A Primer on Social Entrepreneurship

What if you could train disabled persons, formerly-trafficked women, and other underserved groups in Cambodia to take on one of the most important and intellectually intensive roles in modern global business?

That was the question Jeremy Hockenstein asked himself when he founded Digital Divide Data, a nonprofit social venture that teaches computer skills to individuals from underserved Cambodian communities and employs them to digitize volumes of hard-copy information from companies around the world. Since 2001, the company has provided its services while its employees receive not only fair wages and benefits, but access to scholarships and career development opportunities.

The ability to identify and seize opportunities has long been the key trait of economic entrepreneurs, but for the last few years, there has been an ever-growing buzz around a new class of change agents referred to as "social entrepreneurs," entrepreneurs who use market opportunities and innovative strategies to create social benefit. The members of this group are recognized as descendents of people like Florence Nightengale, and more recently, Muhammad Yunus, each of whom founded social organizations that fundamentally altered the way we practice and think about social change.

Defining a Nascent Field

For all the buzz around social entrepreneurship, it's still a nascent field without a single commonly accepted definition of what exactly a "social entrepreneur" is. Indeed, one of the main debates in the field is just what type of organizations and individuals the term should encompass!

That said, it's possible to paint a broad outline of the field based on current practices. Organizations driven by social entrepreneurs (often referred to as "social enterprises") tend to draw strategies from both the for-profit and non-profit sectors and often harness specific economic opportunities in their pursuit of social value. They employ earned income strategies to fund their activities, emphasize social impact measurement, and generally focus on achieving "scale," or adapting their model to a variety of contexts. Perhaps most importantly, social entrepreneurs tend to desire not only to meet a specific social need, but change the way those needs are met, in general.

Funders, Foundations, and Firms

The emerging field of social entrepreneurship is being driven in part by the foundations, investment firms, and even cabinet level ministries that are moving capital towards social value creation. Foundations such as Echoing Green, Ashoka, and Draper Richards employ fellowship models to provide early stage funding, mentorship and consultation to promising social startups from around the world. Additionally, wealth from internet technology is increasingly being driven towards social entrepreneurship ventures. Jeff Skoll and Pierre Omidyar, the founders of eBay, both run firms that provide growth capital for promising social entrepreneurs. While the Skoll Foundation focuses on grants for nonprofits, Omidyar and others, such as Google.org, invest in both non-profit and for-profit social enterprises. In the UK, the Cabinet-level Office of the Third Sector maintains a national policy "working across government to create an environment in the UK for social enterprises to thrive."

Of course, at the core of the social entrepreneurship movement are the global innovators finding new ways to fill gaps in issues as diverse as education, health care, and housing. Wendy Kopp saw the desperate need for teachers in American urban centers and founded Teach for America, a two-year fellowship program that places recent graduates from top universities in classrooms, not only meeting the need for teachers but creating a generation of experienced education advocates. Trevor Field and Ronnie Stuiver saw an opportunity to help communities in South Africa get clean water by using children's merry-go-rounds to pump clean borehole water into high-level tanks, each of which is fully funded through billboard advertising. The list goes on, full of innovators who recognized an unjust status quo and, importantly, saw that disequilibrium as an opportunity.

Debates and Tensions

Of course, social entrepreneurship is not without its debates and discontents. Critics such as Michael Edwards have questioned whether "business strategies" are really the answer to the problems of the social sector. They worry that social entrepreneurs' attempts to remedy the "inefficiency" of the nonprofit sector actually ends up harming the messy but vital democratic process of involving stakeholders in decision-making. Some also question the glorification of individual social entrepreneurs as social superheroes with a rare combination of traits and talents. Even Paul Farmer, whose organization Partners in Health is held up as a model of social entrepreneurship, has levied a "loyalist's critique," in which he urged his peers to remember that the tools of business can easily be used to "deny the destitute access to goods and services that sometimes should be rights, not commodities," and that any real social entrepreneurship "movement" must not be a collection of international role models but include the poor themselves.

For all these questions however, social entrepreneurship remains one of the most vibrant and dynamic movements within the social sector and will be at the center of debate and experimentation for the foreseeable future. As dozens of social entrepreneurship competitions and student organizations at college campuses demonstrate, it has already to inspire a new generation of change makers to think differently about their opportunities to create change. At its best, the movement has the potential to be one of the most positive disruptions in the social and business sectors in the beginning of the 21st century.