Understanding social entrepreneurship
The aspiration to do good and make work sustainable is among the significant features of a social enterprise. For the past several years, social enterprise has seen tremendous growth with more and more companies recognizing their value. There are several not-for-profit organizations seeking opportunities to expand their ventures that fulfill their missions besides earning them revenues. A social enterprise is an organization that provides avenues through both aspects. Since nonprofit organizations of not have many sources funding, approaching their business from such a perspective could be most functional.
We can define social entrepreneurship as a process of identifying and acknowledging social problems and creating social change through entrepreneurial principals, processes, and operations. In other words, it is the identification of a particular social issue, then designing, organizing, and managing a social approach to change the situation. Many social problems in the world demand a specific approach to try and resolve. Strategies employed may not solve the completely, but offers a lifetime process with a focus on improving the existing environment. It is not about changing the situation but changing the approach to finding a lasting solution, and this does not eliminate the problem.
Why is it important to study social entrepreneurship?
Entrepreneurship is defined as the process of identifying new ventures and creating a way to gain opportunities therein. It is all about taking up risks in a certain area where others cannot, to make a profit.
In general and common business terms, entrepreneurship means taking the lead to start a new business. It may also mean diversifying an existing business to create more opportunities. Social entrepreneurship, on the other hand, focuses on building social capital. It does not measure how a profile performs or returns on investment. This is a field majorly influenced by non-profit organizations and sectors. Note, however, that social entrepreneurship does not eliminate the possibility of making a profit. To succeed as an entrepreneur, one needs capital to run their businesses, and so do nonprofits if they must bring change in society.
Another vital issue social entrepreneurship seeks to address, apart from social problems, is environmental issues. Organizations that deal with child rights, plants for treatment, and waste product and women empowerment seek to empower the society on the importance of these aspects. They identify issues in a particular societal setting and bring together individuals with similar interests to try resolving the issue.
Social entrepreneurship involves social entrepreneurs. These are individuals who are affiliated with non-profit and non-government organizations. They run fundraisers through community events and activities to invest in people.
Today, several social entrepreneurs have changed society and inspire many others to do so. The founder and manager of Grameen Bank, Muhammad Yunus, is an excellent example of such entrepreneurs. He was awarded a Nobel Peace Prize for his efforts in creating an organization that benefits a large section of society.
Another great example is Rang De, a social enterprise established in 2008 by Ramakshina and Smita Ram. This is an online platform that gives rural and poor urban Indian people access to micro-credits. They offer loans with interest rates of as low as 2 percent annually.
The George Foundation is a well recognized social enterprise. It is a program for empowering women by offering them education, vocational training, cooperative farming, business development, and saving plans. These organizations employ the principles and approaches of social enterprise to impact society.
A social enterprise is a field that has been growing steadily over the past few years. It has attracted the attention of different volunteers, all interested in giving back to society. It allows individuals to do what they have always wanted to do for long. It comprises of extraordinary and innovative people with brilliant ideas to change society in many issues.
Studying social entrepreneurship is vital both in the general business realm as well as social well being. It equips students with skills to change their society as well as use innovative ways to create living for themselves. Many social enterprises, like the ones mentioned above, have played a vital role in shaping society. Anyone can be a social entrepreneur. All you need is some motivation and reason to help others.
The social enterprise spectrum
The social enterprise realm contains three significant sectors, social enterprise, the private sector, and charities. In many states, ‘social enterprise’ is not a legal term. The social enterprise as an entity is founded on a spectrum with organizations interested in undertaking activities that benefit other people. It may or may not benefit themselves, but they are willing to go ahead anyway. Such entities rely on grants on one side and self-financing on the other.
The best way set venture into social entrepreneurship is through the following means:
- Charities and voluntary organizations. These are organizations whose aim is purely to help those in need. They rely on fundraising to raise money for the same.
- Charities with a trading arm. They are the most recognized charities that operate by selling products and services through a shop. They can include a charity shop.
- Social enterprise. Different from the ones mentioned above, social enterprise trades for profit but has a measurable social impact.
- Commercial businesses with a social imperative. These are businesses set to gain profit but founded on strong values.
- Private sector. These are entities that seek profit, with a focus on making money. They trade to maximize the value of stakeholders.
Social entrepreneurship is a wide term used to refer to business processes with a social purpose. In some countries, like Ireland, you cannot register a business legally on this basis. One can use different forms mentioned above to incorporate social enterprises. Generally, however, a social enterprise is described as such if it adopts and meets a set of principles. It must show impact, through a clear mission, it displays finance/profit characteristics, and there is a sense of ownership. These features make such an organization entrepreneurial. Though sometimes them benefits may not be purely monetary, there is always the aspect of finances.
Author: James Hamilton