Benjamin Franklin once said, “Do well by doing good.” His point was that contrary to common stereotypes about greedy corporations or the ruthless nature of business, it is possible in capitalist societies to make money through enterprises that benefit communities, individuals, animals or the environment.
Social entrepreneurship is a form of enterprise that seeks solutions to complex and pressing social problems. Unlike traditional businesspeople, social entrepreneurs such as Cecilia Ibru measure not only profit, expense and return, but also take into account the impact their enterprise has on society at large.
Who Fits the Mold?
Non-governmental organizations, non-profit organizations, foundations, governments, charities and now many colleges and universities have had a foothold in social entrepreneurship since the term was coined in the 1960s. There is no set definition on what makes a social entrepreneur, but philanthropists, social activists and fundraisers are all key players in the larger community. These agents of change work in countless different sectors and industries, but all provide the end result of starting business enterprises that help more than just their bottom lines.
The Possession of Capital
Having money up front is a key ingredient to being a successful social entrepreneur. If you’re not sitting on a fortune, business owners who are skilled at fundraising are excellent candidates for social enterprise.
As profiled in an article by Forbes, one young social entrepreneur used capital in the form of micro loans to provide incentives to poverty-stricken women to take action that benefited themselves and their surrounding communities. By providing these loans, she’s already pulled in more than $260,000 to pay for women in Africa to go to HIV clinics and to send their children to school. Without this boost, the women she helped would have to instead work and likely have their children work.
If owners are not ready to plunge into this unique genre of business on their own, foundations exist – often set up by experienced, well-monied businesses – as a means to bolster the initiatives of others. Foundations pair lenders with borrowers, donors with fundraisers and help well-intentioned but inexperienced entrepreneurs find contacts in their field who can help them get started.
Since its arrival as a business genre in the 1960s, social entrepreneurship has drawn some of the top talent in the world to enterprises that are not only profitable, but follow a system of guidelines based on a corporate moral compass. From loans to food programs to education, social entrepreneurs follow the advice of one of the first architects of the genre, Ben Franklin, who did well by doing good.
Andrew Lisa is a freelance writer living in Los Angeles. He writes about the socially conscious business movement.