Defining Social Entrepreneurship – What it is, What it is not.

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[First installment of our fortnightly theme : Social Entrepreneurship. If you want to contribute to this theme, please get in touch with us]

“Social entrepreneurs are not content just to give a fish or teach how to fish. They will not rest until they have revolutionized the fishing industry.” – Bill Drayton, CEO, chair and founder of Ashoka

There has been a constant debate over the definition of the term ‘Social Entrepreneurship’ – and how different is it from various other forms of nonprofit organizations or even social activism.

So what exactly is social entrepreneurship?

Social entrepreneurship is the work of a social entrepreneur. A social entrepreneur is someone who recognizes a social problem and uses entrepreneurial principles to organize, create, and manage a venture to make social change. Whereas a business entrepreneur typically measures performance in profit and return, a social entrepreneur assesses success in terms of the impact s/he has on society. While social entrepreneurs often work through nonprofits and citizen groups, many work in the private and governmental sectors.

The main aim of a social entrepreneurship as well as social enterprise is to further social and environmental goals. Although social entrepreneurs are often non-profits, this need not be incompatible with making a profit. Social enterprises are for ‘more-than-profit,’ using blended value business models that combine a revenue-generating business with a social-value-generating structure or component. – Wikipedia.

Social Entrepreneurship - Everybody has a role to play

While the above definition does a fair job of defining the term, it doesn’t gives a clarity on how different are nonprofits from social enterprises, especially when it comes to revenues as well as impact.

Short and Crisp Definition of Social Entrepreneurship

A social entrepreneur is any person, in any sector, who uses earned income strategies to pursue a social objective.

Why is ‘Earned Income’ an important criteria?

The ‘Earned Income’ is important because that’s what makes a social enterprise sustainable or self-sufficient.

Bringing in ‘Earned Income’ perspective differentiates Social Entrepreneurs and Nonprofit organizations.

Nonprofits are primarily reliant on philanthropy, grants, voluntarism, but social entrepreneurs, just like business entrepreneurs rely solely on their business model (and not just on philanthropy, though it could be a source of funding etc).

Social Activism is not Social Entrepreneurship

Mahatma Gandhi was a social activist, but not a social entrepreneur.

Social activists create (or attempt to) change via indirect actions – mostly by influencing others (like NGOs, government, customers etc), but the main difference is that do not necessarily ‘execute’ – they are mainly influencers.

So what’s Social Entrepreneurship?

Simply put, social entrepreneur is one who puts social mission at the center of his/her mission to create and sustain social value (not just private value).

Mission-related impact becomes the central criterion, not wealth creation. Wealth is just a means to an end for social entrepreneurs. With business entrepreneurs, wealth creation is a way of measuring value creation. – source (pdf)

The reason why it’s important to clear out some of the misconception around social entrepreneurship is because a lot of nonprofits and social activists tend to call themselves social entrepreneurs, without realizing that they aren’t one.

What’s your opinion?

References: J Gregory Dees (pdf), skollfoundation (pdf),

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