Chapter 1

Social Entrepreneurship
Definition, Distinction between
Entrepreneurship and Social
Entrepreneurship
Introduction
Only the individuals can think and create new
values for society nay, even set up new moral
standards to which the life of community
conforms. Without creative, independently
thinking and judging personalities, the upward
development of society is as unthinkable as the
development of individual personality without the
nourishing soil of community
-- Albert Einstein


Introduction
An entrepreneur recognizes-
possibilities in the environment,
taps the opportunities and
marshals resources to satisfy a growing need of
community
A social entrepreneur follows the same path but with an
overarching altruistic reason.
Social entrepreneurs reinvent the model of forging the
nicely separated realms of business, government,
citizen sector by bringing together both financial profit
and social benefit.

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 significant
social changes (Cernea, 1987; Tendlar, 1989).

Definition
Social Entrepreneurship is a field of practice that deals with
application of entrepreneurial energy primarily for:

(a) Addressing social and environmental issues at community
and/or higher levels and
(b) Causing social and environmental change through non-
violent, non coercive methods and generating significant
impacts in the target areas and beyond. (This is because in
some cases, social change is attempted through
application of violent and coercive methods).
(c) Social Entrepreneurship is also a special type of
leadership.

Definition- cont
A social entrepreneur is any person, in any sector, who uses earned
income strategies to pursue a social objective.
Some researchers (Cook, Dodds, & Mitchell, 2001; Wallace, 1999)
suggest that social enterprises that carry out for profit activity to
support other nonprofit activities can be viewed as social
entrepreneurs.
Others have argued that for-profits that may take some innovative
action towards building social capital can be considered as being
socially entrepreneurial (Canadian Centre for Social Entrepreneurship
(CCSE), 2001; Thompson, Alvy, & Lees, 2000).
Thompson (2002) identifies social entrepreneurship as possibly
occurring in profit seeking businesses that have some commitment to
doing good. They are set up for a social purpose but operating as
businesses and in the voluntary or nonprofit sector.


Definition- cont
On the funding side, social entrepreneurs look
for innovative ways to assure that their
ventures will have access to resources as long
as they are creating social value.
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

Scope of SEP- cont
Social entrepreneurship is gradually increasing
and attracting remarkable attention from
managers, leaders and many progressive sectors.
The term itself gained lime-light in the media,
and has become the strategy of several
prominent social sector organizations.
Social entrepreneurship may be expressed in a
vast array of economic, educational, research,
welfare, social and spiritual activities engaged in
by various organizations (Leadbeater, 1997).
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)

Methods of SEP vis--vis traditional EP
Traditional entrepreneurs frequently act in a socially
responsible 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.
SEP vis--vis traditional EP- cont
Social entrepreneurs are different because
their earned income strategies are tied directly to their
mission.
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 that
have a direct impact on a specific social problem (e.g.,
working with potential dropouts to keep them in
school, manufacturing assistive devices for people with
physical disabilities, providing home care services that
help elderly people stay out of nursing homes, etc)

SEP vis--vis traditional EP- cont
Traditional entrepreneurs are ultimately
measured by financial results. The success or
failure 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 social
returns. Profitability is still a goal, but it is not the
only goal, and profits are re-invested in the
mission rather than being distributed to
shareholders.

SEP vis--vis traditional EP- cont
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

SEP vis--vis traditional EP- cont
Social entrepreneurs concentrate on
marginalized sectors of society. They seek
financial sustainability as a means of attaining
objectives such as improving the quality of life
of their stakeholders and their living
environments. Traditional entrepreneurs may
or may not concentrate on marginalized
sectors of society.

SEP vis--vis traditional EP- cont
Social entrepreneurs" are nonprofit
executives who pay increasing attention to
market forces without losing sight of their
underlying missions, to somehow balance
moral imperatives and the profit motives --
and that balancing act is the heart and soul of
Social Entrepreneurship.

Perspective of Social Entrepreneurship
Social entrepreneurship can be pursued from several
perspectives-
Mitigation of human suffering (social and environmental
relief 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 and
governance, and inclusive forms of community
development
Natural resource management and sustainable
development
Social movements & poverty alleviation initiatives

The7 key tasks for Social
Entrepreneurs
1. 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 marginalised
groups or people.
3. They should emphasize systematic learning by individuals and by the
organisation (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 organisational
growth to expand their coverage

The7 key tasks for Social
Entrepreneurs
6. Scaling-up, Capacity building in the society for
self help and packaged need dissemination
should be the focus area of social
entrepreneurship.
7. Social transformation leverage and impacts
should vary across in different innovation in the
society.
(Source: reproduced from the journal of Sarah,
Brown and Letts, 2004)

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

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?

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.

Social entrepreneurs- Indian
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. It
mission is to make medical technology and
health care services accessible, affordable and
financially self-sustaining. Aravind offers
comprehensive eye care in the most
systematic way attracting across the world.

Social entrepreneurs- Indian
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. It
mission is to empower the poor to become
self-reliant through affordable loans Since
inception, SKS has delivered a full portfolio of
micro finance to the poor in India.
Social entrepreneurs- Indian
Context- cont
Dr. Verghese Kurien: Amul was created by
government initiative and by the passion of
people like Dr Kurien. The vision was big,
there was passion, there was capital (direct
and indirect), there was terrific leadership,
sustained and involved engagement with the
grass-roots, and the formation of partnerships
to create the impact via the business.

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
Industries had 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.


Some famous Examples of Leading Social Entrepreneurs
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.
Contd.

Muhammad Yunus: Grameen Bank (GB) has
reversed conventional banking practice by removing
the 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 have
been kept outside the banking orbit on the ground
that they are poor and hence not bankable.


Some famous Examples of Leading Social Entrepreneurs

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 nurses and fought to improve
hospital conditions.

Margaret Sanger (U.S.) : Founder of the Planned Parenthood
Federation of 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 found The Sierra Club.

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 they
rich 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

Social Entrepreneurs: A Catalyst for Social
Change
A new approach has arisen to solve the world's
toughest, 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, social
entrepreneurship can produce small changes in
the short term that reverberate through existing
systems to catalyze large changes in the longer
term (Ashoka Innovators, 2000).
Concluding Words

Social entrepreneurship provides practical solutions to problems pertaining to
the society by combining resource, ideas and innovations that 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 traditional
socialism is capable enough to eradicate social issues without bringing change in
individual mindset. This mindset is important in this regard. Motivation of
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 existing
profitable 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.


Thank You !!