Chapter 15 – Social Entrepreneurship

Definition

A social entrepreneur identifies & pursues a ‘social opportunity’ in the form of a wicked problem 
They attempt to present a lasting solution through the introduction of a social innovation which is
emphasised through a viable & sustainable business model in order to generate a scalable and
measurable impact & change

The purpose of the social entrepreneur is not to generate profits RATHER to identify social needs and
redress them

The Social Entrepreneur plays the role of change agents in the social sector by:

– Adopting a mission to create and sustain social value

– Recognises and pursues new opportunities
– Engages in continuous learning, adaptation and innovation
– Exhibits a heightened sense of accountability
– Assessed in terms of the degree of social value they create  creating social change and
benefit

Different forms of social entrepreneurship

• Integrated Entrepreneurship: Income generating activities that are geared towards creating social
benefits

• Re-interpretation: The application of existing activities in such a way that costs are reduced and
income is generated

• Complimentary Social Entrepreneurship: the generation of income X create a social benefit, rather it
cross subsidises activities that are less financially viable

Drivers of social entrepreneurship

– Welfare organisations & CSR programmes cannot meet the massive amount of need that
is especially severe in South African society which is in transition
– Social entrepreneurs do not only seek to meet unmet needs but also to reduce
dependency upon the state (by making initiatives sustainable)

∆ Roles:
- Address social issues that are inadequately addressed by Government
- Provide urgent BUT ALSO sustainable solutions to the most difficult social problems
- Create long term systems & frameworks for NGOs, CSR & Philanthropy
- Bring professionalism & innovation into the Social Sector

Characteristics

 Motivation: Social entrepreneurs are driven by a passion to effect social change & less by the
potential for monetary reward  Motivated by intrinsic factors = Altruism, satisfaction, values &
beliefs and the need to make a lasting difference
  Age and risk factors: Middle-age individuals are less likely to become social entrepreneurs
because of financial risks associated with social ventures VS Younger individuals who don’t have
the same level of financial responsibility and are less risk averse = more likely to become social
entrepreneurs
 Background and experience: Many social entrepreneurs have previous experience working in
social ventures
 Cultural and societal impact: Certain cultural & societal contexts might stimulate social
entrepreneurial behaviour
 Abilities: Creative, Committed & hardworking, Empathetic and have ability to identify & meet
needs of a community
 Roles: Perform multiple roles  innovators, initiators, transformers, mentors & role models
 Networks: NB! to develop relationships and networks with communities, community leaders 
strategic alliances around common cause
 Perception of social entrepreneurship as a career alternative
 Venture growth and expansion: This decision is based on the needs of the community

Process of Social Entrepreneurship

1. Understand social context

– HIV/AIDS
– Unemployment and poverty
– Education and skills development

2. Identify Opportunity and Develop Mission  The social value proposition

- Defines & reflects the social change and impact anticipated
– Mission must be sustainable  Formulate a mission which satisfies a core purpose and
room for income generation
– Use mission/money/market matrix to assess financial stability of the opportunity
 This matrix requires the SE to balance his mission with its overall sustainability based
on its profit potential & on the need that requires redress
 The potential for income generation must not detract from core mission AND poor
income generation alternatives MUST NOT deter social entrepreneurs from satisfying
a critical need.
 Do Projects: High mission, market and money scores indicate the need to develop or
expand
 Don’t Projects: Low mission & money scores indicate that reducing or eliminating
projects
  Decide Project: Mixed scores indicate a need for additional research in order to
decide whether they are Do’s or Don’ts

3. Actions
- Launching a social enterprise
- Sources of funding

4. Evaluation and Scaling out

- Primary purpose of the social entrepreneur  ensure that their social innovations are
widely spread
– Innovation can be defined in terms of the programme, the organisation and the principle:
this is called framing
– The innovation can be ‘spread’ out in a number of ways
• Disseminationn of information = The provision of information and assistance to
other social entrepreneurs wishing to implement a social innovation in a
particular community.
• Affiliation with parent organisation = Social franchises
• Branching = Implementation is done through subsidiaries of central organisation
– Assessing option for spreading out goes to 5 R’s:
1. Readiness = Is the innovation ready to be spread? NB!  ensure the innovation is
sustainable & in support of the originating organisation
2. Resources = NB! that SE considers different forms of funding AND tries to minimize
resource requirements – volunteering etc
3. Receptivity = This is dependent on the openness of the community to the innovation
AND its demand for the innovation ALSO depends the values, ideologies and practices
associated with the innovation
4. Risks = The impact on community (fails to have an impact) & organisation
(implemented incorrectly)
5. Returns = Impact is not only about the number of people reached BUT ALSO how well
they were served  the benefit realised by the innovation.  More tightly controlled
forms have higher returns