A social entrepreneur is a person who pursues novel applications that have the potential to solve community-based problems. A social entrepreneur is someone who recognizes a social problem and uses entrepreneurial principles to organize, create, and manage a venture to make social change (a social venture).
- 1 Understanding Social Entrepreneurs
- 2 Types of social entrepreneurs
- 3 Social Entrepreneurs Traits
- 4 Social Entrepreneurs Quotes
- 5 Notable Social Entrepreneurs
Understanding Social Entrepreneurs
A social entrepreneur is a person who pursues novel applications that have the potential to solve community-based problems. These individuals are willing to take on the risk and effort to create positive changes in society through their initiatives. Social entrepreneurs may believe that this practice is a way to connect you to your life's purpose, help others find theirs, and make a difference in the world (all while eking out a living).
While most entrepreneurs are motivated by the potential to earn a profit, the profit motive does not prevent the ordinary entrepreneur from having a positive impact on society. In his book The Wealth of Nations, the economist Adam Smith explained, "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest."1 Smith believed that when individuals pursued their own best interests, they would be guided toward decisions that benefited others. The baker, for example, wants to earn a living to support his family. To accomplish this, they produce a product—bread—which feeds and nourishes hundreds of people.2
One example of social entrepreneurship is microfinance institutions. These institutions provide banking services to unemployed or low-income individuals or groups who otherwise would have no other access to financial services. Other examples of social entrepreneurship include educational programs, providing banking services in underserved areas, and helping children orphaned by epidemic disease. All of these efforts are intended to address unmet needs within communities that have been overlooked or not granted access to services, products, or base essentials available in more developed communities.
A social entrepreneur might also seek to address imbalances in such availability, the root causes behind such social problems, or the social stigma associated with being a resident of such communities. The main goal of a social entrepreneur is not to earn a profit. Rather, a social entrepreneur seeks to implement widespread improvements in society. However, a social entrepreneur must still be financially savvy to succeed in his or her cause.
Social entrepreneurship is related to socially responsible investing (SRI) and environmental, social, and governance (ESG) investing. SRI is the practice of investing money in companies and funds that have positive social impacts. SRI has also grown in popularity in recent years. Socially responsible investors will often eschew investments in companies that produce or sell addictive substances (like alcohol, gambling, and tobacco). They may also seek out companies that are engaged in social justice, environmental sustainability, and alternative energy/clean technology efforts.
Socially conscious investors screen potential new investments for environmental, social, and governance (ESG) criteria. This set of standards considers how a company performs as a steward of nature, how it manages relationships with employees, suppliers, customers, and the communities where it operates, and how it treats its company’s leadership, compensates its executives, and approaches audits, internal controls, and shareholder rights.
Social entrepreneurs are individuals with innovative solutions to society’s most pressing social problems. They are ambitious and persistent, tackling major social issues and offering new ideas for wide-scale change.Rather than leaving societal needs to the government or business sectors, social entrepreneurs find what is not working and solve the problem by changing the system, spreading the solution, and persuading entire societies to take new leaps.
Social entrepreneurs often seem to be possessed by their ideas, committing their lives to changing the direction of their field. They are both visionaries and ultimate realists, concerned with the practical implementation of their vision above all else.Each social entrepreneur presents ideas that are user-friendly, understandable, ethical, and engage widespread support in order to maximize the number of local people that will stand up, seize their idea, and implement with it. In other words, every leading social entrepreneur is a mass recruiter of local change makers, role model proving that citizens who channel their passion into action can do almost anything.
Over the past two decades, the citizen sector has discovered what the business sector learned long ago: There is nothing as powerful as a new idea in the hands of a first-class entrepreneur.
When it comes to driving change through social entrepreneurship, there are many definitions. These individuals and companies represent a vast cross-section of what they are trying to accomplish with their businesses. They also differ in terms of their strategies and goals for bringing about social change.
Dr. Joe Johnson is an entrepreneur who has studied the field for over 25 years. He is the founder of Welfont, which has funded and launched over a dozen start-ups. Dr. Johnson has outlined what he considers to be the four most common types of social entrepreneurs.
1. The Community Social Entrepreneur
This entrepreneur seeks to serve the social needs of a community within a small geographical area. These entrepreneurial initiatives could be anything from creating job opportunities for marginalized members to building a community center. Social entrepreneurs on this scale are usually individuals or small organizations. Microfinance loans are one example - offering financial solutions to local people with no access to banking.
These entrepreneurs work directly with members of the community. This means more vested interests and a slower decision process, but it comes with the advantage of long-term solutions. Both community members and local organizations are likely to sustainably carry on with the project even without the entrepreneur's direct involvement.
This is where most people start, as a change in your own community is instantly visible. You can see the results of such social entrepreneurship almost immediately and talk to people you are helping directly. All you need to do to start this type of endeavor is find a local isolated social problem and apply yourself to solving it.
2. The Non-Profit Social Entrepreneur
These entrepreneurs are focused on social, not material gain, meaning they prioritize social well-being over traditional business needs. They reinvest any profits into the business to facilitate the further expansion of services
Non-profit social entrepreneurs are usually companies and organizations that choose to use their power for social good. The story of Goodwill Industries serves as a great example: In 1902, the company started employing poor residents to work with donated goods, reinvesting all profits into job training programs.
These entrepreneurs are usually more likely to meet their stated goals due to readily available funding. However, they are also dependent on its successful generation for social good.
This path is usually taken by more business-savvy entrepreneurs who want to use their skills for creating change. While the results often take longer to manifest, they can take effect on a larger scale. Joining a local non-profit or training program is usually a reliable way to start.
3. The Transformational Social Entrepreneur
These people are focused on creating a business that can meet the social needs that governments and other businesses aren't currently meeting. The transformational category is often what non-profits evolve to with sufficient time and growth. They become larger organizations with rules and regulations - sometimes growing to the point of working with or getting integrated into governmental bodies.
Accelerators like The Social Innovation Warehouse are great examples of this social entrepreneur type. They specifically empower other impact-driven entrepreneurs to create positive change. This then creates a system of interconnected businesses focused on social benefits.
Transformational entrepreneurs have an easier time getting top talent for these efforts. However, they are also bound by a web of rules and regulations that larger organizations have to create.
Such organizations usually recruit and foster talent in-house. If you apply for a job opportunity or volunteer position and show social entrepreneurship skills, they are likely to help you enroll in a mentorship program and facilitate your growth from there.
4. The Global Social Entrepreneur
These entrepreneurs seek to completely change social systems in order to meet major social needs globally. It's often where big companies end up when they realize their social responsibility and begin concentrating on positive change as opposed to just profits. It's also where the largest charity organizations, such as the Bill & Melinda Gates Foundation,stand.
The global need in question can be anything from free access to education to clean water. This is usually a lofty goal that spans continents and links many organizations and interests together. However, the trade-off is in scrutiny - if global social entrepreneurs fail to meet the needs and gather sufficient support, their failure has a bigger impact than those of smaller organizations.
These organizations are usually tied to a particular cause and work with other social entrepreneurs to make it happen. As such, you are more likely to achieve these heights if you connect with other social entrepreneurs and build a global community around solving social issues.
Additionally, there is a growing number of organizations that blend the best for-profit practices with non-profit missions. They fall under all types outlined above, being in different stages of growth and scalability. We suggest finding a cause that works best for you and charting a way forward from there.
Social Entrepreneurs Traits
- an unwavering belief in the innate capacity of all people to contribute meaningfully to economic and social development
- a driving passion to make that happen.
- a practical but innovative stance to a social problem, often using market principles and forces, coupled with dogged determination, that allows them to break away from constraints imposed by ideology or field of discipline, and pushes them to take risks that others wouldn't dare.
- a zeal to measure and monitor their impact. Entrepreneurs have high standards, particularly in relation to their own organization’s efforts and in response to the communities with which they engage. Data, both quantitative and qualitative, are their key tools, guiding continuous feedback and improvement.
- a healthy impatience. Social entrepreneurs don’t do well in bureaucracies. They cannot sit back and wait for change to happen – they are the change drivers.
Social Entrepreneurs Quotes
- “As I feel that, I am young now that's why I can take more risks because creativity takes some courage,and also road to success is not a straight one, although it's a series of continuous learning from failure,and not just about myself, but also impacting others too.” Said Ranjan Mistry
- “Once poverty is gone, we'll need to build museums to display its horrors to future generations. They'll wonder why poverty continued so long in human society - how a few people could live in luxury while billions dwelt in misery, deprivation and despair.” Said, Prof. Muhammad Yunus