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Overview: Social Entrepreneurship

Saving The World Through Business

Overview: Social Entrepreneurship

Katia Arias No Comment

You have probably heard of social entrepreneurship at some point in your career. Probably defined as the “charitable work of some business people” or by its true definition: the type of entrepreneurship that wants to solve the problems of the world using business solutions.

As a social entrepreneur I can’t remember the amount of glares I got when I told people about my career choice. For people it seemed unconceivable to use corporate structures to decrease food insecurity or save our oceans.

But it can be done. With a lot of passion and hard work, businesses that adopt a social/environmental focus can indeed save the world and make profits at the same time. And, through this post, I’ll explain how…

 

Social entrepreneurs don’t usually have a personal agenda

It is rare to hear a social entrepreneur say that his main driver is money. As an SE myself, I know the hustles that go into building a social enterprise, the endless hours and effort you put into creating something that will not necessarily bring a fast ROI and will take some time to prove its effectiveness. It is impossible to stick for long if you’re in it for the money.

Social entrepreneurship is about passion and the genuine desire to create a better world. The social endeavor usually comes from the heart and belongs to those who are serious about sacrificing their own commodities to give others the optimal life they deserve.

 

Here’s a great video from Devex for a broader explanation…

Social enterprises employ social processes

A holistic social enterprise seeks to empower the community and preserve the environment in every step of the way.

Take Trash to Cash, an Indian company launched to help people with disabilities raise their standard of life. Their model includes collecting old flowers from temples (that would otherwise go in the rivers) and getting people with disabilities to transform them into colored powder that is then sold to celebrate the Holi Festival of Colors. On top of that, workers are given extra training to improve on various technical skills.

Looking more closely, this model does not only get money and dumps it into a fund to make a company look good. On the contrary! From the start Trash to Cash prevents water pollution, then it gives disabled communities the opportunity to get an income and live a decent life. And finally, they provide the Indian people with essential products to celebrate their heritage. In every process there is impact!

I invite you to watch this  Walmart video on Madhumita Puri (founder of Trash to Cash) and her advancements for the Child Development program…

Social enterprises are self-sustainable

While traditional CSR programs can tackle social needs, social enterprises exist to tackle these needs sustainably through time. If a company decides that their CSR program no longer works for them, then all the “donation” money will go away and communities are left to wonder.

To avoid that, social enterprises teach people to fish rather than giving them the fish. It creates holistic opportunities where communities take their development in their hands and learn to sustain themselves on their own.

On the financial side of things, social enterprises sustain themselves through their own revenue models. CSR programs, on the other hands, depend on company funds or outside donations.

“Happiness belongs to the self-sufficient” – Aristotle

Social enterprises attract a larger pull of financial contributors

Because social enterprises are self-sustaining and produce financial and social returns on investment, they are eligible for many more types of funding than charities and foundations.

Yes you can still rely on pilot stage funding like crowdfunding and relative/friend donations. But also you can enter business competitions, reach to angel investors and, if your idea is strong enough, you can get some funding from venture capitalists.

To go even further, there are many particular social and environmental investors interested in putting their money to work for good. Social entrepreneurs also may have access to social impact bonds and other financial alliances with organizations and people that wish to contribute to the planet’s development.

The Center of Affordable Water and Sanitation Technology does a great work in explaining “social investing” and why it attracts investors…

Social entrepreneurship opens doors to innovation and disruptive thinking

Social entrepreneurs are disruptive innovators. People who want to change the status quo and challenge the present system to build one that is more just and beneficial for everyone. And they do so by breaking barriers of accessibility, affordability and impact.

Disrupters see opportunities in every market, they are not afraid to take the least traveled road and they prototype often based on customer feedback! This, in turn, leads to incredibly (hard to copy) creative solutions that appeal more to both customers and beneficiaries.

Here’s a video from The Explainer: Harvard Business Review to give you a better idea on the concept…

Social Entrepreneurship is about the triple-bottom line

When you see a social enterprise, you see an organization that values people, planet and profit. To make a decision, social entrepreneurs consider the environment and the community as important members of the board.

Success is not measured only through financial ROI. For social entrepreneurs success is measured also through SROI, which is the social (and environmental) return on investment. Social investors are interested in measure organizational transparency, stakeholder involvement, net impact and of course the effectiveness of the enterprise’s theory of change (how well was the problem solved).

Image Source: CSR Ambassadors

Image Source: CSR Ambassadors

If you really want to help the world and save the planet I encourage you to invest in the present and future social entrepreneurs. Get involved in social enterprises or start your own! Social Entrepreneurship is about earning profits by doing good and creating positive impact using your own business skills! Don’t be afraid and start working for the sustainable change you want to see.

If you found this post useful, please let us know in the comments!

 

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