Social Entrepreneurship 101

Social

Social entrepreneurship is a business model that is driven by a mission, and is designed to address unmet needs in underserved communities. These businesses are primarily non-profit organizations, but they may also include for-profit companies that have a social impact. The key to a successful social enterprise is to develop a business model that is sustainable, financially responsible, and accountable for its impact.

There are many different ways to establish a social enterprise. One of the most common is to create a job within the community. Another is to produce environmentally friendly products, or reduce carbon emissions in the supply chain.

Another option is to donate proceeds from a for-profit business to a cause. In fact, consumers are more likely to buy from companies that are dedicated to an issue they care about. Whether it’s fighting climate change, promoting racial justice, or supporting the foster care system, consumers are increasingly holding businesses to a higher standard.

Microlending is a form of social entrepreneurship that provides small loans to individuals without access to traditional lending institutions. The money provided by microlenders opens economic opportunities for emerging businesses and can help aspiring entrepreneurs find a foothold in competitive landscapes.

Another example of a social enterprise is Warby Parker. They have created a “Buy a Pair, Give a Pair” program, where the company partners with local government agencies to provide free eye exams and glasses to underserved communities. This type of venture can be a great way for companies to make an impact on the world, while increasing revenue at the same time.

Other social enterprises focus on addressing environmental concerns. Companies such as Warby Parker and Vava Coffee work with 30,000 farmers and smallholders in the coffee industry. The profits they generate from selling clean energy, coffee, and other products, are used to fund research and development on sustainable agriculture.

Other examples include DC Design and Gente Del Futuro. These cross-cultural, coffee-training companies partner with local NGOs and nonprofits to design projects that tackle important social issues. As with Warby Parker, they use their profits to fund charitable causes.

Unlike a traditional business, a social entrepreneur’s mission must be measurable and sustainable. They are expected to have a transparent business plan, a financial model that is accountable for its impact, and the ability to communicate their motivation. If a social entrepreneur is unable to generate sufficient revenue, they can use crowdfunding websites to raise capital. However, it is not uncommon for a social entrepreneur to repurpose existing technology and resources to support their cause.

Lastly, a social enterprise must have a strong cause to support. This can include providing access to communities that do not have utilities, creating freshwater services, or educating customers about carbon emissions. Having a strong cause can be a great competitive advantage in a crowded market.

Although the social entrepreneurship trend is growing, the definition of the term is a little more murky. It’s often described as altruistic entrepreneurship or “social innovation” in addition to entrepreneurship.