Social entrepreneurship

By Alastair Wilson
Chief Executive, School for Social Entrepreneurs

Highlights

• A social entrepreneur identifies and implements practical solutions to social problems through innovation, resourcefulness and persistence.
• The European model of social entrepreneurship differs from the US in fundamental ways.
• Measurement and evaluation is central to the success of social entrepreneurs.
• Philanthropists can play an important role in supporting social entrepreneurs through funding, mentoring, and brokering contacts and networks.

_________________________________

What is a social entrepreneur?

In its simplest definition, a social entrepreneur is someone with entrepreneurial characteristics, traits and abilities using and applying those for social benefit. Which means that ‘social entrepreneurship’ is a new term for something that has existed throughout the ages, rather than a new phenomenon itself. People like Robert Owen, Florence Nightingale and Michael Young have fit the term in the past century or so in the UK, but social entrepreneurs were also presumably behind innovations dating much further back, like law courts, schools, taxation, democracy and schools.

A social entrepreneur identifies and implements practical solutions to social problems through a combination of innovation, resourcefulness, persistence and pragmatism. They have a clear understanding of their overall goal and the primacy of their social mission, and combine hard-headedness with idealism. They choose whichever models, governance and revenue streams are best fit to help them achieve their vision.

The US model of social entrepreneurship, as evidenced by Ashoka, Skoll Foundation, Schwab Foundation and others, tends to focus on the exceptional, heroic individual seeking to have a large-scale, nationwide, top-down impact.

The UK / European model is different in three ways:

1. It does not place emphasis on the need for scale (some successful social entrepreneurs operate successfully and meet needs locally);
2. It supports bottom-up change as well as top-down; and 
3. It emphasises more how social entrepreneurs engage and mobilise communities, teams and movements to achieve change.

Whilst the phenomenon is not a new one, social entrepreneurship is undoubtedly growing and increasing in relevance with each passing year: for example, the organisations that form the Social Entrepreneurship Policy Group have a combined constituency of well over 10,000 individuals.

This growth is fostered by several trends:

• Frustration and disillusionment with the political system’s ability to change things
• Rise of the well-being agenda: more people seeking meaning in their work lives; and increasing self-employment
• Charities becoming more business-like, and the growth of corporate social responsibility in business, bringing the worlds closer together 
• Hugely networked and mobile society, on- and off-line
• Wide range of options (organisational, governance, income, support) to choose from to help turn ideas into reality

Social entrepreneurs and social enterprises: what is the difference?

Social enterprises are defined in different ways: by their legal structure (e.g., co-operatives, development trusts, community interest companies, social firms), by the social mission and governance embedded in their structure, or by their business model (profits from traded income that are then reinvested).

Social entrepreneurs do start up social enterprises but, as discussed above, they use whatever structures and processes help them achieve their goal: so they also start registered charities, initiatives in the public sector, and for-profit businesses. Whilst the majority establish themselves in the third sector, they choose from a huge variety of models and structures; or create their own. This operating across the spectrum of organisational options and sectoral boundaries is illustrated by Figure 1.

The difference between social entrepreneurship and social enterprise, therefore, is that the former is about the driven individual, whilst the latter is about the organisational form. Social entrepreneurship is about what people do; social enterprise is about (some of the) structures they choose and use to get it done.

A brief history of social entrepreneurship in the UK

Whilst the term ‘social entrepreneur’ emerged in the 1960s and 70s, it gained more prominence in the 80s and the 90s. It was towards the end of the latter decade that Charles Leadbeater wrote the influential pamphlet ‘The Rise of the Social Entrepreneur’ (for Demos), and this happened almost simultaneously with Michael Young starting the School for Social Entrepreneurs (SSE; in 1997) and with the establishment of Community Action Network (CAN) by Adele Blakebrough and Andrew Mawson (in 1998). These two organisations, providing support and networking, played a central role in promoting and legitimising social entrepreneurship.

Social entrepreneurship has grown enormously since then, with different funds, philanthropists, support agencies and awards schemes emerging. Academic courses, research programmes and events have also been established, most notably at the Skoll Centre for Social Entrepreneurship at the Said Business School in Oxford (founded November 2003), which hosts the high-profile Skoll World Forum of Social Entrepreneurship. The UK is widely viewed as a leading nation in the field.

The impact of this work is significant: social entrepreneurs are the lifeblood of the third sector – founding, running and populating charities, social enterprises and social businesses. These driven individuals sustainably deliver services and goods for social change at local, regional, national and international levels. They create jobs, gain skills, inspire communities, and are the leaders in creating social capital and social cohesion.

Outlook for future development

The trends outlined above (well-being, ethical consumerism, self-employment, political disillusionment, etc) are only increasing, so the growth of social entrepreneurship looks set to continue. Whilst not a panacea for every social issue, social entrepreneurship can play a significant role in creating sustainable social change over the coming years, in combination with enlightened physical regeneration, access to finance, and tailored support.

Organisational and sector boundaries will continue to blur, and new models and delivery partnerships continue to emerge. To differentiate and distinguish between different initiatives, the following will therefore become crucial:

• The quality of the work/activity/product – for example through reputation, measurement, evaluation, or provenance
• How well this is communicated – for example through brand, voice or community and stakeholder engagement 
• The transparency with which the organisation operates – for example through mission, finances, governance or reporting

Future development for social entrepreneurs will centre around these areas, particularly around measurement and evaluation (social return on investment, social auditing and so on) which remains central to their success.

Next steps: practical information for the philanthropist

The obvious way for philanthropists to get involved is to identify social entrepreneurs working in the areas that interest them, and invest in their work. Though inherently more risky than giving to a larger, more established charity, the potential for tangible impact is also that much greater, as is the excitement from being involved in something at an earlier stage. Many social entrepreneurs require pump-priming investment, and this can be incredibly important to their organisation’s future. The impact from such an investment can be in the form of a pure social return on an investment, a ‘blended’ social and financial return, or a pure financial return (depending on the model, and the philanthropist or investor’s aims).

Alongside funding, support over the long-term is crucial to the social entrepreneur, and philanthropists can play a role in helping put this in place, both directly (through funding support or mentoring) and indirectly (through brokering contacts and networks).

The power imbalance between the funder and the funded is substantial in this context, and it is particularly important that the social entrepreneur can gain confidence and admit what they cannot do, in order to improve their (soft) skills and knowledge appropriately. Support and involvement of the philanthropist should be sensitive to this, and kept separate from the funding process itself.

It is recommended to work with and through a specialist broker agency that is supporting social entrepreneurs. In this way, a philanthropist can find people they want to invest in, fund support for them (which means success is more likely), and decide whether they want to make further investments in the organisation when it is at a more mature stage.

Recommended resources

Support agencies

• Ashoka UK
• Changemakers
• Community Action Network
• Scarman Trust
• SENScot 
• School for Social Entrepreneurs
• Skoll Centre for Social Entrepreneurship
• Social Enterprise Coalition
• Social Enterprise Unit (govt)
• UnLtd

Reading

• Everyday Legends: the stories of 20 great UK Social Entrepreneurs by James Baderman and Justine Law (WW Publishing, 2006)
• There’s No Business Like Social Business by Liam Black and Jeremy Nicholls (Cat’s Pyjamas, 2004)
• How to Change the World by David Bornstein (OUP, 2004)
• Your Chance to Change the World: the No-Fibbing Guide to Social Entrepreneurship by Craig Dearden-Phillips (DSC, 2008)
• The Meaning of Social Entrepreneurship by Greg Dees (Duke Uni, 1998)  
• The Power of Unreasonable People by John Elkington and Pamela Hartigan (HBS, 2008)
• The Rise of the Social Entrepreneur by Charles Leadbeater (Demos, 1997) 
• The Social Entrepreneur by Andrew Mawson (Atlantic Books, 2008) 
• Social Entrepreneurship: new models of sustainable change by Alex Nicholls et al (OUP, 2008) 
• Leadership in the Social Economy by Charlotte Young and Fiona Edwards-Stuart (SSE, 2007)

Research / evaluation

• Social Entrepreneurship Monitor
• Research Initiative on Social Entrepreneurship (Columbia Uni)
• Social Enterprise Journal
• Evaluation of School for Social Entrepreneurs (1997-2007; nef)
• Ashoka work on impact
• Blended Value

_________________________________

About the author

The School for Social Entrepreneurs offers tailored support programmes for social entrepreneurs: entrepreneurial people working for social benefit. Over 360 Fellows have now completed SSE programmes across the UK network, and this number is expanding rapidly each year. www.sse.org.uk