Who is a Social entrepreneur?
Social entrepreneurs are the individuals motivated to solve the pressing problems of the society by using innovative solutions. Innovation can be either in business model, processes, technology etc. These individuals are ambitious, persistent and driven to tackle major social issues and offer new ideas for wide-scale change.
Social entrepreneurs take the onus on themselves rather than leaving the societal needs to the government or business sector. They find what is not functioning in the society and solve the problem by changing the system, offering new solutions and spreading it while persuading the whole society to accept the change.
Social entrepreneurship is:
- o Applying innovative, sustainable and scalable approaches to benefit the society while solving their pressing issues.
- o Keeping marginalized and poor in the center of their model.
- o Unique approach to economic and social problems, an approach that cuts across sectors grounded in certain values and process that are common to each social entrepreneur, independent of whether his/ her area of focus has been education, health, welfare reform, human rights, workers’ rights, environment, economic development, agriculture, etc., or whether the organizations they set up are non-profit or for-profit entities.
The different organizational models that can be used by social entrepreneurs:
Leveraged non-profit ventures
The entrepreneur sets up a non-profit organization to drive the adoption of an innovation that addresses a market or government failure. In doing so, the entrepreneur engages a cross section of society, including private and public organizations, to drive forward the innovation through a multiplier effect. Leveraged non-profit ventures continuously depend on outside philanthropic funding, but their longer-term sustainability is often enhanced given that the partners have a vested interest in the continuation of the venture.
Hybrid non-profit ventures
The entrepreneur sets up a non-profit organization but the model includes some degree of cost-recovery through the sale of goods and services to a cross section of institutions, public and private, as well as to target population groups. Often, the entrepreneur sets up several legal entities to accommodate the earning of an income and the charitable expenditures in an optimal structure. To be able to sustain the transformation activities in full and address the needs of clients, who are often poor or marginalized from society, the entrepreneur must mobilize other sources of funding from the public and/or philanthropic sectors. Such funds can be in the form of grants or loans, and even quasi-equity.
Social business ventures
The entrepreneur sets up a for-profit entity or business to provide a social or ecological product or service. While profits are ideally generated, the main aim is not to maximize financial returns for shareholders but to grow the social venture and reach more people in need. Wealth accumulation is not a priority and profits are reinvested in the enterprise to fund expansion. The entrepreneur of a social business venture seeks investors who are interested in combining financial and social returns on their investments.