The Importance of Social Entrepreneurship in the World

Dr Yunus who founded Grameen Bank said, “Grameen’s central focus is to help poor borrowers move out of poverty, not making money. Making profit is always recognised as a necessary condition of success to show that we are covering costs. Volume of profit is not important in Grameen in a money-making sense, but important as an indicator of efficiency”.

The way in which social entrepreneurs are funded is identified as social enterprise which Alter (2002) defined as “a generic term for a non-profit business venture or revenue generating activity founded to create positive social impact while operating with reference to a financial bottom line”.

Many social entrepreneurs will spend the additional money that they make primarily on the people that they are trying to help and change the social situation and address its issues; secondly they will spend the additional money on advertising to raise public awareness of these social issues.

Business entrepreneurs will also spend money on advertising; however this is usually to raise their brand awareness with the public with the ultimate aim to increase sales and to achieve high levels of profit.

A similarity between social entrepreneurs and business entrepreneurs would be that they are both commonly accused of being more concerned with the impact and outcomes of their actions rather than the processes involved in making those changes. The pressures of quick results can force social entrepreneurs to look primarily at fixing problems in the short-term which can cause more problems long-term.

This can cause social entrepreneurs to overlook any underlying causes of the problem.

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One example of this can be seen in the work by Mimi Silbert. Mimi started the Delancey Street Foundation, which created a place for substance abusers to be rehabilitated, educated and gave them a place to live. She started this cause in 1971 with a one thousand dollar loan which the aim of helping drug abusers, criminals and the homeless in her local area to make it a better and safer place.

This organisation has withstood the test of time and after 36 years it is more successful than ever, receiving more than 10 million dollars in private donations every year. The success of this company is without question, however it makes no attempt to help stop drug abuse and crime problems before they occur, a way in which this could be done would be through campaigning and educating the younger population about the dangers of drugs.

These are seen as the underlying causes which lead to problems such as drug abuse, crime and homelessness, Mimi Silbert’s work helps all individuals after they have already developed these problems. Many entrepreneurs, both business and social often have results which they did not intend, these results can sometimes make it very difficult to define whether and entrepreneur is business or social, for example, a business entrepreneur can start their business with the aim of making profits but their work causes a beneficial change in society.

This person intended to become a business entrepreneur but unintentionally converged into a social entrepreneur. The same can be said for social entrepreneurs who have an original aim to address social issues, if they then become highly successful in their efforts it is very likely that they will start to make a profit linking them with business entrepreneurs. Another similarity between business entrepreneurs and social entrepreneurs are the way that they are perceived by the general public.

Entrepreneurs of all types are usually associated with high levels of success; this is generally because the individuals behind companies are not heard of unless their business or social movement has become successful. This links in with the idea of entrepreneurs being all the same but different from normal people. As most entrepreneurs are only known publicly when they are successful they are related with certain personality types and characteristic traits, which make them successful when really anybody can become and entrepreneur in theory.

A key difference between business and social entrepreneurs would be their different views on the concept of wealth. To a business entrepreneur wealth and profits would generally be classed as the same thing, this is because their main aim is to make money therefore they consider themselves to be wealthy is their business is successful and profit margins are high. Social entrepreneurs on the other hand classify wealth in a completely different manner. Social entrepreneurs class wealth in their work as creating a substantial and beneficial change to society which can be sustained over a long period of time.

Social entrepreneurs class their wealth as an indicator of how much they of their work has been beneficial to the society. This also includes that any profits a social entrepreneur does manage to make has a positive Social and/or Environmental return on investment (ROI), this means that the profits are re-invested into the economy and to help more people, this is done because social entrepreneurs usually decide to help people due to an ethical imperative.