Social entrepreneurship, at the core, means conducting business for the collective good of all. These people pursue noble causes and have the potential to solve problems that affect the community at large. They often believe that this practice helps connect them to their life’s purpose, helps others find theirs, and makes a difference in this world, all while making a decent living. Another term that one can use for this is altruistic entrepreneurship. If we were to describe the main characteristics of what social entrepreneurship entails, it would be as follows:
- Push to achieve a social change on a large scale
- Focus on working on the social/ecological change they want to bring about while earning money to support that cause
- Since every change-bringing action has its own hindrances, innovate during the process of brainstorming a solution
- Receive feedback to adapt and refine the plan of action
Successful ventures in social entrepreneurship are extremely subjective and depend upon the person conducting the venture. They do not measure success in terms of numbers alone. As long as they have improved the lives of people connected to the cause and made the world a better place by addressing imbalances in such availability, the root causes behind issues, or the social stigma associated with the community’s residents, they are content with themselves. However, these entrepreneurs must be financially savvy enough to succeed in their respective causes. As far as the model is concerned, it is an “earned income” model where the entrepreneur makes money by selling a product, and the company’s customers are informed that their purchase will help the cause stated. It can be anything, from providing scholarships for children’s education or planting trees to protect the environment. However, there are differing opinions on what exactly constitutes social entrepreneurship. Some people believe that the definition only deals with the people who profit and work toward improving a designated issue by selling products to the customers. In contrast, others say that business owners who use governmental grants to address a social issue also fall under the same category.
This form of entrepreneurship is related to socially responsible investing (SRI) and environmental, social, and governance (ESG) investing. The practice of investing money in companies that have positive social impacts is basically what SRI is all about. This has grown in popularity in the last few years. SRIs abstain from companies that produce or sell intoxicants and seek companies engaged in social justice, environmental sustainability, clean technology, and so forth.
As far as ESG is concerned, they have a set of standards that consider how a company functions as a steward for nature, how it manages relationships with consumers, suppliers, employees, and the communities in which it operates, how it treats the company leadership and approaches internal controls, audits, and shareholder rights.
A suitable example of this type of entrepreneurship is microfinance institutions. These provide banking services to the lesser privileged members of society who otherwise would have no other access to financial services. Other examples include helping children orphaned by war or disease, providing banking services to the lesser privileged, and so forth. The one thing common in all these examples is that these efforts are intended to take care of the unmet needs within different communities that have been neglected or have not been provided basic access to essential services or goods.
Here are a few contemporary and lesser-known companies that practice social entrepreneurship:
- Badala.org: This was founded by Joelle McNamara while she was in high school. It is an e-commerce site that creates jobs for African women by selling the products (ranging from jewelry to wooden kitchen utensils) they make.
- Grameen Bank: Founded by Muhammad Yunus, this organization provides micro-loans to help people in need and help them be self-sufficient.
- TOMS: For every shoe purchased from TOMS, the company donated a pair to every needy child. Ever since, they have expanded this concept to tote bags, eyewear, and coffee.
In the modern age, social entrepreneurship is often combined with technological advancements: for example, by bringing high-speed internet connectivity to remote communities so that school-going children have access to research, information, and knowledge. Another way this is expressed is by creating mobile apps that cater to the needs of a particular community. This includes providing means for the community to communicate with the city officials for traffic accidents, downed power lines, or burst water mains. Apps may also be created to report infractions committed by city officials or even law enforcement that can help give a voice to the community through technology.
- A social entrepreneur starts a business for the collective good of society and not just for profits.
- They seek to produce environmentally-friendly products, focus on philanthropic activities, serve lesser privileged communities, and so forth.
- Social entrepreneurship, alongside socially responsible investing (SRI) and environmental, social, and governance (ESG) investing, is a growing trend.
- Nowadays, technology also plays an important part in providing social justice to communities in need.