5. Opportunities for Social Entrepreneurship

League of African Entrepreneurs- Africa University

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Opportunities for Social Entrepreneurship

What is Social Entrepreneurship?


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What is Social Entrepreneurship? Social entrepreneurship has become a global

movement- a movement with a goal to effect positive change.

On the surface we know social entrepreneurship is a good thing but it is a complicated phenomenon difficult to define.

Social entrepreneurship in in theory and in practice does not have a unifying , agreed-upon definition.

Some of the most popular definitions are outlined below and the share a common theme: their method and execution are entrepreneurial in thinking and action; while their mission and purpose are driven by a social need and benefit.

Social entrepreneurship encompasses for profit and nonprofit ventures.

It is the use of using principles of entrepreneurship to create economically sustainable social value.


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Definitions of Social Entrepreneurship According to Greg Dees (1998) social entrepreneurs

play the role of change agents in the social sector by:

a. Adopting a mission to create and sustain social value (not just private value)

b. Recognizing and relentlessly pursuing new opportunities to serve that mission

c. Engaging in the process of continuous innovation, adaptation and learning

d. Acting boldly without being limited by resources currently in hand and

e. Exhibiting heightened accountability to the constituencies served and for the outcomes created.


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Johanna Mair and Ignasi Marti (2006) define social entrepreneurship as a process involving the innovative use and combination of resources to pursue opportunities to catalyze social change and/or address social needs.

James Austin, et al (2006) define it as an innovative, social value-creating activity thay can occur within or across the non-profit business or government sector.

Jeffty Robinson (2006) defines it as a process that includes the identification of a specific social problem and a specific solution to address it; the evaluation of the social impact , the business model and the sustainability of the venture and the creation of a social mission oriented fo-profit or a business oriented no-profit entity that pursues double or triple bottom line.

The Schwab Foundation defines- social entrepreneurship as :1. About applying practical innovative and sustainable approaches

to benefit society in general with an emphasis on those that are marginalized and poor

2. A term that captures a unique approach to economic and social problems – an approach that cuts across sectors and disciplines

3. Grounded in certain value and processes that are common to each social entrepreneur.


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Types of Social EntrepreneurshipThe primary difference between social

entrepreneurship and traditional entrepreneurship is the intended mission.

Social entrepreneurs develop ventures with a mission to solve a pressing social problem- problems related to people and problems related to the planet

Social problems are most typically associated with such sectors as health care, education, poverty, the environment, waste, water and energy.

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Types of Social Entrepreneurship1. Social Purpose venture- these are founded on the premise

that a social problem will be solved yet the venture is for profit and the impact on the market is typically seen as economic

Social ventures like this are mission-driven and economically sustainable.

2. Enterprising Non-profits- there are two types of enterprising non-profits.

The first type utilizes earned-income activities, a form of venturing, to generate all or a portion of total revenue to sustain their mission driven organizations.

The second type has a focus on growth and economic sustainability and usually incorporate outside investment in the form of venture philanthropy, to significantly scale the organisation for better impact towards systemic social change.

Just as a social venture may receive value-added venture capital or angel investment, an enterprising non-profit may receive venture philanthropy funding which is different which is different from grant funding or donations.

Venture philanthropy is a blend of financial assistance with a high level of professional engagement by the funder.

Whereas social ventures may distribute their profits to owners, enterprising non-profits by law may not.

3. Hybrid Models of Social Entrepreneurship- these are dual purpose organizations with missions that equally emphasize economic and social goals.

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Wicked Problems and Opportunity SpacesOpportunities in the social sectors, including

environmental issues, are driven by large, complex problems. Social problems are sometimes called wicked problems.

An examination of the characteristics of wicked problems reveals considerable challenges facing social entrepreneurs.

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Millennium Development GoalsThe millennium development goals form

the world ‘s most pressing social problems and creates the opportunity spaces for social entrepreneurs.

THE MILLENIUM DEVELOPMENT GOALS

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Themes and Targets

The Millennium Development Goals•In September 2009, the 189 member countries of the United Nations adopted eight MDGs,

committing themselves to making substantial progress toward the eradication of poverty and

achieving other human development goals by 2015.

•The MDGs are the strongest statement yet of the international commitment to ending poverty.

•They acknowledge the multidimensional nature of development and poverty alleviation and to

put an end to poverty requires more than just increasing incomes to the poor.

•These goals have become central to the way governments, international development

agencies and NGOs carry out their development efforts.

•The MDGs were developed in consultation with developing countries to ensure that they

addressed most of their most pressing problems.

•In addition key international agencies including UN, the World Bank, the IMF, the

Organization for Economic Cooperation and development (OECD) and the World Trade

Organization (WTO) all helped t develop the Millennium Declaration and so have a collective

policy commitment to attaching poverty directly.

•The MDGs assign specific responsibilities to rich countries, including increased aid, removal

of trade and investment barriers and eliminating unsustainable debts of the poorest nations.


Millennium Development Goals: Themes and Targets

1. Eradicate extreme poverty and hunger◦ Target for 2015: ◦ Half the proportion of people living on less than

$1 per day and those who suffer from hunger

2. Achieve universal primary education◦ Target for 2015: ◦ Ensure that all boys and girls complete primary

school



3. Promote gender equality and empower women

Target for 2005: Eliminate gender disparities in primary and secondary

education (preferred)Target for 2015: Eliminate gender disparities at all levels

4. Reduce child mortalityTarget for 2015: Reduce by 2/3 the mortality among children under five



5. Improve maternal healthTarget for 2015:

Reduce by 2/3 the ratio of women dying in childbirth

6. Combat HIV/AIDS, malaria and other diseases

Target for 2015: Halt and begin to reverse the spread of

HIV/AIDS and the incidence of malaria and other major diseases



7. Ensure environmental sustainability

General target: Integrate the principles of sustainable development

into country policies and programs and reverse the loss of environmental resources.

Target for 2015: Reduce by half the proportion of people without

access to safe drinking waterTarget for 2020:

Achieve significant improvement in the lives of at least 100 million slum dwellers



8. Develop a global partnership for developmentTargets:

Develop further an open trading and financial system that includes a commitment to good governance, development and poverty reduction,

nationally and internationally.Address the least developed countries’ special needs and special

needs of landlocked and small-island developing countries

Deal comprehensively with developing countries’ debt problems Develop decent and productive work for the youthIn cooperation with pharmaceutical companies, provide access

to affordable essential drugs in developing countries.In cooperation with the private sector make available the

benefits of new technologies-especially information and communications technologies

Source: United Nations Development Program (UNDP), http:/www.undp.org/mdg



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Resources For Social Ventures Two sources of capital have emerged for social

entrepreneurs:1. Social venture capital (SVC)- seeks to invest in non-

profit ventures not only for financial return but also for social and environmental return- this is also known as the double bottom line or triple bottom line.

Within the social venture capital territory are 3 types of funds:

a. Focused fund- invests solely in clean technology businesses related to energy, transportation and manufacturing. Others focus in one of four areas of concern: education, health care, energy and the environment.

b. Community Fund- its purpose is typically economic development and job creation in impoverished areas.

c. VC with Conscience – these funds stipulate that a certain % will be invested in in socially responsible businesses related to their target investment areas.


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Resources For Social Ventures2. Venture Philanthropy It provides value-added funding for non-

profit organizations to increase their potential for social impact

The origin of venture philanthropy is attributed to John D Rockefeller III in 1929 when he spoke before Congress in support of tax reform.

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5. Opportunities for Social Entrepreneurship