3 myths about Social Entrepreneurship
Updated: Dec 28, 2020
A social entrepreneur is a person who pursues novel applications that have the potential to solve community-based problems. These individuals are willing to take on the risk and effort to create positive changes in society through their initiative.
What separates a social entrepreneur from an entrepreneur is the difference in motivation.
The motivation for a social entrepreneur is two fold. Firstly, to help the society in tackling different social,cultural and environmental issues and secondly they have to create a business which can earn profits sustainably . If they do not have the first motivation they are regular entrepreneurs.
But this explanation and many others available on the internet confuse several people. As it covers a lot of related topics like impact investing, corporate social responsibility, charities and foundations etc.
Hence this blog aims to clear the confusion around social entrepreneurship and highlight the 3 myths which will help you to have a clear idea about this topic.
Companies which donate and do CSR are social enterprises
The companies which donate a part of their profits are not social enterprises. There main motive is to earn profits and the activities of the main business do not have a social implication. As we see the Tata group does a lot of philanthropic work through its different programs, foundations and charities.
But this does not make them a social enterprise as their main business be it automobile, IT etc. does not have social implications.
This does not mean a profit making company cannot be a social enterprise.
We can take the example of TOMS, the shoe making company. It donates a pair of shoes to underprivileged children on each purchase of pair of shoe from its customers. This is a business model which has direct social impact and generates a profit. Apart from the model, TOMS does a lot of charity work and has a social entrepreneurship fund which promotes the field.
NGOs, foundations, charities are social enterprises
All the charities, not for profits and foundations which are not able to generate income through their social projects are not considered social enterprises.
But when these projects and activities have a sustainable model to support themselves then they will be called social enterprises. Very few can achieve this. The world wide organization Enactus helps a lot of students to learn and practice social entrepreneurship through its wide network and knowledge resources.
Innovation is necessary for social entrepreneurship
Generally social entrepreneurship projects address the root cause of a social problem hence they are successful. But, its scope is not limited to novel solutions. Examples of social entrepreneurship include micro-finance institutions, educational programs, providing banking services in undeserved areas and helping children orphaned by epidemic disease. Their efforts are connected to a notion of addressing unmet needs within communities that have been overlooked or not granted access to services, products, or base essentials available easily in more developed communities.
I hope I was able to convey some more information and also clarify what social entrepreneurship implies in the day-to-day world.
It is a growing field which has the power to the change the lives of millions. There has been varying interest in this field and new startups and businesses are focusing their energies to contribute to this field.
There are still a lot of questions unanswered related to this topic. Will answer some more and explain with more examples in the up coming articles.
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