What is Social Entrepreneurship and Social Enterprise All About?
Last year I wrote an article for the American Jewish Committee’s Global Voices Blog, where I shared some of my disenchantment with NGO’s in Nepal. While I believed the organisation I volunteered with was doing some very important work, I felt that many of the traditional NGO’s I encountered where largely inefficient, unaccountable to their recipients and more concerned with keeping donor money flowing than making a sustainable impact.
What I didn’t realize then was that this frustration would take me on a journey to discover a new world of which I was only vaguely familiar at the time, the world of social enterprise. Since then I have spent the past year in London, which I discovered is a “hub” of the social enterprise world. Throughout my year I have attended various talks and events given by inspiring social entrepreneurs and organisations that support them such as the Ashoka, Acumen Fund and the Skoll World Forum for Social Entrepreneurship. I have also been involved in setting up a Social Enterprise for development (se4D) forum at the LSE and with the help of a ROI micro-grant I gave a talk on the topic at Limmud Conference in December.
It seems fitting that I should finish off my year in London, back in Israel doing the SocialStart training course to learn to facilitate aspiring young social entrepreneurs to develop their ventures. It is particularly fitting that the course is a collaboration between ROI and PresenTense, the organisations where I first began hearing about the terms ‘social innovation’ and ‘social entrepreneurship’ some years ago, both of which are leaders in this field in the Jewish world today.
So what is social entrepreneurship and social enterprise all about?
A good question and one that was hotly debated over the course of the week. While there is no single definition of this still relatively new phenomena, Nobel Peace Prize recipient, Muhammad Yunus, the founder of Grameen Bank (microfinance is perhaps the most commonly sighted example of a social business) first defined the term ‘social business’ as a company where the primary motive is social welfare maximization as opposed to profit maximization as is the case with a conventional business. He refers to this as a “new kind of capitalism that serves humanity’s most pressing needs”.
Although this definition has been debated, the general idea is that while beneficiaries are expected to pay for the products or services they receive, the price is set so as to maximize the social outcome while still covering the costs of the business. In theory this means that social businesses have budget constraints that are subject to their beneficiaries instead of them being primarily reliant on donors. This results in increased accountability and often efficiency as the social enterprise must ensure it delivers a service that their beneficiaries value and are prepared and able to pay for.
While this clear cut scenario is not viable for every business and often donors or government subsidies are still necessary, the SocialStart seminars teach fellows how to find innovative business models to try and reduce the gap between revenues from donors and beneficiaries and thereby to increase the sustainability of their ventures. Over the course of the week we were taught various methodologies to help fellows to develop their ventures and try and establish the delicate balance between sustainability and achieving their social visions.
For me this course was a wonderful opportunity to bring back some of my knowledge and experience in the social enterprise world and try to connect it back to the exciting programs happening in the Jewish world. I look forward to future opportunities to put my newfound skills as a facilitator into practice and hope to inspire others as I myself have been inspired by the exciting word of ‘social enterprise’.
Connected by the ROI Community of Jewish Leaders.