| What is social entrepreneurship and why is the | | | | few have abandoned dependency on donors and |
| concept so confusing to so many people? When | | | | government subsidies entirely, achieving |
| most people think of business in our capitalistic | | | | self-sufficiency by focusing exclusively on earned |
| society, the choice seems to be between doing well | | | | income from their businesses. |
| or doing good. "Doing good" for social entrepreneurs | | | | There is also confusion about social enterprises by |
| means making a difference by applying original | | | | those who believe that there is no real difference |
| business strategies to further social and | | | | between a social enterprise and a traditional business. |
| environmental goals. Social entrepreneurs build | | | | Traditionally corporate philanthropy took a fairly |
| profitable business models in which doing good is an | | | | thoughtless, perfunctory approach. Executives |
| intrinsic part of the business and not just a | | | | routinely gave corporate grants to their local |
| philanthropic sideline. Social enterprises also have a | | | | nonprofits, to the cultural institutions on whose |
| double bottom line: social impact and financial viability. | | | | boards they sat, and to universities and other |
| Furthermore, social entrepreneurs solve problems in | | | | institutions. At some point, the more enlightened |
| pattern changing ways by merging mission and | | | | companies took care to align their business |
| money. | | | | philanthropy with their strategic goals. Today most |
| Although not a new construct- social | | | | corporations recognize the value of participating in |
| entrepreneurship has been around for over forty | | | | social causes that relate to their overall mission. Some |
| years-the business model driving the concept is still | | | | corporations have even taken social responsibility to |
| evolving. As a consequence of the evolving nature of | | | | a new level. Companies such as Google, for example, |
| social entrepreneurship, there is confusion regarding | | | | have attempted to incorporate social causes into |
| what it is and how it is different from a nonprofit | | | | their missions. Google has created a charitable |
| organization or a traditional business. | | | | arm-Google.org-which has committed over 100 million |
| Nonprofits came into existence because for-profits | | | | dollars in grants and investments to advance social |
| weren't addressing social needs that our free market | | | | causes. Does this make Google a social enterprise? |
| system was failing to adequately address such as | | | | To the extent that Google.org is operated as a |
| pollution, poverty, and illiteracy. These organizations | | | | separate entity, a case could be made that |
| rely primarily on charitable contributions, public funding | | | | Google.org is a social enterprise but the parent |
| and foundation grants to support their programs and | | | | company-Google-is not. |
| cover their administrative overhead. Nonprofits are | | | | Confusion in the news media regarding hybrid efforts |
| often confused with social enterprises. Traditional | | | | such as Google's are understandable but news articles |
| nonprofits and citizen groups have been mainly | | | | or corporate promotion materials occasionally |
| distinguished by their benevolent intent. In contrast, | | | | inaccurately state that a business behaving in a |
| social entrepreneurs stand out by their pragmatic | | | | socially responsible manner is engaging in social |
| emphasis on getting results. The results driving the | | | | entrepreneurship. However, with a traditional business |
| social enterprise are achieved through the revenue | | | | the social cause is not the mission, the mission |
| model. | | | | remains tied to generating wealth for shareholders. In |
| Over the years, nonprofits have increasingly been | | | | contrast, social entrepreneurs confront the major |
| unable to achieve sustainability and achieve their | | | | unmet needs of society through the businesses |
| intended purposes. Consequently social entrepreneurs | | | | themselves rather than grappling with them indirectly |
| have found opportunities to fill the void and create | | | | through socially responsible practices, such as |
| businesses that deliver products and services | | | | corporate philanthropy, equitable wages and the use |
| previously provided by nonprofit groups or | | | | of environmentally friendly raw materials. |
| government agencies and often in a more sustainable | | | | Traditional ways of doing business and operating |
| manner. The current recession has also contributed to | | | | nonprofits have in many ways been inadequate to |
| the financial woes of nonprofits by reducing funding | | | | meet the needs of society. To meet these growing |
| and by simultaneously increasing the societal need of | | | | societal and environmental needs and demands |
| their services. As a result, many nonprofits have seen | | | | nonprofits and social enterprises will continue to |
| financial pressures that have gradually eroded their | | | | evolve to better fulfill their missions. Traditional |
| reserves and forced them to seek new sources of | | | | businesses also seem likely to increase their |
| revenue to finance their programs. While there | | | | contributions to solving social and environmental |
| remains a distrust of the profit motive and capital | | | | problems. Social enterprises will also continue to |
| markets among most nonprofit leaders, some | | | | influence and be influenced by trends affecting |
| nonprofit groups have somewhat changed their | | | | traditional businesses and nonprofits. Finally, due to |
| perception of profit as seen in their attempts to | | | | the magnitude of social and environmental problems it |
| enhance their sustainability by adding business | | | | is reasonable to expect a proliferation of social |
| activities to the traditional hodgepodge of volunteers, | | | | enterprises in the future. |
| charitable donations, and government subsidies. A | | | | |