Has “Social Entrepreneurship” been co-opted by Non-Profits?

I attended a presentation at Chicago Ideas Week entitled “Social Entrepreneurship: My Venture Changes the World.  Does Yours?”  I was hoping to find out more about how companies in the real world have blended making money and changing the world.  I was disappointed in my quest, and I suspect that I wasn’t the only one.  All eight of the presenters represented non-profit organizations.  Only one organization appeared to be making a substantial effort at generating revenues from for-profit activities.

Now I don’t have anything against non-profits.  They’re terrific organizations staffed by people who work hard at making the world a better place.  My concern is in the message that is sent to for-profit companies that want to change the world; that they are a small minority and not yet deserving of a focus on their efforts.  I happen to disagree; it is the efforts of for-profit social entrepreneurs that will have the greatest impact, due to their financially sustainable models.

We need to start doing a better job of promoting the efforts of the true social entrepreneurs in our society, well-known companies such as Patagonia, Honest Tea, and Ben & Jerry’s Ice Cream; smaller entrepreneurial ventures such as Young Rembrandts and Recycle Technologies (full disclosure: clients of mine;)  and ventures within for-profits that test the business model, such as iGo Cars and CNT Energy (affiliates of a client.)  Such social entrepreneurs provide proof of concept that a singular focus on profits is not necessary to be a successful and profitable company.

8 thoughts on “Has “Social Entrepreneurship” been co-opted by Non-Profits?

  1. I run marketing for Social Innovation Fast Pitch, a production of Social Venture Partners. This year, about 50% of our applicants were for-profit. That was a big increase from last year and was the result of an emphasis on our part to create closer ties to the broader entrepreneur community. In fact Bill Gates blogged about us here: http://bit.ly/VLV41h. You can read more about the winners at http://SIFP.net.

  2. The core of the issue I believe is that many leaders in the NFP sector have been influenced by their focus group to believe that others (ie government and for profits) are responsible for their well being and financial viability. True Social enterprise will get a handle on the fact that the only difference between social enterprise and open enterprise are the shareholders/beneficiaries and even then the “for profits” are often better at benefiting the “social” because they know how to make a profit.

    I think “Social Enterprise” may often be being used to garner sympathy. “Oh, you need to use us because we employ the unemployed etc and even though we really can’t compete in the open market still use us because it is your social duty”

    Unfortunately that foundation for a business model is not sustainable. As expressed in a number of the other comments there are many For Profits doing a better job of creating sustainable outcomes for the underprivileged and downtrodden by creating real jobs and returning real profits to society.

    By the way, I founded and run a NFP with social enterprises. I also work closely with a number of very successful business people who are teaching me true entrepreneurship and who are very good at creating enterprises that return to the society but more through creating than giving. It’s the old ” Give a man a fish, feed him for a day. Teach a man to fish…..”

  3. I was at that CIW session as well. I left a bit disappointed in the nonprofit models that were presented. Maybe the confusion is wrapped in terminology of “Social Entrepreneurship” vs. “Social Enterprise(r)” I’m sure we are parsing at this point, but clearly there were several of us on the same wavelength.

  4. I wholeheartedly agree with the previous comments. I ran a nonprofit for nearly 20 years when I finally realized the mission i was trying to accomplish could not be met ONLY through a nonprofit entity. I retired from the nonprofit and worked with other forward-thinking leaders to develop an L3C (a mission-driven LLC) to accomplish what I could not accomplish through 20 years of nonprofit work. Pioneering is always difficult, and perserverance is a prerequisite, but I truly believe this new business model is imperative to restore economic health for the U.S. and the world. If you want to create more sustainable jobs, rebuild our economy and restore or nation, you may want to take a closer look at the L3C and other mission-driven for profit ventures and support them as you would a nonprofit.

    • Social Entrepreneurship is a field thst hasn’t really taken off here in South Africa. I’m interested to find out if NPOs or NGO as referrered to here in South Africa can be converted into social enterprises. What is L3C

  5. Glad I was not there. I run a for profit business who’s long term goal is to end sex trafficking through commerce, or at least provide 50,000 jobs by 2025, alternative permanent long term employment (alternative to forced prostitution). We formed as a for profit in order to try show people that self-sustaining jobs are a … better way, to help than the unsustainable one off practice of giving, which incidentally not only damages weak economies, but destroys recipients dignity. I never dreamed it would be this difficult! We run into many people who will not work with us because they disagree with how we are doing this, or actually have rules in their organization that prevent them from working with a “for profit” (as if a “not for profit” doesn’t make a profit?). And we are regularly assaulted (verbally) by people who are horribly offended that we would make a profit on those who were marginalized in the past.
    Anything worthwhile is not easy, so we will persevere, we’re thankful for having found, and become a B-Corp (2nd in Michigan?). It’s been not only a source of encouragement but a great resource for finding likeminded businesses to help with our needs

  6. Zbig -I attended the same CIW session and was left with a similar impression. What was impressive about all of the speakers was the way to which they were re-inventing the non-profit model to find new ways to generate revenue and maintain engagement. But, yes. They were all non-profits. A similarly powerful re-invention is happening on the for-profit side with B Corporations and other like minded companies that, while having a profit motive, also have a purpose motive at their core. The main idea that was missing from that discussion was the idea that there is now a business model spectrum – that using your organization as a force for good is possible, regardless of how your organization is structured. I would have loved to see for-profit companies represented as a way to illustrate the spectrum of possibility.

  7. Well said.
    Blending profit with social enterprise may become the better way to accomplish charitable work.

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