I have been searching for a working definition of social entrepreneurship and found one that I like on Neerja Raman’s blog, Digital Provide From Good to Gold. Neerja Raman is a senior fellow at Stanford University where she is developing business and leadership models for social entrepreneurs. She is a former Director of Strategic Planning and Imaging Systems Lab at Hewlett Packard.
Neerja describes social entrepreneurship “as not being philanthropy and not quite business even though it masquerades as both.” She identifies three characteristics of social entrepreneurship:
1. The motivation is social good and the means is business creation.
Foundations, non-government organizations and governments work in the areas of social good. However, they lack the financial metrics required by for-profit businesses. This is not to say that NGOs lack strategy or competency, it just means that they have not built business models that are self-sustainable and provides a financial return.
2. In a social venture, financial returns follow social returns.
Social values in the local marketplace play a role in market creation and expansion. Therefore, each locale is unique and may make the venture more operationally difficult and yield slower financial results. For example, microfinance may work in one area of the world and not another.
3. Successful social entrepreneurs exist but they are not able to scale at any significant rate.
Many social entrepreneurs need an inflow of capital to scale their work. In order to attract this funding though, the entrepreneurs need to prove their concepts are sustainable and the results are achievable. This is an opportunity for funders, private and public to work together. From what I have seen, social entrepreneurs need the traditional investments from foundations to get started, especially for general operating support.
To read about a successful entrepreneurship model, please see the post, Jaipur Foot Factory: Built with Compassion & Technology.
- Dien S Yuen
Photo courtesy of James Jordan
