Question

discuss the relationship an Social enterprise may have with other agencies and services. In other words, who--what populations--does the Social Enterprise engage and serve?

Answer 1

Although social enterprises occupy themselves with the usual business aspects: an appealing product or service, good customer service, ensuring customers return; they can still be regarded as somewhat rebellious in the business milieu. As a social entrepreneur, your market is society and the product you are providing is innovation and transformation within this society. Though social enterprises have a lot in common with standard for-profit business models, maximising financial returns is not the main aim.

Social entrepreneurs are individuals who try to tackle society’s most pressing problems and attempt to drive social innovation in fields such as healthcare, agriculture, education, environment and human rights, using new approaches and products and more rigorous applications of known technologies or strategies. The way they pursue these goals is what makes them distinctive. Similar to a business entrepreneur, a social entrepreneur operates with entrepreneurial determination and business methods to create financially-sustainable organisations that often have an income-generating stream built into the business model. A couple of keywords that are applicable to social entrepreneurs are: Innovation, Sustainability, Reach and Social Impact.

Social enterprises are often confused with Non-Governmental Organisations (NGOs). However, the main difference here is the revenue model. Whereas NGOs rely primarily on charitable contributions and public funding, social enterprises aim to generate enough revenue to sustain themselves financially; they have a steady stream of income, take out loans or grants, search for investors, form partnerships and more.

The business approach is just one among many ways to create social value. Therefore, NGOs and social enterprises complement each other, rather than stand in each other’s way.

• Leveraged non-profit ventures

This is a non-profit type of venture. The entrepreneur engages a cross section of society, including private and public organisations, to realise a particular social innovation. Leveraged non-profit ventures depend on outside philanthropic funding, but since their partners have a vested interest in their continuation, longer-term sustainability is often enhanced.

• Hybrid non-profit ventures

A non-profit type organisation as well, but this model includes some cost-recovery by means of selling goods and services. To be able to sustain their activities, entrepreneurs must mobilise other sources of funding besides public or philanthropic sectors. Grants or loans offer a solution to money shortages. These loans, however, need to be paid back at a certain point.

• Social business ventures

Social business ventures are for-profit entities that provide a social or ecological product or service. Although financial profits are an underlying goal here, accumulating wealth is not the main objective. The focus of the enterprise is to grow as a social venture in order to reach more people in need and positively impact one or multiple sectors of society. Hence, a great deal of the profits is reinvested in the enterprise to fund expansion. The entrepreneur of this type of venture seeks investors who are interested in combining financial and social returns on their investments.

One key area where social entrepreneurship is playing a big role is ensuring people’s access to healthcare. This can be done by setting up new hospitals and affordable health clinics, providing medicine, but also by educating patients, who in turn can help out in understaffed clinics. The social enterprise Mothers2mothers (m2m), for instance, identifies HIV-positive mothers and engages them in in-depth training programmes. This way, they learn how to take care of themselves, and are trained to work alongside doctors and nurses as paid Mentor Mothers. Working as mentors, they support and educate their peers, empowering other mothers to access lifesaving treatment for their babies and themselves.

Another field of work in which social entrepreneurship fares well is education. The emphasis here is not on generating revenue and many organisations in this sphere operate as some sort of non-profit venture. Since access to proper education remains a global problem, many social entrepreneurs set out to tackle this. Decreasing drop-out rates, helping students on their educational pathway, boosting attendance, training teachers, providing course materials or infrastructure; a lot can be done by social ventures to enhance education worldwide.

Faced with overwhelming social and environmental challenges, the world is seeing an ever-increasing number of social enterprises. Even though these enterprises certainly do not make up the majority within the corporate sector, social entrepreneurship is already a field of study in many management courses and some experts even believe the phenomenon is on the verge of hitting a tipping point. A determining factor in this context is Generation Y (millennials), regarded as a more socially-conscious generation, demonstrated by the products they buy and the companies they seek to work for. The field offers them independence, the possibility to experiment and the freedom to integrate their own values in their future career.