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This introductory class provides an overview of social enterprise and social entrepreneurship, the motivations for wanting to be a social entrepreneur, and some of the key tensions that social entrepreneurs encounter.http://www.socialentrepreneurship.ca/asp1015h
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APS 1015H: Social Entrepreneurship
Class 1: Definitions and Motivations for
Social Entrepreneurship
Wednesday, September 14, 2011
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Instructors:
Norm Tasevski (norm@socialentrepreneurship.ca)
Karim Harji (karim@socialentrepreneurship.ca)
© Norm Tasevski & Karim Harji
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© Norm Tasevski & Karim Harji
Before we begin…
This course is designed for those that want to start a social venture, and/or work in social enterprisesocial venture, and/or work in social enterprise
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© Norm Tasevski & Karim Harji
Course Director – Norm Tasevski
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© Norm Tasevski & Karim Harji
Course Director – Karim Harji
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© Norm Tasevski & Karim Harji
What Makes YOU
a (Social)
Entrepreneur???
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Agenda
• Class Intros
• Syllabus and Class Structure
• Ground Rules
• Defining Social Entrepreneurship
• What motivates the social entrepreneur?
• What did we learn?
• Next week
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Syllabus
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Class Rules
– Participation - quality, not quantity!
– No stupid questions (only stupid answers)
– Respect your classmates –attend and be punctual! attend and be punctual!
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Defining Social Entrepreneurship…
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© Norm Tasevski & Karim Harji
First, we need to understand
entrepreneurship...
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Entrepreneurs…
…are motivated
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Entrepreneurs…
…are innovative
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Entrepreneurs…
…are resourceful
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Entrepreneurs…
…take chances
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How is Social Entrepreneurship
Different?
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Entrepreneurs…
…are motivated …are resourceful …are risk takers…are innovative
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But, for the social entrepreneur…
…motivations are different
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© Norm Tasevski & Karim Harji
And…
…innovation is different
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© Norm Tasevski & Karim Harji
And…
…resourcefulness is different
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And…
…risk taking is different
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An Example – “Civic Engagement, Scaled
Up”
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Other Differences
Focus on “systems thinking” and
“systems change”:
“Social entrepreneurs are not content just to give a fish or
how to teach fish. They will not rest until they have
revolutionized the fishing industry”
Bill Drayton
Seek “profit” in
“(Social entrepreneurs) work in areas where there is partial or
total market failure…what distinguishes them is that they are prepared to strike a very different balance when it comes to
Seek “profit” in traditionally
unprofitable pursuits:
prepared to strike a very different balance when it comes to
creating value for those who would not normally be able to afford it”
John Elkington
Possess a strong “ethical impetus”:
David Bornstein: “Why do you work on the kinds of projects you do? Why don’t
you just want to make a lot of money?”
Fabio Rosa: “I am trying to build a little part of the world in which I would like to
live. A project only makes sense to me when it proves useful to make people happier and the environment more respected, and when it
represents a hope for a better future. This is the soul of my
projects.” 23
© Norm Tasevski & Karim Harji
Some Definitions
• “Social entrepreneurs identify resources where people only see problems. They view the villagers as the solution, not the passive beneficiary. They begin with the assumption of competence and unleash resources in the communities they are serving”
David Bornstein
• “A social entrepreneur is someone who recognizes a social problem and uses entrepreneurial principles to organize, create and manage a venture to make social change”
Wikipedia
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Break
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Defining Social Enterprise…
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© Norm Tasevski & Karim Harji
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© Norm Tasevski & Karim Harji
What is a Social Enterprise?
• Organizations (non-profit or for-profit) that imbed both social purpose and business purpose into their organization
• Returns are both Social (i.e. impact) & Financial (i.e. profit)profit)
• Key distinguishing factor: How deep social & business purpose is imbedded
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© Norm Tasevski & Karim Harji
A Question…
What makes a business a business?
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Components of a Business
A transaction
A product/service
A goal A legal form
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How is Social Enterprise Different?
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Social Enterprise has…
Yep
A transaction
Absolutely
A product/service
A goal A legal form
Yeah, but�
This one’s
complicated
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© Norm Tasevski & Karim Harji
The SE Product/Service
It’s still…
But…
• “Social benefit” is added somewhere on the value chain
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What is Social Benefit?
• For our purposes, social benefit may arise when one attempts to overcome an injustice or inequity in society that the market, on its own, cannot respond to
– E.g. creating employment opportunities for individuals that may not otherwise be employable in the marketplaceemployable in the marketplace
• A similar concept – “environmental benefit”
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Exercise
• Add social benefit to:
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The SE Transaction
Traditional Business Social Enterprise
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Customers
Customers
“Clients”
© Norm Tasevski & Karim Harji
The SE Goal - Social vs. Financial Purpose
Social Purpose
– Creating a “social return” by making positive change within an inequitable social system
• Examples: Reduced Poverty, Improved Literacy
Financial Purpose
– Creating a “financial return”, usually through the sale of products/services in the marketplace
Blended Purpose
– Effecting social change by combining social and financial return
– Also called “Blended Value”
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Viewing SE Through a “business lens”
• How you think about cost– Additional costs borne on business that achieves a social
benefit (how do you incorporate? Valuate it?)
• How you think about investment– Opportunities to get investment through traditional models,
but because your business is hybrid, the investment needs to be hybrid (i.e. layering of different financing to be hybrid (i.e. layering of different financing mechanisms)
• How you think about success– Part of the social enterprise motivation is social, so you
need to consider success in a dual lens. How do you articulate success in both of these spheres?
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The Legal Form
• No clearly defined legal form for social enterprise in Canada
• “Form follows function”
Spectrum of Social and Financial Returns
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Emphasi
s on
Social
Return
Emphasi
s on
Social
Return
Conventi
onal
Nonprofit
Conventi
onal
Nonprofit
Nonprofit
with
some
earned
income
Nonprofit
with
some
earned
income
Social
Enterpris
e
Social
Enterpris
e
Business
with
social
responsi
bility
Business
with
social
responsi
bility
Conventi
onal
Business
Conventi
onal
Business
Emphasi
s on
Financial
Return
Emphasi
s on
Financial
Return
Nonprofit Structure
For-profit Structure
Philanthropic Capital
Commercial Capital
Source: Stanford Social Innovation Review, Spring 2008; Jed Emerson cited as contributor
© Norm Tasevski & Karim Harji
A test…
I am:• A retailer• Sells goods at rates affordable by low-
income individuals• Employs individuals with barriers to
employment• Goals:
– 92% of imported goods from green factories
– 95% of waste redirected from landfill
Facts:
• $115M raised for charity since 1995 ($18M in 2009)
• Over 1,000 environmentally-approved products on sale
• 1700 new jobs created in Canada in 2009
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– 95% of waste redirected from landfill– Desire to be supplied 100% by
renewable energy by 2015
Social Enterprise or Not?
2009
© Norm Tasevski & Karim Harji
A test…
I am:• A café• 84% of all coffee ethically sourced (goal of 100% by
2015)• Supports farmers by a) selling fair trade coffee, and b)
providing loans to coffee growers• Purchase carbon credits to offset production • Goals:
– 100% of cups to be reusable/recyclable– Use recycled/renewable materials in café
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– Use recycled/renewable materials in café construction
– Organize a “month of service” (employees act as “change makers” in their communities)
Social Enterprise or Not?
Facts:
• Sells approx. 10% of all Fair Trade coffee globally
• Almost 200,000 volunteer hours made by employees worldwide
• Over 53,000 youth supported and engaged in community events
© Norm Tasevski & Karim Harji
What does this mean?
Social
Enterprise CSR
Enterprise
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Social
Enterprise Complexity
© Norm Tasevski & Karim Harji
What SE is and is Not
Social Enterprise Is Not… Social Enterprise Is…
• A fundraising strategy (i.e. a “give” mentality)
• A business line (i.e. a “sales” mentality)
• Solely focused on either “customers” or “clients”
• Focused on both “customers” and “clients”
• Dependent on restricted funds for • Sustainable (ideally “self-sufficient”)• Dependent on restricted funds for operations (i.e. not sustainable)
• Sustainable (ideally “self-sufficient”)
• An event or one-off activity (e.g. conferences, bake sales)
• A continuous, market-driven activity
• Providing value to clients only • Providing value to both “clients” and “customers” (and distinguishing between both!)
• Quick • A venture that may take several years to become profitable/sustainable
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© Norm Tasevski & Karim Harji
Some Definitions
• “An organization or venture that achieves its primary social or environmental mission using business methods.”
Social Enterprise Alliance
• “Business ventures operated by non-profits, whether they are societies, charities, or co-operatives.”
Enterprising Non-Profits (enp)Enterprising Non-Profits (enp)
• “… social mission driven organizations which apply market-based strategies to achieve a social purpose. The movement includes both non-profits that use business models to pursue their mission and for-profits whose primary purposes are social.”
Wikipedia
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Motivators for Social Entrepreneurs…
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© Norm Tasevski & Karim Harji
A Question…
What motivates you??
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© Norm Tasevski & Karim Harji
Some Definitions
• Internal and external factors that stimulate desire and energy in people to be continually interested in and committed to a job, role or subject, and to exert persistent effort in attaining a goal. Motivation is the energizer of behaviour and mother of all action. It results from the interactions among conscious and unconscious factors such as the (1) intensity of desire or need, (2) incentive or reward value of the goal, and (3) expectations of the individual and of his or her significant others.”
BusinessDictionary.com
• “Motivation is the activation or energization of goal-orientated behavior. Motivation may be rooted in the basic need to minimize physical pain and maximize pleasure, or it may include specific needs such as eating and resting, or a desired object, hobby, goal, state of being, ideal, or it may be attributed to less-apparent reasons such as altruism, selfishness, morality, or avoiding morality. Conceptually, motivation should not be confused with either volition or optimism. Motivation is related to, but distinct from, emotion.”
Wikipedia
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© Norm Tasevski & Karim HarjiIn response to
why people are
not giving to
the Pakistani
flood in the
same way as
they did for
Haiti, one
woman said:
“It’s a rogue
state, if they
can afford the
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can afford the
nuclear bomb
they can look
after their own”
© Norm Tasevski & Karim Harji
Costin Militaru, an
outreach
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worker$has met
addicts as young as
9 years old. "His
family had no money
for food. He was
hungry and kept
crying, so they fed
him heroin," Militaru
says. "If you're high,
you don't need food.”
© Norm Tasevski & Karim Harji
“On March 24, 1989,
the Exxon Valdez ran
aground in northern
Prince William
Sound, spilling 42
million liters of crude
oil and contaminating
1,990 kilometers of
shoreline. Some
2,000 sea otters,
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2,000 sea otters,
302 harbor
seals and about
250,000
seabirds died in
the days immediately
following the spill.”
© Norm Tasevski & Karim HarjiA total of 32,700
different people
stayed in Toronto's
emergency shelters
in 2005. 4,600 were
children.
Over half a million
Toronto households
live below the
poverty line
1 in 10 homeless
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1 in 10 homeless
report attempted
suicide in 2006
© Norm Tasevski & Karim Harji
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© Norm Tasevski & Karim Harji
So What Motivates The
Social/Environmental Entrepreneur?
“…it was an epiphanal experience…”
Ray Anderson, Interface Carpets
© Norm Tasevski & Karim Harji
So What Motivates The
Social/Environmental Entrepreneur?
“I heard the same story again and again. Someone had
experienced an intense kind of pain that branded
them in some way. They said, ‘I had’ to do this. There was nothing else I could donothing else I could do.”
Jody Jensen, Ashoka
© Norm Tasevski & Karim Harji
So What Motivates The
Social/Environmental Entrepreneur?
“…that made a real impression on me…”
Jeff Skoll, eBay, Skoll Foundation, etc.
© Norm Tasevski & Karim Harji
So What Motivates The
Social/Environmental Entrepreneur?
“I was teaching in one of the universities while the country was
suffering from a severe famine. People were dying of hunger, and I felt very helpless. As an economist, I had no tool felt very helpless. As an economist, I had no tool
in my toolbox to fix that kind of situation.”
Mohammed Yunus, Grameen Bank
© Norm Tasevski & Karim Harji
So What Motivates The
Social/Environmental Entrepreneur?
“…powerful moments of inspiration…”
Jacqueline Novogratz, Acumen Fund
© Norm Tasevski & Karim Harji
What about…
© Norm Tasevski & Karim Harji
What did we learn?
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© Norm Tasevski & Karim Harji
Next Week
• 1st deliverable: – Pick a social/environmental issue (international or
Canadian), and…
– Pick a group of 4 (we will finalize groups next week based on final class numbers)
• Readings
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