Tuesday, 13 March 2012 Written by Leah Prinzivalli
Changing the World One Business at a Time
When most people think of entrepreneurship, they might think of Mark Zuckerberg raking in the cash with Facebook’s IPO, or venture capital firms investing millions of dollars in a Silicon Valley startup. One area of entrepreneurship that is not as glamorous but arguably much more important is social entrepreneurship.
Social entrepreneurship is all about starting up a business or organization with the primary goal of making an impact on society. Recognizing the power of an entrepreneur to change lives, social entrepreneurs work proactively with the goal of yes, sustaining a profit, but focus on helping others. PBS & the Skoll Foundation defines the role of social entrepreneurs as “to recognize when a part of a society is stuck and to provide new ways to get it unstuck”.
You might recognize Kiva, the renowned microfinance organization that connects small-dollar loaners to needy borrowers across the globe, and celebrity chef Jaime Oliver’s Fifteen, which trains and employs disadvantaged youth. Although different in many respects, these two initiatives both used a big Idea to confront a core societal issue.
Here are some key ideas related to social entrepreneurship:
Corporate social responsibility (CSR): Corporate giants who participate in corporate social responsibility develop their own foundations, donate to worthy causes, or consider the public sector in daily operations. Google gave away $40M in charitable donations last year and tops most CSR lists. Stretch Island Fruit Co. partners with the Fruit Tree Planting Foundation to plant fruit tree orchards in school yards every spring.
Triple bottom line: Social entrepreneurs aim to widen their reach in three areas - people, planet, profit. People has to do with giving back to the community, planet refers to acting in a manner that is sustainable for the environment, and profit refers to contributing positively to the economy. A company that properly practices the triple bottom line prioritizes the consequences of its actions on society and the overall economy over maximizing pure profit for the company.
Social enterprise: Any organization, either for or non-profit, that uses business methods to achieve social change. Housing Works runs a book store, multiple thrift stores, and community events and devotes the profits to fighting homelessness and AIDS.
Sustainability: The capacity to affect long-term change is a core social entrepreneurship value. Many enterprises focus on environmental sustainability. For example, Seattle Green Limo, recently featured in GOOD Magazine, is an environmentally-friendly transportation company for eco smart travelers.
Microfinance: Microfinance is a small loan provided to a low-income individual or group without access to traditional financial resources. MicroPlace, Acción, Grameen Foundation, and Pro Mujer are well-known organizations that provide loans to needy communities across the world.
Social Intrapreneur: An entrepreneur who happens to work within a larger organization to tackle sustainability and social issues. Especially prevalent in social entrepreneurship as innovators work to challenge existing structures.
Know anyone working on a social entrepreneurship project? Feel free to share ideas in the comments section below.
Leah Prinzivalli currently works in the nonprofit sector and studied social entrepreneurship and politics at NYU. She also has experience working with various social entrepreneurship ventures. Over the next few months, Leah will be highlighting people and organizations who focus on the charitable side of entrepreneurship. Follow her on twitter @leahprinz.