Social Entrepreneurship: A Critical Geography of the Concept

Ana María PeredoFaculty of Business

University of Victoriaaperedo@business.uvic.ca

Murdith McLeanCentre for Studies in Religion and Society

University of Victoriammclean@uvic.ca

Material from this paper should be employed in any way only with citation

Abstract

In this paper we undertake an analytical, critical and synthetic examination of “socialentrepreneurship” in its common use. We consider both the “social” and the“entrepreneurship” elements in the concept. On both points there is a range of use, withsignificant differences marked out by such things as the prominence of social goals andwhat are thought of as the salient features of entrepreneurship.

We conclude with what we believe is a suitably flexible explication of the concept:social entrepreneurship is exercised where some person or persons aim eitherexclusively or in some prominent way to create social value of some kind, and pursuethat goal through some combination of (1) recognising and exploiting opportunities tocreate this value, (2) employing innovation, (3) tolerating risk and (4) brushing asidelimitations in available resources.

Paper

INTRODUCTION

The concept of social entrepreneurship has become well established in the vocabularyused to talk about business. Popular as well as scholarly books and articles are writtenabout the characteristics of organisations thought to be instances of socialentrepreneurship. It holds a place in the curriculum of leading business schools(Berkeley, Columbia, Harvard and Stanford all list not only courses but programinitiatives with this title), and it is the subject of numerous professional and academicmeetings. There are associations devoted to studying and implementing socialentrepreneurship (e.g. Ashoka, The Aspen Institute Initiative for Social InnovationThrough Business, The Ewing Marion Kauffman Foundation, The Fund for SocialEntrepreneurship Program and The Schwab Foundation for Social Entrepreneurship, toname but a few), and there are numerous web sites on which one may becomeacquainted with the concept and receive information and/or advice on putting into itpractice (e.g. “Virtue Ventures” at http://www.virtueventures.com/, The SchwabFoundation at http://www.schwabfound.org/, Community Action Network athttp://www.can-online.org.uk/ and The Canadian Centre for Social Entrepreneurship athttp://www.bus.ualberta.ca/ccse/, to choose several at random from different nations).There are even special editions of prominent business journals, like this one, dedicatedto the realm of social entrepreneurship.

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Anyone who samples this array of material may be left wondering exactly what socialentrepreneurship is. Is it just the application of sound business practices to the operationof non-profit organisations as some seem to suggest, or is it a more radically differentapproach to the business of doing good? We are told that “social entrepreneurship isemerging as innovative approach for dealing with complex social needs (Johnson, 2000:1),” especially in the face of diminishing public funding. What is it that makes thisapproach so promising? Indeed part of judging whether it really is promising rests onunderstanding what the phenomenon is.

This paper is an attempt to address this nest of questions. In general, we consider theconceptual geography of the notion of “social entrepreneurship.” We take an analytical,critical and synthetic approach to uncovering the meaning of the term in those settingswhere it is commonly used. We consider scholarly proposals as to the content of theconcept, and also some less reflective uses of the idea, in many cases testing the formeragainst the latter. Our overall aim is to discover what characteristics of an activity areimplicitly relevant to applying the label “social entrepreneurship.” In the conclusion ofthe paper, we propose what we believe is a suitably flexible explication of the conceptthat gathers together the core elements implicit in common usage. The result, we hope,will help us recognise and perhaps evaluate what is going in the real world of dealingwith social problems.

WHAT IS “SOCIAL ENTREPRENEURSHIP”?

Both terms in the concept “social entrepreneurship” invite examination. One can askfruitfully both what makes social entrepreneurship social, and what makes itentrepreneurship. On both points, there is a variety of outlook.

(a) What makes social entrepreneurship social?

There is broad agreement that social entrepreneurs and their undertakings are driven bysocial goals; that is, the desire to benefit society in some way or ways. Thedisagreement takes place over the location these goals must have in the purposes of theentrepreneur or his/her undertaking.

At one extreme are those who hold that some social goal(s) must be the exclusive aim ofthe social entrepreneur. As social entrepreneurship scholar J. Gregory Dees puts it(1998: 3), “For social entrepreneurs, the social mission is explicit and central….Mission-related impact becomes the central criterion, not wealth creation. Wealth is justa means to an end for social entrepreneurs [our emphasis].” The claim that any wealthgenerated is just a means to the social end suggests that financial benefit to theentrepreneur has no place among the goals of the undertaking. Accordingly, a largebody of opinion locates the concept of social entrepreneurship in the world of non-for-profit (NFP) organisations. Dees, Emerson and Economy’s respected book StrategicTools for Social Entrepreneurship (Dees, Emerson and Economy, 2002) reflects thisoutlook in its sub-title: Enhancing the Performance of Your Enterprising Nonprofit.This idea may even be taken to include associations aimed at delivering some socialgood or service without engaging in any form of exchange, i.e. with no “earnedincome” activities. Anderson and Dees (2002), for instance, ask the question whetherearned income generation, resulting from some form of exchange of a product orservice, is essential to social entrepreneurship. Their answer is emphatic: “No! It is not.Social entrepreneurship is about finding new and better ways to create and sustain

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social value (Anderson and Dees, 2002: 192).” On this understanding, socialentrepreneurs are people acting entrepreneurially with respect to organisations aimed atdelivering social benefit, whether or not business-like exchanges play any part in theiroperation. A scheme to distribute grocery-store leftovers to the needy might then—atleast as far as its goals and structure go—qualify as social entrepreneurship. You couldfind social entrepreneurs inventing ways to deliver shelter or health or education,without necessarily charging fees or looking for any return from their beneficiaries orsupporting their endeavours with earned income.

Other commentators are less permissive. The Northland Institute, for instance—a bodyfounded in 1996 “to improve the effectiveness of community developmentorganisations (The Northland Institute, 2001)”— represents a constituency which linkssocial entrepreneurship with “social enterprise,” a term it defines as “the use of earnedincome strategies by nonprofit organisations (The Northland Institute, 2001).” TheInstitute is one of many participants in the field who cite the “double bottom line…theart of simultaneously pursuing financial and social returns on investment.” On thisview, social entrepreneurship necessarily involves “enterprise,” in the sense of someform of income-generating venture, bent, however, not on profit but on social benefits.NFPs taking this route are often described as “hybrids (e. g. Davis, 1997)” inrecognition of the way that they combine nonprofit with for-profit organisationalfeatures.

A notable example of this form of enterprise would be the Grameen Bank (see GrameenCommunications, 1998) and other “microcredit” lending agencies who extend smallloans to the poor who would not qualify for credit with standard lenders. Their aim is toimprove the condition of their clientele, and profits are turned back into increasedlending capacity. The Big Issue is a quality, general-interest magazine sold on thestreets of Scotland and northern England (and now in other parts of the world). Whatled some scholars of social entrepreneurship to call it “the most prominent example ofsocial entrepreneurship in the U.K. (Hibbert, Hogg and Quinn, 2002: 288)” is itsvendors; homeless people who have undertaken a rehabilitation program under theauspices of a foundation supported by magazine sales. The vendors becomeindependent business people, supported by profits they make on each magazine (TheBig Issue Foundation, 2004). More familiar examples of this kind of activity are thenot-for-profit craft centres that carry on their business in order to provide a market forcraftspeople in poor countries without markets.

These examples illustrate what Alan Fowler has usefully labelled “integrated socialentrepreneurship (Fowler, 2000: 645).” In this form of income-generating activity, theundertaking is itself aimed at produce beneficial social outcomes. So a lendinginstitution may be set up in order to bring a benefit to creditors and not just to createincome to be used in support of some other helpful undertaking. Selling The Big Issueis, by itself, meant to help those who sell it, and not just provide revenue for some otherworthwhile undertaking. Merchandising the crafts of underprivileged artisans is aimedimmediately at the social good of allowing them to make a living.

The contrast is with “complementary social entrepreneurship,” where the enterprise,which does not in itself produce social benefits, supports some other activity meant togenerate the desired outcomes (Fowler, 2000). For example, the BRAC (formerly theBangladesh Rural Advancement Committee) not only supports the foundation ofagricultural and credit ventures to empower poor people to support themselves, it has

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set up revenue-generating enterprises— the BRAC Printing Press, BRAC Cold Storageand the BRAC Garments Factories—to generate profits that will support its coreoperations.

It is a small step from here to allow that the idea of trading in order to pursue socialgoals may be extended to include such things as licensing use of an institutional name,and NFPs may be permitted to operate in partnerships with for-profit companies. SoPomerantz (2003: 25) writes, “Social entrepreneurship can be defined as thedevelopment of innovative, mission-supporting, earned income, job creating orlicensing, ventures undertaken by individual social entrepreneurs, nonprofitorganisations, or nonprofits in association with for profits.” Some form of exchangeventure in the service of a social goal is still in play, and NFPs are still the players, buttheir activities may now be undertaken in partnership with a profit-seeking partner whois willing to devote at least some of his/her profits to what is considered a good cause.

So far in our review, there is a shared assumption that social entrepreneurship is a NFPconcept, and a range of opinion as to whether or to what extent they might or must beinvolved in some form of revenue-generating exchange. Indeed a survey of theappearance of the term “social entrepreneurship” in scholarly and non-scholarlypublications over a 15-year period suggested that fully 83% of press references to“social entrepreneurship” referred to examples from the NFP sector. This appears tohave been decisive in encouraging the authors of the survey to infer that “the socialentrepreneur is overwhelmingly a nonprofit sector phenomenon (Taylor, Hobbs,Nilsson, O’Halloran and Preisser, 2000: 6),” even though they noted that publicationsaimed at a business audience generally used the term to refer to “social mission,” for-profit businesses.

There are good reasons not to confine the notion to NFP enterprises. For one thing, theboundary between not-for-profit and for-profit organisations is far from air tight. AnAustralian review panel provides one useful attempt to delineate the NFP sector(Review Panel on the Law of Negligence, 2002: 59): “A not-for-profit organisation…isan organisation that is prohibited under its governing rules or documents fromdistributing profits to its members, owners or manager.” Even this sensible prescriptionleaves what appear to be borderline cases. One hundred percent of after-tax profits androyalties from the “Newman’s Own” line of products (slogan: “Shameless Exploitationin Pursuit of the Common Good”) are, according to company statements (seehttp://www.newmansown.com/5_good.html) devoted to “educational and charitablepurposes.” Even if we assume that the company’s governing rules forbid anything elseit may still seem somewhat strained to call the operation a NFP organisation. On theother hand, even if the philanthropic distribution is entirely a matter of Paul Newman’scontinuing good will and not company legislation, it nevertheless seems odd to lumpNewman’s Own in with other for-profit enterprises. There would be wide agreement,however, that as long as Newman’s Own qualifies as an example of entrepreneurship, itshould be considered social entrepreneurship. So there are borderline cases on thismatter of profit/not-for-profit classification. And that may suggest that the bordershould not be regarded as fundamentally important.

This suggestion is underlined by the fact that the border proves to be not only vague butporous. There are examples which move from one side to the other without appearing todisqualify themselves as instances of social entrepreneurship. Margaret Cossette used agrant of $4,000 to turn a small public-sector program into a successful NFP enterprise

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for providing home care for rural seniors as an alternative to relocation to nursing-carehomes (Boschee, 1995). When Medicaid money came available which would fund stillmore clients, Cossette lacked the capital needed to support the greatly increased service,and a NFP didn’t qualify for bank credit. Cossette took her venture, Missouri HomeCare, into the for-profit arena, secured her loan and expanded her service many timesover. It has become a profitable company with several million dollars in revenue,serving several thousand clients and providing employment for a large number of home-care aids. Jerr Boschee, President and CEO of the Alpha Centre for SocialEntrepreneurs, has no hesitation in citing Cossette as an exemplary social entrepreneur(Boschee, 1995: 21).

There are many more cases which clearly lie on the for-profit side of the divide but arereadily labelled “social entrepreneurship” by reputable commentators. The SchwabFoundation points to Albina Ruiz’s innovative approach to waste collection in the slumsof Lima, Perú as an outstanding example of social entrepreneurship (The SchwabFoundation, 2002). Ruiz founded and financed a network of local micro-enterprises thatvisit each household weekly, collecting and recycling solid waste. The goals of Ruiz’sCiudad Salud (“Healthy City”) extend beyond improving health conditions to providingemployment and enhanced living conditions in the area, and Ciudad Salud hasapparently proven very successful in accomplishing these ends. As well, it has turnedout to be a profitable undertaking. Accounts of undertakings like Ciudad Salud make itclear that the social goals drive the enterprise, but profits that may be distributed toowners and operators are also a part of the picture.

The cases just cited suggest that profitability is consistent with social entrepreneurship,but social ends still dominate the goal structure of these ventures. What about the casewhere social purposes are mingled with a strong commitment to making money? Thewell-known ice cream franchise “Ben and Jerry’s” has apparently, from its founding in1978, had a strong record of environmental and social responsibility. One of its mostremarkable projects is its “PartnerShop” programme (still in existence after thepurchase of Ben and Jerry’s by Unilever in 2000) which allows select NFPorganisations to open a franchise without paying the usual franchise fees. Ben andJerry’s is a highly profitable corporation, with net revenue of $13.5m in 1999 (Studentsfor Informed Career Decisions, 2000). As the New Statesman asked in reporting theopening of a new venture in Cheshire, England, linking Ben and Jerry’s with anorganisation tackling inner-city poverty through a number of business ventures(Stephens, 2003), “Is this just ice cream with a fashionable dollop of corporate socialresponsibility or, as it progenitors claim, a market solution social problems?” And is itsocial entrepreneurship? It seems difficult to deny it that standing. The missionstatement displayed on the company’s web site (seehttp://www.benjerry.com/our_company/our_mission/) blends a firm commitment toprofitability with an equally strong social and environmental sense. And thesecommitments appear to be borne out in company performance.

For some, the emphasis on profitability appears to disqualify enterprises like these asthe outcome of social entrepreneurship. One influential writer, Charles Leadbetter, forinstance, defines “social entrepreneur” partly in terms of the organisations they bringinto being, which, he contends, must be “social in the sense that they are not owned byshareholders and do not pursue profit as their main objective (Leadbetter, 1997: 11).”Not everyone agrees. Indeed the case for including cases like Ben and Jerry’s isstrengthened by taking into account instances of what other authoritative commentators

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confidently label “social entrepreneurship.” The Columbia Business School SocialEnterprise Program highlighted (The Social Enterprise Program News, 2003) theactivities of Gary Hirshberg, whom it considered an outstanding social entrepreneur.Hirshberg founded a yoghurt company committed to organic, environmentally sensitiveproduction, and is proud of the fact that it is highly profitable. Its profitability heattributes in large part to the committed following his company’s mission attracts. Thereis no suggestion that the mission is merely opportunistic or that the enterprise’senvironmental and social commitments are mere marketing tools. But the goal ofprofitability appears to rank closely if not equal to the objectives of environmental andsocial benefits.

What about cases where the social goals appear further down the list of companyobjectives? Business writers have noted that U. S. companies pay relatively littleattention to the potential of their charitable activities to enhance their fiscal bottom line,and recommend that they begin doing exactly that (e. g. Cone, Feldman and DaSilva,2003b). Paying attention in this way has been called “cause branding,” and is a strategyattracting increasing interest in the competitive world of business. Avon Cosmeticsallies itself with the cause of raising breast cancer awareness. ConAgra Foods, one ofthe U.S.’s largest distributor of processed and packaged foods, joins the fight againstchild hunger by sponsoring after-school cafés. Cause-branding is recommended on thegrounds that while it provides needed support for worthwhile social projects, it alsobenefits the profitability of the business, partly by encouraging loyalty amongcustomers and employees. Companies which “demonstrate a sense of socialresponsibility,” we are told, “stand out in a world of increasingly undifferentiatedservices (Cone, Feldman et al., 2003b: 95).” Without being entirely cynical, one mayget the impression that in at least some cases the social objectives are pursued as muchfor their marketing value as for their intrinsic merit. It must be admitted that in manysuch cases the social pay-offs are considerable, whatever the mixture of motives in thecompany executives electing to align their brand with a social cause. Is this socialentrepreneurship?

At least some respected observers are inclined to say that it is. The Harvard BusinessSchool included in its online newsletter under the section devoted to “social enterprise”an excerpt from an article describing and recommending “cause branding” (Cone,Feldman and DaSilva, 2003a). Being engaged in a social enterprise is not necessarilythe same as being a social entrepreneur (more on that below), but at least the social partof the label seems granted in this case. On this reading, social entrepreneurship shouldbe taken to include undertakings where social goals are added to the firm’s objectives,where they may not rank first in the firm’s priorities and may even be taken on at leastpartly for instrumental reasons.

We have assumed that what makes an undertaking an example of socialentrepreneurship is the presence of social goals in the purposes of that undertaking.What we have outlined is the range of ways that the objective of producing socialbenefits may figure in the goal-structure of an organisation. As we have seen, peoplediffer in their use of the term “social entrepreneur” partly on the basis of differencesabout how prominent social aims must be in an entrepreneurial venture. In general,there appears to be a continuum of possibilities regarding social goals, ranging from therequirement that social benefits be the only goal of the entrepreneurial undertaking tothe stipulation merely that social goals are somewhere among its aims. It is worthhighlighting some points along the continuum, partly because they are the basis for

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some differences in understanding as to what may be considered socialentrepreneurship.

At one extreme are the entrepreneurs who are driven entirely and exclusively by the aimof producing some form of societal benefit. Some of these will engage in nocommercial activity at all. Others will engage in some form of exchange but only on theunderstanding that any profits are directed back to the venture. Still others in this groupwill allow profits to be generated and distributed but only as an instrumental necessityin supporting their social venture.

Most, though not all, of those who use the term “social entrepreneur” will extend therange of its use to include individuals or groups who are chiefly motivated by the wishto produce social benefits, but who aim to produce monetary and other benefits forthemselves, and perhaps others, as well. Entrepreneurs in this grouping are likely also toallow for, even aim at, profits for themselves and/or others. In this case, however, theyare likely to accept profit-making as more than a utilitarian necessity. These people maywell wish to do good and do well for themselves and any backers.

Still others will allow that social goals need only be among the objectives of the socialentrepreneur, and may even be subordinate to the aim of personal gain. In these cases,profit-making may not only be accepted as a good in itself, it may even be the primepurpose, with social benefits welcomed as an additional and happy outcome. In theextreme case, the social benefits may even be the means by which profitability isachieved.

It was mentioned above that the line between for-profit and not-for-profit enterprises ishard to sustain as a significant boundary on social entrepreneurship. Indeed one thingthat emerges from a look at the range of uses given to “social entrepreneurship” is theclear suggestion that the distinctions among public, private and NFP sectors becomeattenuated. As one reviewer of the literature puts it (Johnson, 2000: 1), “sociallyentrepreneurial activities blur the traditional boundaries between the public, private andnon-profit sector, and emphasize hybrid models of for-profit and non-profit activities.”

One other characteristic has been singled out as significant in the decision to recognisean undertaking as social entrepreneurship. Tan and associates stipulate that a socialentrepreneur is necessarily one whose entrepreneurship is located in a society, in thesense that those who are meant to benefit from the activity are somehow “involved” init (Tan, Williams and Tan, 2003: 12f). Involving potential beneficiaries is taken to meanenlisting their “acceptance or cooperation.” Tan et. al. do not elaborate the content ofthis suggestion, and it is not perfectly clear what it entails. It appears to includesomething beyond a passive acceptance of whatever gains the activity produces, buthow much more is left unstated. Whatever Tan and company have in mind, it appears tobe a close relative of another included by Dees in his definition of “socialentrepreneurship.” Social entrepreneurs, says Dees, exhibit “a heightened sense ofaccountability to the constituencies served and for the outcomes created (Dees, 1998:4). In Dees’ view this is a substitute for the market discipline that operates on profit-seeking enterprises, and social entrepreneurs seek out this kind of accountability as acheck on the appropriateness of their enterprise.

There may be good reasons to drawn attention to characteristics like these in sociallyentrepreneurial activities. They may well, for example, have implications for the likelyeffectiveness and/or efficiency of an attempt at social entrepreneurship, and/or it may

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indicate a kind of respect for beneficiaries which is worth reinforcing. But in stipulatingthis “involvement feature” to be a defining characteristic of social entrepreneurship, itseems to us that Tan et. al. and Dees go beyond reporting or tidying up the common useof that term. Many instances of what are commonly referred to as socialentrepreneurship do not appear to make a special effort to win the explicit acceptance orcooperative effort of those they hope to benefit. It might be preferable that should; but itappears to us that this contention takes us beyond reporting what, in the common use ofthe term, a social entrepreneur is, to the matter of what a successful or commendablesocial entrepreneur is. We therefore suggest that the “social involvement” factor maywell be worth noting in a full account of the phenomenon of social entrepreneurship,but should not be included in a reportive account of the definition of the term.

We have sketched the features that we believe are foremost among those that go intodeciding whether or not an entrepreneurial venture is an instance of socialentrepreneurship. We think these characteristics not only give an idea of the landscapeof the social aspect of this concept, but also account for some of the variations in its use.For some people, this whole variegated territory is potentially social entrepreneurship.For others, the idea should be confined according to certain of the conceptual landmarkswe have sketched.

But so far we have only attended to one half of the map. It remains to be consideredwhat would make an undertaking with social aims an example of socialentrepreneurship.

(b) What makes social entrepreneurship entrepreneurship?

In what follows, we attempt to outline what is presupposed in the ordinary use of“social entrepreneurship” as far as the “entrepreneurship” component of the concept isconcerned. We assume that entrepreneurship is simply whatever it is that entrepreneursdo when they are being entrepreneurs. Defining either term defines the other byimplication.

There is no scholarly consensus on what it is that entrepreneurs do when they are beingentrepreneurial. The editor of Journal of Business Venturing, commenting on theconcept of entrepreneurship, stated that

Although numerous definitions have been offered from time to time, nonehave prevailed. Scholars have traditionally tried to define the field in termsof the ‘entrepreneur’ or what the ‘entrepreneur does’ and because there arefundamentally different conceptions and interpretations of the concept ofentrepreneur and the entrepreneurial role, consensus on a definition of thefield in terms of the entrepreneur is perhaps an impossibility(Venkataraman, 1997: 120).

Brazeal and Herbert (1999) begin a review of the study of entrepreneurship with thefamous Hindu story of six blind men disputing the nature of an elephant, each onebasing his view on limited contact with some part of the creature’s body. Brazeal andHerbert’s view is that entrepreneurship researchers are similarly situated. In attemptingto delimit the notion of entrepreneurship in its social setting we must expect to inheritthis unsettled state of affairs.

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Social entrepreneurship is sometimes understood in relation to institutions known associal enterprises. A social enterprise, let us say somewhat stipulatively, is anorganisation which exists in order to create and make available certain social goods,such as poverty relief, employment, health and education. As mentioned above, there isa tendency in some quarters to identify the notion with businesses aimed primarily atproducing these social benefits. For example, a page on the “Social Enterprise London”web site (http://www.sel.org.uk/social_enterprise/social_index.asp) asserts that “SocialEnterprises stand out from the rest of the social economy as organisations that usetrading activities to achieve their goals and financial self-sufficiency.” Many, however,use the term more broadly. As Mary Gentile points out (2002), the business schools atColumbia and Harvard, to cite two significant examples, include within the scope oftheir social enterprise program private, NFP and public-sector organisations addressingsocietal needs. The more developed and detailed explication of “social enterprises”offered by Paton (2002: 33) ranges over the same span of undertakings. This breadth ofpossibilities is probably just a reflection of the range of possibilities we set out above inelucidating the social facet of social entrepreneurship.

There are those who think of social entrepreneurs simply as people who initiate ormanage social enterprises, in one of the senses just described. This use, which parallelsthe unsophisticated reference to anyone starting up a small business as an“entrepreneur,” is found especially in the popular press. While it must be reported aspart of the common use of the term, it does not reflect what most more discriminatingobservers wish to draw attention to in using the expression.

According to a slightly more selective use of the notion, the entrepreneurial element insocial entrepreneurship is linked closely with borrowing from the outlook and methodsof market-driven enterprise. “The key to social enterprise,” writes Pomerantz (2003:26),

involves taking a business-like, innovative approach to the mission ofdelivering community services. Developing new social enterprise businessventures is only one facet of social entrepreneurship. Another facet ismaximizing revenue generation from programs by applying principles fromfor profit business without neglecting the core mission.

Tom Reis introduces a report on social entrepreneurship done for the KelloggFoundation by saying (Reis, 1999: i), “a new generation of innovators and entrepreneurs— committed to using market-based approaches to solve social problems — isunleashing new ways of using resources for the public good.” In commenting on thecommon usage of “social entrepreneurship,” Mort et. al. note that one such use “is thatof applying tools and strategies of business to reframing the planning for social ventures(Mort, Weerawardena and Carnegie, 2003: 80).” They go on to instance the use of“business plans, venture capital and business mentoring” in innovative NFPorganisations. Many accounts in the press and in material used by NFPs and others fortraining reflect this emphasis.

Students of social entrepreneurship who concentrate on its entrepreneurial facet are,however, inclined to draw more specifically on the scholarly literature onentrepreneurship and apply it to the social sphere. Researchers will point to thederivation of the word “entrepreneur” from the French entreprendre, which meansliterally “to undertake,” as in accepting a challenging task. They will refer to the

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groundbreaking development of the concept by Richard Cantillon (1680-1734) and JeanBaptiste Say (1767-1832), and to the vital contribution of Joseph Schumpeter in the 20th

Century (see, e.g., Dees, 1998: 2f). What emerges from examining the writings of theseindividuals is the picture of entrepreneur as risk-taker and innovator who, whensuccessful, contributes fundamentally to creating economic value. Tan and associates(Tan, Williams et al., 2003) arrive at a similar understanding of the concept byconsidering “intuitively plausible examples” of entrepreneurs and non-entrepreneurs,and consulting the Oxford English Dictionary. “Entrepreneurship,” they conclude, “isthe process of attempting…to make business profits by innovation in the face of risk(2003: 10).”

Dees shares the view that social entrepreneurs “are one species in the genusentrepreneur (Dees, 1998: 3).” He, too, begins his explication of entrepreneurship byreviewing the classical contributions to the notion by Say and Schumpeter. From Say headopts the element of value creation; from Schumpeter he takes up the notion ofinnovation and change. He supplements these on the basis of proposals made bycurrent-day scholars Peter Drucker and Howard Stevenson. Dees credits Drucker withamplifying Say’s concept to stress the entrepreneurial activity of recognising andexploiting opportunities. Stevenson he applauds for adding, on the basis of extensiveresearch, the notion of resourcefulness; the refusal to be constrained by prevailingresource limitations. On this basis, Dees defines the entrepreneurial aspect of socialentrepreneurship as including (1) the recognition and “relentless” pursuit of newopportunities to further the mission of creating social value, (2) continuous engagementin innovation and modification, and (3) bold action undertaken without acceptance ofexisting resource limitations.

Perhaps the most fully-developed model of social entrepreneurship is that elaborated byMort et. al (2003). They argue that social entrepreneurship is a “multidimensional”construct formed by the intersection of a number of defining characteristics (82).Referring to a variety of scholarly work on entrepreneurship (e.g. Gartner, 1988;Mintzberg, 1991; Singh, 2001; Stevenson and Jarillo, 1990; Stevenson, Roberts andGrousbeck, 1989), they explicate the specifically entrepreneurial component of socialentrepreneurship in the following way. Social entrepreneurs first of all “exhibit abalanced judgment, a coherent unity of purpose and action in the face of complexity(Mort, Weerawardena et al., 2003: 82).” This propensity, Mort et. al. argue, allows thesocial entrepreneur to balance the interests of multiple stakeholders and to maintainhis/her sense of mission in the face of moral intricacy. Second, social entrepreneursexcel at recognising and taking advantage of opportunities to deliver in a superior waythe social value they aim to provide. Finally, social entrepreneurs exhibit in the socialarena the risk-tolerance, innovativeness and “proactiveness” displayed by commercialentrepreneurs in their setting.

At least one characteristic in this list goes beyond what is suggested above in otherapplications of the concept of entrepreneurship to social enterprise. The notion ofbalanced judgement and steadiness of purpose is an addition to the ideas of opportunity-recognition, risk-tolerance, innovativeness and resourcefulness we have alreadyencountered. Another apparent addition— the idea of “proactiveness”—is notelaborated by Mort and associates in a way that makes it easy to appraise, but wesuggest it is already implicit in the notion of recognising and exploiting opportunitiesfor creating and delivering value. What about this idea of balanced judgement andstability of purpose?

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This proposal appears to us to raise a general issue in explicating the concept ofentrepreneurship, perhaps especially when it is placed in the context of a social mission.It is arguable that with this suggestion, Mort et. al. move from describing a socialentrepreneur to describing a commendable or successful social entrepreneur. (Indescribing the “social” element of social entrepreneurship, they describe the socialentrepreneur as “entrepreneurially virtuous (82),” and expand on that notion usingconcepts from virtue theory in ethics. Their second entrepreneurial factor—“excelling”at recognising opportunities, and delivering value in a “superior” way—arguably showthe same inclination.) There appear to be echoes of this inclination even in the morerestrained list given by Dees. For instance, he describes the social entrepreneur as onewho “relentlessly” pursues new opportunities to pursue the social mission and engagesin “continuous” innovation (1998: 4). We noted earlier his inclusion of the requirementthat the social entrepreneur displays a keen sense of accountability to those s/he aims tobenefit, and we suggested that this belongs, strictly, to an account of what iscommendable in a social entrepreneur rather than what makes him or her a member ofthe class.

Suggestions of this kind are common in the literature aimed at elucidating the idea ofsocial entrepreneurship. Entrepreneurs, especially social entrepreneurs, are described interms that emphasise the value of their contributions. The aim of the description is oftento celebrate their accomplishments and encourage others to emulate and/or supportthem. It is natural enough in these circumstances that commentators extend their“definitions” of the phenomenon to include normative characteristics, but there are goodreasons to resist the temptation.

In offering their own account of social entrepreneurship, Tan et. al. argue persuasivelythat any plausible definition of “entrepreneur” must allow for unsuccessfulentrepreneurs, given that we would all agree there are many cases deserving thatdescription (2003). Similarly, we maintain, any explication of the idea of socialentrepreneur must allow that some will have selfish motives behind their social mission,or be less than relentless, or be uneven in their performance, or be otherwise less thanexemplary. Once again, it seems obvious that there are many examples of such things inthe real world. Dees labels his own definition as “idealized (1998: 4),” explicitlysuggesting that actual cases will exemplify his list of characteristics unevenly andpartially. The conclusion we draw is that a satisfactory definition of theentrepreneurship component of social entrepreneurship should avoid building in thenotions of success or estimability and allow for social entrepreneurs who may beunsuccessful, inconsistent, and otherwise less than exemplary.

In our discussion of entrepreneurship we have taken for granted an element that wasfundamental in our examination of the social aspect of our subject: the pursuit of someform of social benefit. Researchers studying social entrepreneurship routinely identifythis as one of the essentials of social entrepreneurship. One feature of this social-benefit-seeking is particularly well brought out by John L. Thompson (2002).Thompson’s schema of social entrepreneurship consists of “Envisioning,” “Engaging,”“Enabling” and “Enacting.” For the most part, his analysis seems to us to be captured inthe notions we have discussed above; recognition and exploitation of opportunity,innovation and so on. His first step, “envisioning,” however, brings an important nuanceto the subject of goal-identification. It is easy to overlook the entrepreneurialcontribution that may be made in simply identifying and highlighting a social need. Thenotion of “envisioning” draws attention to the way in which social innovators may

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discern and call attention to a need that others fail to recognise or pay sufficient heed to.It may be one of the most important steps in the process of entrepreneurship that aparticular social want is recognised and brought to light.

CONCLUSION

On this basis, it seems to us that five general headings emerge from the discussion ascapturing the essentials of entrepreneurship in the setting of social endeavour.

1. There is general agreement (reflected in our discussion above of thesocial element) that the social entrepreneur will aim at creating socialvalue, either exclusively or at least in some prominent way. A valuableentrepreneurial contribution may consist in identifying a social need,the meeting of which provides social value.

2. The capacity to recognise and take advantage of opportunities to createthat value is considered by many if not most to be a requirement ofsocial entrepreneurship.

3. Some kind of innovation in creating and/or distributing social value,ranging from outright invention to adapting someone else’s novelty, iswidely recognised as essential to social entrepreneurship.

4. Social entrepreneurs, like other entrepreneurs, are thought by many torequire an above-average degree of risk tolerance.

5. The claim that (social) entrepreneurs are unusually resourceful in beingrelatively undaunted by scarce assets is advanced by many as anessential feature of these social benefactors.

All of these are characteristics which may be had to a greater or lesser degree. Some arespecified to be “greater than average” in amount, but there is no way of indicatingexactly the point at which this qualifying standard is reached or exceeded. As in thecase of the social aspect of our target concept, this list represents a catalogue fromwhich particular users of the notion will choose somewhat selectively both as to whatthey include and how they weight the factors. We submit that this variability simplyreflects the unevenness in the common use of “social entrepreneurship.”

There is one further point to be made about social entrepreneurship. It is easy toassume, and the literature often seems to reflect this assumption, that socialentrepreneurship is exercised by individuals. As Thompson (2002: 416) has remindedus, it would be a mistake to accept this generalisation. We suggest it is best to think ofentrepreneurship as an extended activity which may well be carried out by a team or agroup of people (see Stewart, 1989). The characteristics listed above could be thoughtof as roles in a performance; roles which may be split and/or shared. Others havepointed out that entrepreneurship may find a place in cultural settings where collective,rather than individualistic, thinking prevails (Peterson, 1988). Peredo (2001; 2003)actually describes a situation in which is plausible to speak of a community, actingcollectively to exercise (social) entrepreneurship. To be an entrepreneur may thereforemean being an individual, a member of a group, or an organisation who carries out thework of identifying and creatively pursuing a social goal.

We have suggested that both the social and the entrepreneurial aspects of socialentrepreneurship may be satisfied by a range of related possibilities. Putting together the

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two elements in our discussion thus far yields the following general outline of thecompound concept.

Social entrepreneurship is exercised where some person or persons aimeither exclusively or in some prominent way to create social value ofsome kind, and pursue that goal through some combination of (1)recognising and exploiting opportunities to create this value, (2)employing innovation, (3) tolerating risk and (4) brushing asidelimitations in available resources.

This “definition” is meant to allow for the range that exists in common usage, but alsoto capture significant points in the range which serve to establish the substantialdifferences in use. Its purpose is not just to establish a theoretical point, but to give usclearer vision in considering attempts to deliver social value.

Contact: Dr. Ana María Peredo, Faculty of Business, PO Box 1700 STN CSC,University of Victoria, Victoria, BC, V8W 2Y2, Canada

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