Social Entrepreneurship

• <S>A social enterprise combines business principles with social good by offering innovative goods and services to address significant societal problems.
• Social entrepreneurship focuses on citizens building or transforming institutions to advance solutions to social problems, aiming to make life better for many by addressing issues like poverty, illness, illiteracy, and corruption
• Social enterprises include both nonprofit and for-profit organizations that aim to deliver a double bottom line – financial and social returns
• Social return on investment refers to the quantifiable social impact of a venture
• Types of social enterprises include nonprofits with income from products/services supplemented by external support, nonprofits with income not supplemented by external support, and for-profit companies generating financial return while creating social outcomes
• To judge the social enterprise track entrants, one must consider traditional business criteria as well as socially specific assessments, such as the integration of social and financial missions and the potential to achieve both goals simultaneously
• Classifying a social enterprise involves characteristics like having a social purpose, engaging in trading activities to achieve social goals, not distributing profits to individuals, and holding assets for community benefit
• Entrepreneurship is the act of building and creating a business enterprise.
• Entrepreneurship is a process of doing something new (CREATIVE) and something different (INNOVATIVE) for the purpose of creating wealth for the individual and adding value to society.
• An entrepreneur is an innovator who creates economic opportunities through the creation or expansion of businesses.
• Traditional Nonprofit Activities is defined as Tax-exempt, mission-related activities that are not commercially motivated
• Traditional Nonprofit Activities' objective is Social return on investment through achievement of mission
• Nonprofit Earned Income is defined as Business activities that generate earned income to support a nonprofit mission
• Nonprofit Earned Income's objective is Financial and social return on investment
• Businesses with Social Outcomes is defined as A for-profit company that pursues financial return and simultaneously generates social outcomes
• Businesses with Social Outcomes' objective is Financial and social return on investment
• Traditional Business Activities is defined as Activities motivated by the primary purpose of returning profits to shareholders
• Traditional Business Activities' objective is Financial return on investment
• Traditional nonprofit activies' example companies are:

  • Mercy Corps
  • American Cancer Society
• Nonprofit Earned Income's example companies are:

  • Greystone Bakery
  • Pioneer Human Services
• Businesses with social outcome's example companies are:

  • Edison Schools
  • Micofinance
  • Solar/green power cos.
• Traditional Business activies' example companies are:

  • General Motors
  • American Express
• Traditional Nonprofit Activities and Nonprofit Earned Income are conducted by Nonprofit Organizations
• Businesses with Social Outcomes and Traditional Business Activities are conducted by For-profit Organizations
•  Social Enterprise Track with mission-focus

  •  Traditional Nonprofit Activities
  • Nonprofit Earned Income
• Social Enterprise Track with profit-focus

  • Businesses with Social Outcomes
  • Traditional Business Activities
• Social enterprises are defined as nonprofit or for-profit business ventures that strive to achieve a quantifiable double bottom line of financial and social returns. These ventures are financially self-sufficient.
• Double Bottom Line:

  • Social return on investment
  • Financial return on investment
• Social return on investment is a quantifiable social impact of the venture.
• Social return on investment is a double Bottom Line with aims for social impact.
• Financial return on investment is a double Bottom Line with aims for profitability.
• Types of Social Enterprises

  1. Nonprofits with income from products/services supplemented by external support and subsidies
  2. Nonprofits with income from products/services not supplemented by external support and subsidies
  3. For-profit company that pursues financial return and simultaneously generates social outcomes
• To judge the social enterprise track entrants, one has to consider traditional business criteria as well as socially specific assessments

  • Traditional Business Criteria
  • Social Enterprise Track Criteria
• Traditional Business Criteria (in line with UH’s current judging criteria)

  • Feasibility of business model in chosen marketplace
  • Marketability of product or service to customer base
  • Potential for financial return
  • Attractiveness for funding from additional investors
  • Management team strength, experience, and readiness
  • Sophisticated understanding of risk and contingency plans
• Social Enterprise Track Criteria

  1. Integration of the venture’s social and financial missions
  2. Is it reasonable to expect that the financial and social goals can be achieved simultaneously? Do these goals make sense together?
  3. Social Return on Investment
  4. How does the enterprise serve a social purpose.
  5. Are socially responsible core values expressed throughout the venture.
  6. What is the venture’s potential to meet its social goals.
  7. What is the social impact both monetized and non-monetized of this enterprise?
• Classifying a Social Enterprise:

  1. Having a social purpose
  2. Engaging in trading activities to achieve social purpose (at least in part)
  3. Not distributing profits to individuals
  4. Holding assets and wealth in trust for community benefit
  5. Democratically involving members of its constituency in governance of organisation
  6. Independent organisation with accountability to defined constituency & wider community
• The phrase: “Six defining characteristics and values of social enterprise” was coined by (Pearce, 2007)