Social entrepreneurship is, fundamentally, about using a market-driven business model to address key social and environmental issues. It is an emerging field with diverse and shifting interpretations.
Today, nonprofits are increasingly finding that social entrepreneurship offers the tools and
techniques needed to build capacity and to achieve and maintain long-term financial stability
during times where there are changes in the economic environment. Social entrepreneurship
is a strategic approach that encourages nonprofit corporations to both diversify revenue sources and develop new revenue-generating activities. Through social entrepreneurship, nonprofits across the country are developing new, innovative strategies for meeting their missions by adopting effective business practices that are the backbone of traditional business principles. Foundations that recognize the value of the trend are offering specialized grant and loan funds targeted at enterprise-oriented activities. Nonprofits practicing social entrepreneurship use business-sector disciplines and models within the core mission or program of the organization. For today’s nonprofit executive, the management challenge is to allocate resources strategically and make those resources as productive as possible. Executives find they are able to meet their missions through many different strategies—often using new financial and marketing models—than in the past. Social entrepreneurship can mean starting new endeavors or bringing new fiscal or managerial disciplines to old endeavors.
Social entrepreneurship helps nonprofits to:
● Increase efficiency in all areas
● Conduct rigorous financial planning as a core activity— combining resource development with financial planning strategies
● Develop creative organizational structures and alliances
● Think strategically about competition and collaboration
● Evaluate the need for changes in the nature and skills of internal staff
● Review the need for changes in the nature and skills of the board of directors
● Identify new earned income opportunities that are aligned with mission
● Redefine mission in the context of market research
Why Social Enterprise matters?
- Social enterprise matters because it is focused on making positive change at a time when we desperately need it. Social enterprise is one important tool, among many, that is actively and directly making our world a better place.
- Social enterprise is more responsive. Social enterprise doesn't rely on the shifting priorities of government and major foundations; it gets on with making the change that is needed within a community and (sometimes) grows to affect whole cities, countries, and regions.
- Social enterprise is scalable. Like all businesses, social enterprise has, with investment and sales revenue, the ability to grow to meet needs and priorities of the communities it serves, as opposed to traditional nonprofit programs, which are often limited to the funds available from government and philanthropic funders.
- Social enterprise actively engages stakeholders. Social enterprise gives the people it helps a direct voice in the operation of the business - as owners, employees and paying customers.