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Social Entrepreneurship Defined

By Nell Edgington



Because social innovation is such a new field, terms are still being defined. At times terms are used interchangeably when in reality they have very different meanings. Academics and thought leaders are still hammering out final definitions, but in the interim a common language is beginning to emerge. In an on-going series, I’d like to explain and expand on different terms within the social innovation space. Today I will start with Social Entrepreneurship.

In their ground-breaking 2007 article, “Social Entrepreneurship: The Case for Definition,” two leaders in the field, Roger L. Martin & Sally Osberg, define social entrepreneurs as having three necessary components:

(1) identifying a stable but inherently unjust equilibrium that causes the exclusion, marginalization, or suffering of a segment of humanity that lacks the financial means or political clout to achieve any transformative benefit on its own; (2) identifying an opportunity in this unjust equilibrium, developing a social value proposition, and bringing to bear inspiration, creativity, direct action, courage, and fortitude, thereby challenging the stable state’s hegemony; and (3) forging a new, stable equilibrium that releases trapped potential or alleviates the suffering of the targeted group, and through imitation and the creation of a stable ecosystem around the new equilibrium ensuring a better future for the targeted group and even society at large.

Social entrepreneurship is also defined by what it is not.  Martin and Osberg see two types of organizations that are not social entrepreneurial.  The first is a “social service provision” organization where

a courageous and committed individual identifies an unfortunate stable equilibrium – AIDS orphans in Africa, for example – and sets up a program to address it – for example, a school for the children to ensure that they are cared for and educated. The new school would certainly help the children it serves and may very well enable some of them to break free from poverty and transform their lives. But unless it is designed to achieve large scale or is so compelling as to launch legions of imitators and replicators, it is not likely to lead to a new superior equilibrium. These types of social service ventures never break out of their limited frame: their impact remains constrained, their service area stays confined to a local population, and their scope is determined by whatever resources they are able to attract.

The second type of organization that is not social entrepreneurial is “social activist organizations.”  These are different from social entrepreneurial organizations because

instead of taking direct action, as the social entrepreneur would, the social activist attempts to create change through indirect action, by influencing others – governments, NGOs, consumers, workers…to take action. Social activists may or may not create ventures or organizations to advance the changes they seek. Successful activism can yield substantial improvements to existing systems and even result in a new equilibrium, but the strategic nature of the action is distinct in its emphasis on influence rather than on direct action.

Thus, a social entrepreneur is someone who creates and scales a new solution to a social problem. In his book How to Change the World: Social Entrepreneurs and the Power of New Ideas, David Bornstein defines a social entrepreneur as:

[an] obsessive individual who sees a problem and envisions a new solution, who takes the initiative to act on that vision, who gathers resources and builds organizations to protect and market that vision, who provides the energy and sustained focus to overcome the inevitable resistance, and who-decade after decade- keeps improving, strengthening, and broadening that vision until what was once a marginal idea has become a new norm.

Take Teach for America for example. Wendy Kopp recognized that the old model of teacher recruitment was not working in low-income schools. They had tremendous teacher shortages, many of the teachers who stayed were demoralized, and the end result was tremendous inequalities in education. She estimated that 13 million children growing up in America suffered from educational disparities.  Wendy came up with the idea to take recent college graduates who have the energy and mobility of youth and place them in these poor schools for two years. The results were dramatic. Kids became more engaged, stayed in school, and improved their test scores. Wendy then built on that model and raised growth capital to expand the program to other school districts.

At inception in 1990 they had 500 teachers in 6 communities.  18 years later they have 6,000 current teachers in 29 communities, count 14,000 teachers among their alumni, and have impacted 3 million students.  Teach for America is a pattern-changing idea that is being implemented and growing to scale throughout the country in order to dramatically improve educational outcomes.  They are currently reaching almost 25% of those in need (3 million of 13 million children) and have aggressive growth plans to eventually reach all students affected by educational disparity.  That is social entrepreneurship.

Absolutely essential to the idea of social entrepreneurship is the idea of scale. A pattern changing idea, by definition, creates a new model. And to do so, it can’t just exist in one school, in one district, in one city. To truly be social entrepreneurship, the new idea must grow to scale, to reach all of those who can benefit from the solution.

A social entrepreneur is part program visionary, part implementer, and part marketer, because to grow the solution to scale it takes buy in and investment from many, many people. The social entrepreneur works tirelessly to convince people to try the solution, to invest in the solution, to grow the solution, to tell others about the solution.

But social entrepreneurs cannot work alone. Yes, marketing and fundraising is critical to their success. But they can’t be expected to do it all. The capital available to social entrepreneurs must grow. And it must be a particular kind of capital–growth capital–large amounts over a limited period of time. Wendy Kopp was able to expand Teach for America with growth capital like the $2,000,000 over 5 years from New Profit, a venture philanthropy fund in Boston.  This capital allows a social entrepreneur to build the infrastructure necessary to create a sustainable, scaled organization.

The end goal of social entrepreneurship is to solve the root cause of a social problem. Not all problems can be solved, and not all problems require this direct action approach.  That is why social service provision and social activist organizations are a necessary part of the sector and critical to the strength of our country.  Social entrepreneurship is not and can never be the answer to all problems.  But it is a fairly exciting approach to some seemingly intractable ones.

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About the Author: Nell Edgington is President of Social Velocity (www.socialvelocity.net), a management consulting firm leading nonprofits to greater social impact and financial sustainability. Social Velocity helps nonprofits grow their programs, bring more money in the door, and use resources more effectively. For more information, check out Social Velocity consulting services and clients.

Wednesday, November 12th, 2008 Innovators, Social Entrepreneurship

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4 Comments to Social Entrepreneurship Defined

[...] Entrepreneurship Defined In Social Innovation on November 13, 2008 at 2:35 pm Social Entrepreneurship Defined | Social Velocity Because social innovation is such a new field, terms are still being defined. At times terms are [...]

How to Scale | Social Velocity
November 24, 2008

[...] and exploring key terms in social innovation, I’d like to take a look at scale.  In an earlier post defining social entrepreneurship, I discussed the key part that scale plays: Absolutely essential to the idea of social [...]

[...] ideas for solving persistent social problems (you can read my post laying out this definition here) Social Enterprise is any business that has a double bottom line, i.e. they exist to make a [...]

Jeff Mowatt
June 24, 2011

Making the distinction between a social entrepreneur, an individual and a social enterprise as an organisation, we were to use the definitions from Kim Alter’s Social Enterprise Typologies in arguing both the case that business could and should have a social objective and for a Center for Social Enterprise as part of an international development initiative.

http://en.for-ua.com/analytics/2007/08/09/110003.html

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