, 2008).
This type of social
entrepreneurship focuses on blending business and social goals (Dees, 1998; Dorado, 2006;
Townsend & Hart,
2008). Their organizational performance is evaluated by both financial and social outcomes
(Clark et al., 2004).
These hybrid organizations prove that there is a possibility of maximizing wealth while being
socially responsible
(Dorado, 2006). Thus, a profit oriented organization might be managed in an entrepreneurship
management style as
long as it has social goals as well (Hartigan, 2006). It is suggested that the reason behind this
hybrid organization is
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the personal motivation of the social entrepreneur in reaching out towards the
community’s needs (Townsend &
Opportunities for Social Entrepreneurs in India:
Waste Management:
In a country like India, solid and liquid waste management are undoubtedly the corner stone for
a clean and green India. It is clearly an area of focus.
In Indian context, this is a journey or race with no 'finish line'. On the ground, various solutions,
best practices and business models have emerged. In some areas, we see some cases of dramatic
turnarounds. In many other cases the situation is only worsening owing to delays and at best
inaction. Progress is visible in the space of solid waste management. Sewage or liquid waste
management is still largely left to traditional approaches and conventional systems that either
don't work or are fraught with gaps in implementation.
The current solutions are infrastructure based, require large investments and are always on a
catch up mode. But you as an entrepreneur you can tap this unexploited space with you innovate
idea and can churn out money from here
Deep Cleaning Services:
To keep India clean and green Prime Minister Narendra Modi has initiated the Swatch Bharat
Campaign. But only initiating such campaign won’t make India clean. We need to work
together towards this ambition to make our country tidy.
And for aspiring entrepreneurs this a great sector to tap. Cleaning industry is still untapped and
it needs young blood to step in and change the face of the sector by using their innovative skills
and techniques.
Green Infrastructure:
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Green Infrastructure is vital in providing and connecting life support systems for urban
environments. It includes parks and reserves, gardens, waterways and wetlands, streets and
transport corridors, pathways and greenways, squares and plazas, roof gardens and living walls,
just to name a few. This space provides huge opportunities for entrepreneurs to meet India's
green infrastructure needs in 2016 and beyond.
Water Management:
Water is one of the most important elements of life. But the scarcity of drinking water, is
appalling. In today’s time, access to clean water is the biggest achievement for any family living
in remote areas of the country. You, being an entrepreneur, can look into this matter and figure
out the best way to solve this problem with the help of your entrepreneurial skills.
So if you are planning to become a social entrepreneur, renewable energy or recycling space is
not the only option that you can opt for. There are more major issues and areas which you can
tap and churn out money by helping society to live better life.
The Entrepreneur Support Model:
This model of social enterprise (SE) sells business support services directly to the entrepreneurs
in its target population. In other words, this type of SE helps entrepreneurs get their businesses
off the ground. Support can come in the form of consulting services, training, microfinancing or
technical support. Organizations that belong to this category may include economic
development organizations, business development service organizations and microfinancers.
The Market Intermediary Model
This type of SE generally helps their clients by marketing or selling their clients’ products or
services for them. For example, an organization that helps struggling small farmers by
marketing and to sell their crops for them would belong to this category.
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The Employment Model
This type of SE provides their clients with job opportunities and job training. Revenue
generated by those jobs pays for the SEs expenses and flows back into the services provided for
those in need. Many youth and disabilities organizations adopt this model.
The Fee-for-Service Model
The fee-for-service model is one of the most commonly adopted SE business models. The SE
charges the customer directly for the socially beneficial services it provides. Many hospitals,
schools, museums and membership organizations use the fee-for-service model to a greater or
less degree.
The Low-income Client Model
SEs in this category generally offer social services directly (as in the fee-for-service model)
while focusing on low-income clients. Hospitals and healthcare programs that offer their
healthcare services to low-income patients often adopt this model.
The Cooperative Model
This is one of the most widely recognized categories of SE. The cooperative is generally a fee-
based membership organization that provides member services to a group that shares a common
need or goal. The cooperative is owned and operated by its members, who both run the
cooperative and receive the benefits of its success. Two of the most well-known types of
cooperative include credit unions and employee-owned businesses (“co-ops”).
The Market Linkage Model
SEs that serves as brokers for their clients often adopt this model. These SEs focus on building
relationships and otherwise connecting their clients with markets for their clients’ products and
services. However, unlike SEs adopting the market intermediary model, these SEs generally do
not market or sell their clients’ products and services for them. Many trade associations adopt
the market linkage model.
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The Service Subsidization Model
This type of SE funds social programs by selling products or services in the marketplace.
Service subsidization is one of the most common SE models, as almost any SE can adopt it. In
contrast to organizational support SEs (see below), service subsidization SEs integrate their
internal business with external social programs. For example, a law firm may use the revenue
generated from the firm’s regular law practice to fund a social program that provides free law
services to those in need. The firm may run the program out of their own offices and may
provide the free law services themselves.
Social innovation and sustainability
Social innovations are considered to play a crucial role in sustainability by introducing new
societal practices that contribute to building sustainable economies and lifestyles
Sustainable innovation involves making intentional changes to a company's products, services,
or processes to generate long-term social and environmental benefits while creating economic
profits for the firm.
Innovation has a significant and positive effect on performance in organizational economic
sustainability. When a concern with the dimensions of sustainability is taken, the whole process
of innovation is improved and developed, making it more comprehensive, sophisticated, and
demanding.
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Social Venture
INTRODUCTION:
Definition of Social Venture: a social venture can be described as a formal agreement, a contract
or an undertaking signed by an organization and established by a social entrepreneur regarding a
business. Since a social entrepreneur seeks to solve social problems or effecting social change,
they establish an undertaking with a firm to provide systemic solutions that are driven towards
achieving sustainable social objectives.
The social venture has emerged over the past several decades as a way to identify and bring
about potentially transformative societal change through the development of enterprises to
generate profits along with implementing social agenda. The emergence of social ventures is
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providing new dimensions in overall corporate sector restructuring, which has emphasized
changing corporate strategies by factoring social components as an integral part of the same. The
importance of the social sector due to several social problems prevalent in society is critical. The
social ventures falls into three major categories – leveraged non profit ventures, the hybrid non
profit ventures and social business. Social ventures are becoming widespread across various
sectors of the economy. Social entrepreneurship lays down a roadmap for sustainability and the
corporate knowledge and capabilities can be used to implement social ventures. Companies also
benefit from this kind of an association as they are able to pursue their self interest while creating
better space for individuals to live. Social venture deals with creating high impact social change
so as to make a better and more sustainable space for people to live. In this unit you will read
about various aspects of social venture.
WHAT IS A SOCIAL VENTURE?
According to Brock and Steiner (2010), social entrepreneurship is the creation of social impact
by developing and implementing a sustainable business model which draws on innovative
solutions that benefit the disadvantaged and, ultimately, society at large. Social impact should
involve and make prosperity accessible to a community or stakeholders. Social ventures are
created to solve social problems or for leading to social change. Social ventures are established
to provide systematic solutions to achieve sustainable social objectives. Therefore, a social
venture can be better described as a form of business to solve societal problems. A well
established social venture prioritizes a social good along with business success. Haugh (2007)
defined that the organization that has social objectives and achieves them through business and
trading is termed as a social venture. Social ventures lie in between public and private sector
enterprises. Presently, the social venture is considered a valuable tool to respond to social,
economic, and environmental problems. Any form of the social venture with either profit or non
profit motive, primarily serve the strong social mission and intention. A number of researchers
argued that social ventures have no universal definition (Dees, 1998; Light, 2006; Mair and
Marti, 2006) and the definition of the social venture revolves around the general concept of
entrepreneurship with social interventions and motives. Studies suggest that social
entrepreneurship or ventures are a process or behavior (Mair and Marti, 2006) to offer social
values (Seelos and Mair, 2005 and Waddock and Post, 1991) for stimulating social change. The
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various definitions of social venture reveal that it is multifaceted and a complex phenomenon
(Austin et al., 2006; Mort et al., 2002; Wei-Skillern et al., 2007). A social venture is an old
concept but in academics, it is in the initial stage and lacks the concepts, theories, and specific
definition (Peredo and McLean, 2006; Short et al., 2009). Social ventures include profit and non
profit firms, community organizations, sole proprietorships, societal forums, and others and they
can be differentiated from general commercial ventures based on objectives, commercial
ventures are governed by for the profit motives only while the social ventures are established for
social objectives. However, for providing social benefits, social venture earns profit also. This is
why many companies are flourishing by looking into social problems and global challenges
which have also led many business leaders into innovative decisions. Therefore, now, the success
of enterprises is measured not only in simple commercial business profit terms but are also
gauged in terms of societal impact.
WHY SOCIAL VENTURE?
The main purpose of a social venture is not the maximization of profit but the pursuit of
economic, social, or environmental goals, or a combination of these, to alleviate social exclusion
and unemployment (Organization for Economic Co-operation and Development, 1999). Social
ventures are recognized as an important player in addressing and pervasive societal challenges.
The basic purpose of a social venture is to create social value and address social problems and
challenges through entrepreneurial processes
A social venture is a combination of commerce with a social cause. Here, the entrepreneurs are
not just concerned about profit but they evaluate success also in terms of how their business
improves the world. Social entrepreneurs have roles in terms of shaping social value in society
and creating social value in a complex system of humanity.
Social venture is the new business model:
1. It connects one to his/her life purpose: When social impact is built into one’s business model,
it helps one to live a life of purpose. It is a mechanism to solve social problems and be connected
to a higher purpose in life.
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2. It keeps the person motivated: There are several cases where people successful in one
business have later ventured into a social enterprise. It is the motivation to make a real lasting
impact in someone’s life that has kept them going. They find giving back to the society more
rewarding than any business success.
3. It brings lasting happiness: Social entrepreneurs find lasting happiness in their social impact
work.
4. It helps one to help others in discovering their life purpose: The places where such ventures
are located source the talent needed to make their products from the local community where they
operate.
5. This is what today’s consumers want More and more people these days are interested in
consuming products and services that align with their values.
Examples of Social Venture:
The Grameen Bank: This is a micro finance organization founded in Bangladesh in 1983 by
Muhammad Yunus, and offers microcredit loans. Its main purpose was to make small loans
available to the impoverished without needing any collateral. It has reversed the conventional
banking practice by removing the need for collateral and establishing a banking system based on
accountability, mutual trust, relativity, and participation.
VisionSpring: VisionSpring is a hybrid enterprise. It was founded in 2001 with the aim of
providing affordable quality glasses to the people who need them. The mission statement of
VisionSpring is affordable access to eyewear, everywhere. They provide affordable eyeglasses,
vision screening and training so that non-profits, social entrepreneurs, government agencies, and
corporate clients can help the people in their communities with better vision.
D.Light: D.Light was created in 2007 with a mission to create a brighter future by making clean
energy products universally available and affordable. D.light provides solar energy and clean
energy solutions for households and businesses that are transforming the way people all over the
world use energy. It designs affordable solarpowered devices that provide an option to people
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that lack access to reliable energy sources. In the past 12 years, D.light products have
transformed more than 100 million lives across 70 countries and by doing so it has offset 23
million tons of CO2.
Living Goods: Living Goods is a nonprofit organization founded in San Francisco and has its
operations in Uganda, Kenya, Myanmar, and Washington, DC. Its goal is to build sustainable
community health systems at scale. Living Goods aims to save lives at scale by supporting
digitally empowered community health workers. These community health workers also earn
meaningful compensation and enhance their stature in the process.
Ummeed Child Development Center: Early Childhood Development: Ummeed Child
Development Center is a nonprofit organization that looks at developing those who are at risk of
developmental disability. It provides direct assistance in terms of therapy and assessment and
reaches out to communities which consist of economically backward class. Ummeed has a strong
and determined team that consists of developmental pediatricians, occupational therapists,
physiotherapists, autism therapists, speech therapists, special educators, and counselors. It
intends to reach out to 100,000 children at risk and their families through building capacities of
other NGO’s to address the issues. The direct beneficiaries of this project would be children and
families from the lower income group of society, living in villages in rural India and the urban
slums.
The social venture was created to solve a social problem or to lead to social change. Social
ventures are established to provide systematic solutions to achieve sustainable social
objectives. Therefore, a social venture can be better described as a form of business to solve
societal problems. Social ventures include profit and non profit firms, community organizations,
sole proprietors, societal forums, and others and they are different from general commercial
ventures based on objectives. Commercial ventures govern for the profit motive only while the
social venture is established for social objectives. The main purpose of a social venture is not the
maximization MEDS 053.indd 158 5/26/2021 3:58:26 PM 159 of profit but the pursuit of
economic, social, or environmental goals, or Social Ventures a combination of these, to alleviate
social exclusion and unemployment. There are several business models for running a social
venture across various sectors of the economy.
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What is risk management in social enterprise?
Risk management is the process of identifying, assessing and controlling threats to an
organization's capital and earnings. These risks stem from a variety of sources including
financial uncertainties, legal liabilities, technology issues, strategic management errors, accidents
and natural disasters.
The Entrepreneurship Policy has emerged as the focus of public policies in the majority of the
countries in the recent past. There is an increasing number of Governments paying attention to
entrepreneurship policy and are subsequently implementing strategies in order to enhance the
level of entrepreneurial activity in their nations (Minniti, 2008).
There have been considerable Governmental strategic initiatives for promoting knowledge-based
entrepreneurship as a tool for generating employment, supporting social businesses in particular
and enhancing the global competitiveness of the small firms. E-g; New initiatives under „Make
in India policy (2014) „ministry formation for skill development and entrepreneurship-2014‟,
National policy for skill development and entrepreneurship‟ (2015) etc. This response has
largely been in recognition of changing social and economic environment in the country, rapid
technological advancements, rise of a knowledge based economy, need for inclusive growth,
state inefficiencies in service deliveries, overwhelming share of informal/un-organized sector,
resource limitations, global race for competitiveness, expansion of service sector, private sector
spread, and so on.
Need for policy development:
Social entrepreneurs have been found to operate in diverse sectors (health, education, agriculture,
energy, environment etc.). They deliver different kinds of products or services especially
targeting the marginalized or poor sections of the society.
Existing institutional support to entrepreneurship promotion in India: GOI through various
institutions (especially financial e-g; SIDBI, NABARD; capacity building through academic
institutions e-g; Entrepreneurship Development Institutions- EDI‟s) strive to empower
entrepreneurship by shaping the enabling policies, programs and attitudes towards MSME‟s and
civil society. However, it has a role although small in supporting the functioning of regional SEs.
Further, a certain number of institutions (e-g; Indian industry bodies, CII) have emerged as
enabling the SE sector through various activities related to S-ENT. Further, there is a significant
increase in the engagement of different stakeholders of the social business landscape in India.
Legal framework for social enterprises in India
Unlike many other countries, SEs in India has limited options in terms of legal structures they
can adopt. Typically, SEs in India can take either of the following legal forms:
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Non-profits: or Charitable Organizations- can register themselves under the Indian Trusts Act
(1882) section 25 of Companies Act (1956) State Society registration. E-g Digital Green Teach
for India Akshaya Patra etc.
For-profits: Can adopt either of the structure; sole proprietorship, partnership, limited liability
partnership, private firm and co-operative e.g. Vaatsalya Healthcare dLight etc.
Hybrid structures: incorporating features of both the above structures simultaneously Head
Held High Foundation Fractal Foundation Etc.
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