INDEV308 Class 1 - Introduction to Social Entrepreneurship and Social Enterprise

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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

Text of INDEV308 Class 1 - Introduction to Social Entrepreneurship and Social Enterprise

  • 1.INDEV 308: Introduction to SocialEntrepreneurship Class 1: Introduction to SocialEntrepreneurship and Social EnterpriseMonday, May 2, 2011Instructors:Norm Tasevski (norm@socialentrepreneurship.ca)Karim Harji (karim@socialentrepreneurship.ca) 1

2. Norm Tasevski & Karim Harji2 3. Norm Tasevski & Karim HarjiBefore we begin This course is designed for those that want to start asocial venture, and/or work in social enterprise 3 4. Norm Tasevski & Karim HarjiCourse Director Norm Tasevski4 5. Norm Tasevski & Karim HarjiCourse Director Karim Harji5 6. Norm Tasevski & Karim HarjiTA Jespal Panesar6 7. Norm Tasevski & Karim HarjiWhat Makes YOUa (Social)Entrepreneur???7 8. Norm Tasevski & Karim HarjiAgenda Class Intros Syllabus and Class Structure Ground Rules Defining Social Entrepreneurship Defining Social Enterprise What did we learn? Next week8 9. Norm Tasevski & Karim HarjiINDEV 308: Syllabus9 10. Norm Tasevski & Karim HarjiClass Rules Participation - quality, not quantity! No stupid questions (only stupid answers) Respect your classmates attend and be punctual! 10 11. Defining Social Entrepreneurship11 12. Norm Tasevski & Karim HarjiFirst, we need to understandentrepreneurship... 12 13. Norm Tasevski & Karim HarjiEntrepreneursare motivated 13 14. Norm Tasevski & Karim HarjiEntrepreneursare innovative14 15. Norm Tasevski & Karim HarjiEntrepreneursare resourceful 15 16. Norm Tasevski & Karim HarjiEntrepreneurstake chances16 17. How is Social EntrepreneurshipDifferent? 17 18. Norm Tasevski & Karim HarjiHow is Social Entrepreneurship Different?Motivation Innovation Resourcefulness Risk Taking18 19. Norm Tasevski & Karim HarjiButmotivations are different 19 20. Norm Tasevski & Karim HarjiBarefoot College 20 21. Norm Tasevski & Karim HarjiButinnovation is different 21 22. Norm Tasevski & Karim HarjiRegistered Disability Savings Program22 23. Norm Tasevski & Karim HarjiButresourcefulness is different23 24. Norm Tasevski & Karim HarjiCivic Engagement, Scaled Up24 25. Norm Tasevski & Karim HarjiButrisk taking is different25 26. Norm Tasevski & Karim HarjiBanking for the Poor 26 27. Norm Tasevski & Karim Harji Other DifferencesSocial entrepreneurs are not content just to give a fish or Focus on systemshow to teach fish. They will not rest until they havethinking and revolutionized the fishing industrysystems change:Bill Drayton(Social entrepreneurs) work in areas where there is partial or total market failurewhat distinguishes them is that they are prepared Seek profit in traditionallyto strike a very different balance when it comes to creatingunprofitable pursuits: value for those who would not normally be able to afford it John Elkington David Bornstein: Why do you work on the kinds of projects you do? Why dontyou just want to make a lot of money?Possess a strongethical impetus: 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 myprojects. 27 28. Norm Tasevski & Karim HarjiSome 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 servingDavid 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 Wikipedia28 29. Break29 30. Defining Social Enterprise30 31. Norm Tasevski & Karim Harji31 32. Norm Tasevski & Karim HarjiWhat 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 imbedded32 33. Norm Tasevski & Karim HarjiA QuestionWhat makes a business a business?33 34. Norm Tasevski & Karim HarjiComponents of a Business A transaction A product/serviceA goal A legal form 34 35. How is Social Enterprise Different?35 36. Norm Tasevski & Karim HarjiSocial Enterprise has Yep Absolutely A transaction A product/service This ones complicated Yeah, butA goal A legal form 36 37. Norm Tasevski & Karim HarjiThe SE Product/Service Its stillBut Social benefit is added somewhere on the value chain 37 38. Norm Tasevski & Karim HarjiWhat 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 beemployable in the marketplace A similar concept environmental benefit38 39. Norm Tasevski & Karim HarjiExercise Add social benefit to:39 40. Norm Tasevski & Karim HarjiThe SE TransactionTraditional Business Social Enterprise CustomersCustomers Clients 40 41. Norm Tasevski & Karim HarjiTurnAround Couriers41 42. Norm Tasevski & Karim HarjiThe SE Goal - Social vs. Financial PurposeSocial Purpose Creating a social return by making positive changewithin an inequitable social system Examples: Reduced Poverty, Improved LiteracyFinancial Purpose Creating a financial return, usually through the sale ofproducts/services in the marketplaceBlended Purpose Effecting social change by combining social and financialreturn Also called Blended Value42 43. Norm Tasevski & Karim HarjiA Common Dilemma Usual: Social enterprises feel they need tosacrifice social purpose for financial gain, or viceversa Ideal: Financial returns depend on social mission(and vice versa) 43 44. Norm Tasevski & Karim HarjiViewing SE Through a business lens How you think about cost Additional costs borne on business that achieves a socialbenefit (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 needsto be hybrid (i.e. layering of different financingmechanisms) How you think about success Part of the social enterprise motivation is social, so youneed to consider success in a dual lens. How do youarticulate success in both of these spheres?44 45. Norm Tasevski & Karim Harji The Legal Form No clearly defined legal form for social enterprise inCanada Form follows function Spectrum of Social and Financial Returns Nonprofit StructureFor-profit Structure Emphasis onEmphasis onNonprofit withBusiness with ConventionalSocial ConventionalFinancialSocial Returnsome earnedsocialNonprofitEnterprise Business Returnincome responsibilityPhilanthropic CapitalCommercial CapitalSource: Stanford Social Innovation Review, Spring 2008; Jed Emerson cited as contributor 45 46. Norm Tasevski & Karim HarjiA testI am: A retailerFacts: Sells goods at rates affordable by low- $115M raised for charity since 1995income individuals($18M in 2009) Employs individuals with barriers toemployment Over 1,000 environmentally- Goals: approved products on sale 92% of imported goods from green 1700 new jobs created in Canada in factories2009 95% of waste redirected from landfill Desire to be supplied 100% by renewable energy by 2015 Social Enterprise or Not?46 47. Norm Tasevski & Karim HarjiA testI am: A caf 84% of all coffee ethically sourced (goal of 100% by2015) 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 cafconstruction Organize a month of service (employees act aschange 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 events47 48. Norm Tasevski & Karim HarjiWhat does this mean? Social CSR Enterprise SocialComplexity Enterprise 48 49. Norm Tasevski & Karim HarjiWhat SE is and is NotSocial Enterprise Is NotSocial Enterprise Is A fundraising strategy (i.e. a give A business line (i.e. a sales mentality)mentality) Solely focused on either customers Focused on both customers andor clients clients Dependent on restricted funds for Sustainable (ideally self-sufficient)operations (i.e. not sustainable) An event or one-off activity (e.g. A continuous, market-driven activityconferences, bake sales) 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 49 50. Norm Tasevski & Karim HarjiSome 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.Wikipedia50 51. Norm Tasevski & Karim HarjiWhat did we learn? 51 52. Norm Tasevski & Karim HarjiNext Week Complete Survey Monkey guaranteed participation grade! 1st deliverable: Pick a social/environmental issue (international orCanadian), and Pick a group of 4 (we will finalize groups next week basedon final class numbers) Readings 52