Social Entrepreneurship

TiE Young Entrepreneurs

Raj Melville

January 10, 2009

Agenda

What is Social Entrepreneurship? Social Challenges and Solutions Examples of Social Entrepreneurs

Grameen Aravind Eye Clinics Agastya

Getting Started Resources

Key Ingredients of a Social Entrepreneur

=+

Social Activist Business pioneer

Social Entrepreneur

What Is Social Entrepreneurship ?

Business entrepreneurs change the face of business

Social entrepreneurs play the role of change agents in the social sector

Social entrepreneurs create sustainable solutions that change society for the better

Business and Social Entrepreneurs Share Common Traits

Strategic thinkers: Like business entrepreneurs, social entrepreneurs act upon what others miss

Mission driven: Work hard to generate value Focused: Both entrepreneurs are intensely focused and

hard-driving in their pursuit of a social vision Resourceful: They are skilled at mobilizing and

motivating resources Results oriented: Driven to produce tangible results Challenge Seekers: Tackle major issues, opportunities

or challenges Perseverance: Continue efforts despite obstacles

What sets Social Entrepreneurs Apart?

Social Entrepreneurs are innovative, resourceful, and results oriented addressing the root cause of a social issue

As leaders, social entrepreneurs draw upon the best thinking in the business, nonprofit, and public policy worlds to develop strategies that maximize their social and economic impact

"Social entrepreneurs are not content just to give a fish or teach how to fish. They will not rest until they have revolutionized the fishing industry." Bill Drayton, CEO, chair and founder of Ashoka Foundation

Social Entrepreneurship

Governmental Organizations

For Profit Businesses

Non-Profits

SocialEntrepreneurs

The Non-profit Sector

Total US Non Profit Organizations (2006): 1,478,194 904,313 Public Charities

Organizations do not pay federal tax Donations are tax deductible

109,852 Private Foundations Created to distribute money to charities or individuals

About 29 % of Americans over the age of 16 volunteered in 2005 In 2004, public charities reported nearly $1.1 trillion in total

revenues (Source: National Center for Charitable Statistics)

Total charitable giving in the U.S (2007): $306.39 billion, consists of 2.2 % of GDP

(Source: Giving USA Foundation)

What Challenges do Social Entrepreneurs tackle?

Social entrepreneurs typically address areas of unmet social need or social opportunity creation that the public or private sectors have failed to address

Health Water/Sanitation Education Sustainable Infrastructure: Housing, Communications Renewable Energy Environmental Sustainability Food and Nutrition Women’s Issues Sustainable Agriculture & Technology

Also see the UN Millennium Development Goals http://www.un.org/millenniumgoals/

SEs Bring New Approaches to Social Issues New Design Solutions

Process Redesign – Aravind Eye Care (www.aravind.org ) Product Redesign – Jaipur Foot Distribution/Logistics – Saafwater www.saafwater.com Infrastructure/Technology – Grameen Phone

New Business Models Micro-Finance

Grameen Cooperatives

SEWA http://www.sewa.org Muthu Velayutham, Gram Mooligai Co Ltd

http://www.new-ventures.org/arquivos/GramMooligai.pdf Triple Bottom Line

New Funding Models Venture Philanthropy Socially responsible funds.

Calvert Funds Acumen Fund

Creative Leverage models

Examples of Social Entrepreneurs

Grameen Aravind and Aurolab Agastya Water Centric (presenting today)

Additional examples: “How to Change the World” by D. Bornstein “The Fortune at the Bottom of the Pyramid” by C. K.

Prahalad www.Ashoka.org

Grameen

Grameen Bank was started by Prof. Muhammad Yunus in Bangladesh in 1976 (http://www.grameen-info.org/ )

Social goal was to Extend banking facilities to poor men and women who otherwise

would not get bank loans Eliminate the exploitation of the poor by money lenders Create opportunities for self-employment for the large number of

unemployed people in rural Bangladesh Currently Grameen has

7.61 million borrowers, 97 per cent of whom are women 2,535 branches in 83,343 villages Loan recovery rate is 98.24 per cent. 2008 Projected loan disbursement of US $ 874 million For profit concern generating dividends to borrowers who are

shareholders

Grameen

Grameen

What did they do differently? Went after untapped sector

Were willing to take a risk with uncollateralized loans to poor Focused on women entrepreneurs

Introduced new business processes No legal paperwork for loans Created self help groups to ensure repayment thru social

pressure Simplified loan repayments with weekly meetings for incremental

loan payments Created competitive product

Set market rates of interest versus usurious money lender rates

Websites like www.kiva.org and www.microplace.org now allow individuals to help entrepreneurs in developing countries

Aravind Eye Hospital

Founded in 1976 by Dr. G. Venkataswamy, in Madurai, India (http://www.aravind.org/ )

A social organization committed to the goal of elimination of needless blindness through comprehensive eye care services.

Every year the Aravind Eye Care System Sees over 2.4 million patients Does over 200,000 cataract operations, nearly half of them free Average cost at one hundredth of that in the US. Doctors conduct over 2000 operations a year, over 6 times the national

average Aurolab, a manufacturing spinoff, makes interocular lenses to

world class standards at tenth of international cost ($4-5 versus $100 -$150)

Aravind Eye Hospital

What did they do differently? Focused on the social objective

"But Aurolab sells the lenses for less, not only because their costs are lower but because they chose to price them lower – because our goal is maximizing service rather than maximizing profit."

Streamlined the entire operation process Setup as a production line Increased the utilization of doctors and equipment

Built new multi-tiered pricing models Cross subsidized free patients with higher charges for those

who could pay

Agastya Founded in 1999 by Ramji Raghavan in Bangalore, India

(http://www.agastya.org/ ) Non-profit focused on transforming education in India through a scalable

and interactive education model India, one of the most populous countries, has over 35% illiteracy rate Rural schools are poorly staffed with teachers with inadequate training

Created a science training center with distributed centers in each rural district Developed a new style of interactive teaching Agastya Mobile Labs take science education out remote schools Mobile Labs reach over 800 rural teachers and 40,000 students a year Over 30 Agastya Mobile Labs make it largest science outreach program in the

world Results show passing rates at Agastya schools up from 40% to 96%. Having touched over 80,000 teachers and 2.5 million children, Prime Minister’s National Knowledge Commission has recommended the

‘Agastya model’ for nationwide dissemination

Agastya

Agastya

What did they do differently? Disruptive business model

Developed a unique teaching model Break the typical mold of teacher/student interaction

Redesigned the supply chain Took classes out to the student

Matched resources to talent available High school students as capable instructors Scales reasonably well

Engage the ‘customer’ i.e. student Created a product that satisfied both student and teacher’s

needs

Getting Started

Social entrepreneurs play the role of change agents in the social sector, by: Adopting a mission to create and

sustain social value (not just private value)

Recognizing and relentlessly pursuing new opportunities to serve that mission

Engaging in a process of continuous innovation, adaptation, and learning

Acting boldly without being limited by resources currently in hand

Exhibiting heightened accountability to the constituencies served and for the outcomes created(Source: The Meaning of Social Entrepreneurship, J.

Gregory Dees)

1. Define a clear vision around a social issue or challenge

2. Identify market opportunity and define innovative or disruptive solutions

3. Build a sustainable business model

4. Clearly define social impact metrics

5. Recruit and attract resources and volunteers

Funding

Sources of funds Family and Friends Competitions Fundraising events Foundations and Grants Social Investors

Resources

Funding Sources Saffron Circle: http://www.saffroncircle.org/ Echoing Green: http://www.echoinggreen.org/ Ashoka: http://www.ashoka.org/ Acumen Fund: http://www.acumenfund.org/ Agora Partnerships: http://www.agorapartnerships.org/ New Profit: http://www.newprofit.org/ Draper Richards Foundation: http://www.draperrichards.org/ Social Innovation Forum: http://socialinnovationforum.org/ MIT IDEAS Competition: http://web.mit.edu/ideas Changemakers: http://www.changemakers.net/ Ashoka’s Youth Venture: http://www.genv.net/ University Network: http://www.universitynetwork.org

Resources

Sites about Social Entrepreneurship and Social Innovation Ashoka’s Website for Social Innovation: http://

www.changemakers.net/ PBS Series on Social Entrepreneurs: http://

www.pbs.org/opb/thenewheroes/ The Skoll Foundation: http://www.skollfoundation.org/ The Schwab Foundation: http://www.schwabfound.org/sf/index.htm Draper Richards Foundation: http://www.draperrichards.org/ Duke University: http://www.caseatduke.org/ Columbia University: http://www4.gsb.columbia.edu/socialenterprise/ Harvard University: http://www.hbs.edu/socialenterprise/ Stanford University: http://www.gsb.stanford.edu/csi/ Bill & Melinda Gates Foundation: http://

www.gatesfoundation.org/default.htm Clinton Foundation: http://www.clintonfoundation.org/index.htm Google.org: http://www.google.org/

Resources

Search for Volunteer opportunities or post openings Volunteer Match: http://www.volunteermatch.org./ Network for Good: http://www.networkforgood.org/ Idealist.org: http://www.idealist.org/

Charity and Foundation Evaluation/Search sites Guidestar: www.Guidestar.org Charity Navigator: http://www.charitynavigator.org/ Global Giving: http://www.globalgiving.com/

Further Reading

How to Change the World: Social Entrepreneurs and the Power of New Ideas, Updated Edition by David Bornstein

The Fortune at the Bottom of the Pyramid by C. K. Prahalad Creating a World Without Poverty: Social Business and the Future of

Capitalism by Muhammad Yunus

Business Planning for Enduring Social Impact: A Social-Entrepreneurial Approach to Solving Social Problems, Andrew Wolk & Kelley Kreitz

Capitalism at the Crossroads: Aligning Business, Earth, and Humanity by Stuart L. Hart

The End of Poverty: Economic Possibilities for Our Time by Jeffrey D. Sachs

Banker To The Poor: Micro-Lending and the Battle Against World Poverty by Muhammad Yunus

Leaving Microsoft to Change the World: An Entrepreneur’s Odyssey to Educate the World’s Children by John Wood

Three Cups of Tea: One Man’s Mission to Promote Peace . . . One School at a Time by Greg Mortenson & David Oliver Relin

Questions?

Contact me Raj Melville

Email: rajmelville@gmail.com Blog: http://socialecosystem.wordpress.com/

Social Entrepreneurs

Unlike traditional business entrepreneurs, social entrepreneurs primarily seek to generate "social value" rather than profits. And unlike the majority of non-profit organizations, their work is targeted not only towards immediate, small-scale effects, but sweeping, long-term change.

http://www.pbs.org/opb/thenewheroes/whatis/index.html