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This introductory class provides an overview of social enterprise and social entrepreneurship, and some of the key tensions that social entrepreneurs encounter.Theory: What is social entrepreneurship? What distinguishes social entrepreneurship from traditional entrepreneurship?Practice: What is social enterprise? How is it different from social entrepreneurship? How does it differ from traditional business?http://www.socialentrepreneurship.ca/indev308
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INDEV 308: Introduction to Social Entrepreneurship
Class 1: Introduction to Social Entrepreneurship and Social Enterprise
Monday, May 2, 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 enterprise
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© Norm Tasevski & Karim Harji
Course Director – Norm Tasevski
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Course Director – Karim Harji
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TA – Jespal Panesar
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What Makes YOU a (Social) Entrepreneur???
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Agenda
• Class Intros • Syllabus and Class Structure • Ground Rules • Defining Social Entrepreneurship • Defining Social Enterprise • What did we learn? • Next week
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INDEV 308: Syllabus
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Class Rules
– Participation - quality, not quantity!
– No stupid questions (only stupid answers)
– Respect your classmates – attend and be punctual!
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Defining Social Entrepreneurship…
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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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How is Social Entrepreneurship Different?
Motivation Resourcefulness Risk Taking Innovation
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But…
…motivations are different
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Barefoot College
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But…
…innovation is different
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Registered Disability Savings Program
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But…
…resourcefulness is different
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“Civic Engagement, Scaled Up”
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But…
…risk taking is different
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“Banking for the Poor”
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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 traditionally
unprofitable pursuits:
“(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 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.” 27
© 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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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)
• Key distinguishing factor: How deep social & business purpose is imbedded
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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
A product/service
A goal A legal form
Yeah, but…�
This one’s complicated�
Absolutely�
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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 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”
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TurnAround Couriers
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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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A Common Dilemma
• Usual: Social enterprises feel they need to sacrifice social purpose for financial gain, or vice versa
• Ideal: Financial returns depend on social mission (and vice versa)
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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 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”
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Emphasis on Social Return Conventional
Nonprofit
Nonprofit with some earned
income
Social Enterprise
Business with social
responsibility
Conventional Business
Emphasis on Financial Return
Nonprofit Structure
For-profit Structure
Philanthropic Capital
Commercial Capital
Source: Stanford Social Innovation Review, Spring 2008; Jed Emerson cited as contributor
Spectrum of Social and Financial Returns
© Norm Tasevski & Karim Harji
A test…
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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 – Desire to be supplied 100% by
renewable energy by 2015
Social Enterprise or Not?
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
© Norm Tasevski & Karim Harji
A test…
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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
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
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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 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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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)
• “… 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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What did we learn?
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Next Week
• Complete Survey Monkey – guaranteed participation grade!
• 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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