What is a social entrepreneur?

Discussions of Social Entrepreneurs and Their Work with Nonprofits

Social entrepreneurs are entrepreneurs pursuing a social mission and substitute profits for social causes. A social entrepreneur uses formal strategic management practices primarily in the public and nonprofit sectors to solve a range of social problems in the areas of health, safety, environmental protection, and community involvement.

Few words are as abused in the lexicon of the business world, as ill defined in the management literature, and as open to multiple meanings as entrepreneurship. The concept of entrepreneurship has been in our modern society for thousands of years and in the history of economic study the word has been overused, and in some cases underused. Carl Voigt, dean of the Marshall School of Business at the University of Southern California, explains, “We sort of defined entrepreneurialism too narrowly as someone who wants to start their own business. But entrepreneurialism can also mean finding new business opportunities and expansion at existing companies.”

Starting with practically nothing, an entrepreneur is one who organizes a new venture, manages it, and assumes the associated risk. At the Global Entrepreneurship Institute the term entrepreneur is broadly defined to include business owners, innovators, and executives in need of capital to start a new project, introducing a new product, or expanding a promising line of business. We include technology transfer experts, technologists at leading universities, and consultants and advisors assisting in all aspects of venturing. An entrepreneur’s principal objectives are profit and growth, and they will employ formal strategic management practices to achieve them.

Wendell Dunn, professor of entrepreneurship at the University of Virginia’s Darden Business School, believes that “entrepreneurs are in it to prove a point.” Steven Berglas, instructor at The Harold Price Center for Entrepreneurial Studies at UCLA, has devoted a career to understanding what makes serial entrepreneurs tick. He found they “leave as many intellectual and creative entities for others to derive developmental opportunities from as possible.”

After a ten-year period of teaching and studying entrepreneurship at Harvard Business School, Amar Bhide concluded that “it takes a really extraordinary individual to build a promising company—extraordinary in terms of someone who has an almost maniacal level of ambition. Not just an ambition to make a comfortable living, to make a few million dollars, but someone who wants to leave a significant mark on the world.” As technology guru George Gilder describes it, “Because an entrepreneur can never be sure of a return on his investment, starting up a business is like offering a gift to the world, in the hope, but never the certainty, that the gift will be reciprocated.”

What is a social entrepreneur?
Social entrepreneurs are entrepreneurs pursuing a social mission and substitute profits for social causes. A social entrepreneur uses formal strategic management practices primarily in the public and nonprofit sectors to solve a range of social problems in the areas of health, safety, environmental protection, and community involvement.

Social entrepreneurship is nothing new. Social and nonprofit entrepreneurs who pursue endeavors for the benefit of society have existed since ancient times. In fact, the word philanthropy is derived from a Greek word that means “lover of mankind.” Today it is believed that entrepreneurism above and innovation can also help “spark positive social change.”

Social entrepreneurs can work at the local level independently—everything from sponsoring the local youth sports teams, to volunteering as a mentor. Social entrepreneurs can work inside of existing companies with large teams—launching a corporate-wide health fair, to solving work environments for a supplier on the other side of the world. Social entrepreneurs can devote a lifetime to designing environmentally sound products inside a huge multibillion-dollar corporation. Social entrepreneurs can create a project to clean up their local beach for one day out of the year.

Social entrepreneurs attempt to influence specific behaviors that will improve health, prevent injuries, educate the poor, protect the environment, lessen the burdens of governments, and create other project that contribute positively to communities. Social entrepreneurs working inside of an existing business can help their businesses improve their bottom line by leveraging a nonprofit partnership to enhance their image, reach new markets, increase consumer loyalty, and build a positive reputation with current and prospective employees.

Social Entrepreneurs address these major issues:

 – Health.Examples include: teen pregnancy prevention, nutrition education, diabetes prevention, adult physical activity, tobacco use and control, arthritis diagnosis and treatment, immunizations, dental hygiene, senior wellness and aging, eating disorder awareness, binge drinking, obesity, physical activity, immunizations, nutrition, sexually transmitted diseases, blood pressure, oral health, high cholesterol, and skin, breast, prostate and colon cancer.

 – Safety and Injury Prevention. Examples include: drowning prevention, underage drinking and driving, youth suicide prevention, binge drinking, traffic safety, safe gun storage, falls, household fires, suicide, sexual assault, domestic violence, disaster preparedness, seatbelt, car-seat and booster seat usage.

 – Environmental Concerns and Protection. Examples include: natural gardening, preservation of fish and wildlife habitat, recycling, trip reduction, water quality, waste reduction, water quality, energy conservation, air pollution, litter, beach protection, wildlife habitat protection, forest preservation, and hazardous waste disposal.

 – Community Development and Involvement. Examples include: arts, religious activities, educational, youth sports programs, organ donation, blood donation, volunteering, voting, crime prevention, animal rights, advancing technology to the poor, and delivering meals to seniors. The scope can be in the neighborhood, or on the other side of the world.

 – Disaster Relief and Prevention. Examples include: earthquakes, natural disasters, fires, tsunamis, hurricanes, tornadoes, typhoons, and fallout from geopolitical tensions and wars like epidemics and mass starvation.

Defining Social Entrepreneurial Activity
A social entrepreneur may work independently, within a fully structured “not-for-profit” central organization, or lead a local association that is affiliated with a larger nonprofit central organization or corporation. An organization may qualify as a nonprofit and tax-exempt status in the United States by the IRS if it is organized and operated exclusively for providing services beneficial to the public interest. Examples are one or more of the following purposes: charitable, religious, educational, scientific, literary, fostering national or international amateur sports competition, and the prevention of cruelty to children or animals. To qualify, the organization must be a corporation, community chest, fund, or foundation. Examples of qualifying organizations include nonprofit old-age homes, parent-teacher associations, charitable hospitals, medical research organizations, endowment funds, or other charitable organizations, alumni associations, schools, chapters of the Red Cross or Salvation Army, Boys’ or Girls’ clubs, and churches.

Nonprofit does not mean literally that an entrepreneur or the organization cannot make a profit. Under the U.S. federal law and state corporate statutes, as long as the organization is organized, structured and operated for a recognized nonprofit purpose, it can take in more money that it spends on its operating activities. A nonprofit organization may use its tax-free profits for ongoing operating expenses (including salaries for officers, directors, and employees) or for the benefit of the organization. What a nonprofit cannot do is distribute any of the profits for the benefits of its officers, directors, or employees, like dividends.

Central Organization
A central organization is an organization that is formally structured, incorporated, and has substantial resources dedicated to the cause and issues. It is a permanent, everlasting organization or business unit. It can be a nonprofit, and/or a function deeply integrated with a for-profit business organization. It can be operating inside the four-walls of for-profit companies, developing and leading nonprofit projects, foundations. It can have multi-million dollar budgets, perhaps multi-billion dollar budgets. It can be can be huge in scope working local and/or global. Many times, it will have one or more subordinate associations under its general supervision or control in the form of divisions, business units, foundations, and charitable trusts. It is have fully established business management practices and standards and be fully registered with IRS as a nonprofit tax-exempt status.

Examples:
Howard Hughes Medical Institute
United Nations Small and Medium Enterprise (SME) programs
Bill & Melinda Gates Foundation
Ben & Jerry’s Foundation
Target Community
Merck & Co. Donating Mectizan to prevent river blindness
Pew Internet & American Life Project
General Electric Appliances for the Disabled
Honda Worldwide: Next Generation Environmental Technologies
Green Toe shoes from Simple Shoes

Subordinate Organization
A subordinate organization is a chapter local, post or unit of a central organization discussed above. It is long-term, and most likely some kind of operational activities year-round. It is strictly a not-for-profit organization, may or may not be incorporated, but it must have an organizing document. It can be large in support to its community, and/or members, and quite often has large financial resources committed. It can be very focused on a few particular niche causes and issues. Most likely it using some business management practices. It will have a limited number of paid-employees, most often have non-paid volunteers. It is fully registered with IRS as a nonprofit status, probably under the central organization’s charter and affiliation.

Examples:
AMGEN’s bike ride for Arthritis in California
Care For Animals, by the American Veterinary Medical Association
American Electronics Association of Texas
Cattle Barons Ball, supports American Cancer Society of Columbus
Surfrider Chapter of Oahu
Juvenile Diabetes Research Foundation walk in North Carolina
Lemon Link, connecting a public school to Internet
Volunteering for the Arboretum Foundation in Seattle
National Latina Business Women Association, Los Angeles
MIT Enterprise Forum of Atlanta

Independent Organization
An independent organization solves societal problems through a project-by-project activity. It is a group of two or more individuals meeting for a common cause. An independent organization often works only locally, within its own community, for limited events, project, and social cause programs. Most often it focuses on one social cause or issue at a time. Most likely this organization is not using many formal business management practices. There is a low dedication of assets, and most likely it is not qualified with the IRS as a tax-exempt organization. No plans to elect permanent officers or even get established as n ongoing organization. An exception would be an individual social entrepreneur sitting on the board of a nonprofit organization discussed above, bringing formal business management practices to that organization. Or, they can be working alone within other organizations, creating an invention that changes the world.

Examples:
Boston Black Student Network
ModestNeeds.Org
Kirkuk Business Center in Iraq
South Pacific Business Development Foundation (SPBD) in Samoa
Foundation for Immigrant Resources and Education (FIRE), St. Paul
Somme Prairie Grove Preserve self-guided tours
Colorado Therapeutic Riding Center
I Have A Dream, Houston for inner-city kids
Society of Women Engineers at UCSD
Court Appointed Housing Specialists, Philadelphia

Case Study: Inventing the World Wide Web
The Web is not a “physical” thing that exists in a certain “place.” It is a “space” in which information exists. J. Neil Weintraut called it “the Rosetta stone of the Internet for the masses.” In Robert Reid’s Architects of the Web, Weintraut says, “The Internet was a massive library of some of the most advanced information and discussion forums in the world from leading research institutions, but locating and getting the information was obtrusively difficult. It was akin to walking down each aisle of a library, scanning each book just to figure out what is there, but doing all this in the dark!”

In 1989 Tim Berners-Lee sat down in the European Particle Physics Laboratory (CERN) in Geneva to invent the World Wide Web. When Berners-Lee started working on his Web project, there were about 800 different computer networks plugged into the Internet and about 160,000 computers filled with information. He invented a “Web client that allows a human to read information on the Web.” It solved incompatibility among all the different servers, computing systems, and infrastructures.

Tim Berners-Lee’s invention of the Web browser has forever changed the shape of modern life, altering the way people do business, entertain, and inform themselves. His invention is often compared to Gutenberg’s printing press, Bell’s telephone, and Marconi’s radio. Time magazine hailed him as one of the 100 greatest minds of the twentieth century, saying, “He took a powerful communications system that only the elite could use and turned it into a mass medium.” More than 375 million queries are made each day on the Internet. Google alone responds to more than 200 million search queries per day in 74 languages from 100 different countries. Tim Berners-Lee chose not to profit from his invention. In April 1993 CERN declared that they would not charge a royalty on the Web protocol and code created by Berners-Lee. It was his gift to the world.

SOURCE: Roadmap To Entrepreneurial Success