MODULE 04
Social Entrepreneurship
Theoretical Background:
Social Entrepreneurship and its Role in Addressing Social Issues
Social entrepreneurship means using business principles and strategies to come up with new and clever solutions for social and environmental problems. The goal is to make a positive impact on society and nature while also making enough money to support the effort in the long run. It is driven by a strong sense of social mission and the desire to make a positive impact on society. Social entrepreneurs often focus on various critical domains, such as economic advancement, educational initiatives, promoting gender parity, enhancing healthcare accessibility, agricultural development, fostering environmental sustainability, promoting renewable energy adoption, and strengthening community progress. These socially-driven endeavors can take the form of non-profit organizations, for-profit ventures, or hybrid entities, also referred to as social enterprises, depending on the preferred business model and funding opportunities. One well-known example for social entrepreneurship is the Grameen Bank, founded by Muhammad Yunus in Bangladesh. According to Dees (1998), Yunus established Grameen Bank in 1983 to provide microcredits to impoverished individuals, especially women, as a means to help them escape poverty and start small businesses. The Grameen Bank's approach to microfinance has been recognized for its transformative impact on poverty alleviation and women's empowerment, leading to Yunus being awarded the Nobel Peace Prize in 2006 (The Nobel Foundation, 2006).
The role of social entrepreneurship in addressing social issues is multi-faceted and essential in driving positive change. Similar to traditional entrepreneurs, social entrepreneurs share the objective of establishing enduring and sustainable businesses. However, the key distinction lies in their primary focus. While entrepreneurs aim to maximize profits, social entrepreneurs prioritize making a positive impact on society. This fundamental difference in their central goals influences various aspects that set them apart from one another. According to Mair and Marti (2006), social entrepreneurship plays a vital role in creating social innovations and novel solutions to complex problems that traditional approaches have not adequately addressed. These innovations often target specific social issues, such as poverty, healthcare access, education, and environmental sustainability, among others. Furthermore, Dacin, Dacin, and Matear (2010) emphasize that social entrepreneurship empowers marginalized communities and individuals by providing access to resources, skills, and support. By doing so, it helps break the cycle of poverty and fosters sustainable development. Social entrepreneurship also contributes to addressing social issues by driving systemic change. According to Nicholls (2010), successful social entrepreneurship initiatives have the potential to scale up their impact and influence policy-making processes, thus creating lasting and meaningful change in society.
Successful Examples of Social Enterprises and Their Impact on Communities
TOMS serves as a prime example of social entrepreneurship, displaying adaptability in its approach. In 2006, TOMS introduced the popular one-for-one model, where for each pair of shoes sold, the company donated a pair to someone in need. Initially, this direct strategy seemed effective in both running a successful business and creating positive change in communities lacking proper footwear. However, over time, experts recognized that simply giving away shoes did not foster sustainable development and may have even negatively impacted local shoe businesses. In response to these insights, TOMS made several adjustments to its giving model throughout the years. Presently, the company sets aside a portion of its profits for grassroots initiatives, collaborating with community organizations and offering cash grants to promote lasting and sustainable change. Learning from TOMS' experience, other businesses, such as Warby Parker, have adopted a similar approach. Warby Parker's one-for-one program, for instance, ensures that for every pair of eyeglasses sold, the company sponsors eye exams and provides affordable eyewear to individuals in need. This exemplifies how social entrepreneurs can evolve their models to create more meaningful and enduring social impact.
Inspired by TOMS' success, Warby Parker launched its "Buy a Pair, Give a Pair" program, resulting in the generous donation of over five million pairs of glasses to those in need by 2019. Additionally, their "Pupils Project," initiated in 2015, collaborates with local government agencies to offer free vision screenings, eye exams, and glasses to school children in New York City and Baltimore. Through these initiatives, Warby Parker has made a significant impact on vision care accessibility and demonstrated the potential of purpose-driven business models to drive positive social change.
Lush, a cosmetics retailer established in 1995, specializes in selling a wide range of products, including soaps, shampoos, creams, shower gels, and lotions, all made from vegetarian and vegan recipes. The company actively advocates for animal rights through various means, such as sourcing products only from companies that do not engage in animal testing or support it in any form. Prior to public release, all Lush products undergo testing on human volunteers, ensuring their safety and efficacy. In 2007, Lush initiated the impactful "Charity Pot" campaign. Within this philanthropic endeavor, 100% of the profits from the sale of Charity Pot products are generously donated to small organizations dedicated to animal welfare, human rights, and environmental conservation efforts. By passionately supporting these causes, Lush demonstrates its unwavering commitment to making a positive impact on the world and aligning its business practices with ethical and compassionate values.
Key Characteristics and Mindset of a Social Entrepreneur
Social entrepreneurs possess a distinctive set of characteristics that distinguish them from conventional business individuals. One crucial trait is their unwavering passion for driving positive social change (Dees, 2001). This passion serves as a driving force behind their entrepreneurial endeavors. Dissatisfied with the status quo, they view problems as opportunities for creativity and innovation, aiming to create sustainable impact (Nicholls, 2006). They seek to find novel solutions to complex social problems, striving to make a meaningful difference in their communities and beyond. Moreover, social entrepreneurs exhibit practical business acumen, enabling them to turn their ideas into reality by considering market demand, available resources, and the local context (Zahra et al., 2009). This business-savvy approach ensures that their initiatives are not only innovative but also viable and effective in addressing social issues. In addition, social entrepreneurs recognize the power of networking and collaboration in their pursuit of social impact. They build strong teams and connect with like-minded individuals, forming strategic partnerships to leverage their collective strengths and resources (Nicholls, 2006). These collaborations amplify the reach and effectiveness of their initiatives, creating a more substantial and lasting impact on society. Furthermore, determination and resilience are fundamental traits exhibited by social entrepreneurs (Zahra et al., 2009). They understand that addressing social challenges often involves navigating through obstacles and facing failures along the way. However, rather than giving up, social entrepreneurs learn from setbacks and use them as opportunities for growth and improvement.
Methods for Measuring the Social Impact of Entrepreneurial Initiatives
There have been several methods/frameworks proposed in the literature to measure the social impact of entrepreneurial initiatives. Some of them listed in Maas and Liket’s chapter (2011) are as follows.
1. Acumen scorecard
2. Atkinsson compass assessment for investors (ACAFI)
3. Balanced scorecard (BSc)
4. Best available charitable option (BACO)
5. BoP impact assessment framework
6. Center for high impact philanthropy cost per impact
7. Charity assessment method of performance (CHAMP)
8. Foundation investment bubble chart
9. Hewlett foundation expected return
10. Local economic multiplier (LEM)
11. Measuring impact framework (MIF)
12. Millennium development goal scan (MDG-scan)
13. Measuring impacts toolkit
14. Ongoing assessment of social impacts (OASIS)
15. Participatory impact assessment
16. Poverty social impact assessment (PSIA)
17. Public value scorecard (PVSc)
18. Robin hood foundation benefit–cost ratio
19. Social compatibility analysis (SCA)
20. Social costs–benefit analysis (SCBA)
21. Social cost-effectiveness analysis (SCEA)
22. Social e-valuator
23. Social footprint
24. Social impact assessment (SIA)
25. Social return assessment (SRA)
26. Social return on investment (SROI)
27. Socioeconomic assessment toolbox (SEAT)
28. Stakeholder value added (SVA)
29. Toolbox for analysing sustainable ventures in developing countries
30. Wellventure monitor
All in all, social impact can be tailored and evaluated based on the specific nature of each social initiative and its alignment with targeted objectives. This assessment should consider not only the direct outcomes but also the soft outcomes, such as improvements in skills, competences, and psychological well-being resulting from the activities of the involved entities. Clearly articulating objectives and aligning actions with the desired impact is crucial in this process, which can be facilitated through logic models, encompassing resources/inputs, activities, outputs, outcomes, and impacts (Hadad & Gauca, 2014).
References:
Dacin, P. A., Dacin, M. T., & Matear, M. (2010). Social entrepreneurship: Why we don’t need a new theory and how we move forward from here. Academy of Management Perspectives, 24(3), 37-57.
Dees, J. G. (1998). The meaning of "social entrepreneurship." Stanford University, Graduate School of Business, Stanford, CA.
Dees, J. G. (2001). The meaning of "social entrepreneurship" (Working Paper No. 01-03). Duke University, Fuqua School of Business.
Hadad, S., & Gauca, O. D. (2014). Social impact measurement in social entrepreneurial organizations. Management & Marketing, 9(2), 119.
Maas, K., & Liket, K. (2011). Social impact measurement: Classification of methods. Environmental management accounting and supply chain management, 171-202.
Mair, J., & Marti, I. (2006). Social entrepreneurship research: A source of explanation, prediction, and delight. Journal of World Business, 41(1), 36-44.
Nicholls, A. (2010). The legitimacy of social entrepreneurship: Reflexive isomorphism in a pre-paradigmatic field. Entrepreneurship Theory and Practice, 34(4), 611-633.
Nicholls, A. (2006). Social entrepreneurship: New models of sustainable social change. Oxford University Press.
The Nobel Foundation. (2006). The Nobel Peace Prize 2006. Retrieved from https://www.nobelprize.org/prizes/peace/2006/summary/
Zahra, S. A., Gedajlovic, E., Neubaum, D. O., & Shulman, J. M. (2009). A typology of social entrepreneurs: Motives, search processes and ethical challenges. Journal of Business Venturing, 24(5), 519-532. doi:10.1016/j.jbusvent.2008.04.007
SOCIAL ENTREPRENEURSHIP 101
LEARNING OUTCOMES
Learners will be able to define social entrepreneurship and its role in addressing social issues.
50 minutes
● Post-it note cards
● Pen/pencil
● Board marker
● Board
Preparation
The video in the pre-activity phase can be downloaded.
Description
Warm up/Energizer:
The trainer clears a space in the room and gather everyone together. S/he asks them to start walking around the room. Then, they sikently choose two people: one they need to stay close to and another they should stay far away from. What happens next is usually quite chaotic and fun. People will laugh and react as they try to balance these two different goals. This game can be played for about 5 to 10 minutes.
Pre-activities:
1) The trainer writes “entrepreneurship” on the board and asks what it means to the trainees. After getting some answers, s/he writes “social” before the previous word and asks what it means. Less answers are expected as it is not as common as entrepreneurship in general. Then in order to learn what it refers to, s/he shows a short animation video about the basics of social entrepreneurship to the trainees.
https://www.youtube.com/watch?v=aTo0qtdVMpM
2) AFFINITY MAPPING
The trainer gives trainees the same question at the beginning: “what is social entrepreneurship?” With the help of the animation video they have watched, the trainees generate responses by writing ideas on post-it notes (one keyword per note) and place them in no particular arrangement on a wall, whiteboard, or chart paper. Once lots of ideas have been generated, trainees begin grouping them into similar categories, then label the categories and discuss why the ideas fit within them, how the categories relate to one another, and so on.
3) When there are a lot of keywords related to social entrepreneurship categorized on the board, the trainer groups the class and asks them to come up with a definition using the keywords on the board. They can only use one keywords from each category and they have to use at least one word from each category.
Main Activity:
The trainer encourages trainees to collaboratively brainstorm and develop creative solutions for a social or environmental challenge, promoting the principles of social entrepreneurship. In order to do this, a 3-step activity is used.
1st step:
Groups come up with some social or environmental challenges that require innovative solutions (e.g., access to clean water, poverty alleviation, waste reduction). The challenges/problems are shared with the whole group at the end.
2nd step:
The trainees discuss in their groups and choose a challenge that resonates with them. They can choose one of the challenges that other groups shared. Within their groups, trainees brainstorm potential solutions to the chosen challenge.
3rd step:
They try to generate a social entrepreneurship idea that serves for the solution to the designated challenge. The trainer joins the group discussions one after the other and makes sure that the entrepreneurship idea is in line with the definition of social entrepreneurship. Final ideas are shared with the whole group and the trainees are encouraged to share their reflections on the ideas.
Post Activity:
The post it notes created in the pre stage are put in a bowl or box. The group is divided into two different groups and Taboo game is played with those keywords without forbidden words. To make it more competitive, time limitation can be applied. The group which has more keywords guessed correctly is the winner.
Learn Check
The trainer summarizes the key points from the affinity mapping and definition formation activities.
S/he emphasizes the multifaceted nature of social entrepreneurship as highlighted by the diverse keywords and categories generated by the participants.
S/he encourages participants to reflect on how their understanding of social entrepreneurship has evolved throughout the session, particularly considering the combination of individual perceptions and the collaborative definition-building process.
Tips for the Trainer
Ensure that each group gets a chance to share their insights and definitions to foster a sense of inclusivity and diverse perspectives.
Prompt participants to think critically about the relationship between the grouped keywords and the overall concept of social entrepreneurship.
Facilitate an open and respectful discussion, allowing participants to explore different interpretations and meanings.
EXAMPLE
SOCIAL ENTREPRENEURSHIP
LEARNING OUTCOMES
Learners will be able to explore successful examples of social enterprises and their impact on communities.
50 minutes
● Print outs
● Cell phones
● Internet connection
● Computer/laptop
● Projector/smart board
● Napkin
Preparation
Printing the handout, arranging the classroom seating, checking internet connection, preparing the Padlet page which should have enough tabs in it for each pair in the group and should be open access to everyone.
Description
Warm up/Energizer:
Human rock, paper, scissors is a typical rock, paper, scissors game but players use their bodies instead of hands to play. First, the trainer encourages the group to choose a pose for each item (like curling up for rock) and s/he splits the team into 2 groups. Then, they face each other and decide their poses for the round. After counting down from 3, both groups do their pose at the same time. Which group has more people after 5-6 rounds is the winner.
Pre-activities:
1) The trainer gives a reading text to the trainees about some examples of social enterprises and their impact on communities. The text can be found in the handout section below.
2) The trainees form two circles, one inside circle and one outside circle. Each trainee on the inside is paired with a trainee on the outside; they face each other. The trainer poses a question about the examples they have read from the list below to the whole group and pairs discuss their responses with each other (The trainees can have their reading handouts with them during the activity). Then the trainer signals trainees to rotate: Trainees on the outside circle move one space to the right so they are standing in front of a new person (or sitting). Now the trainer poses a new question, and the process is repeated.
Adaptability in Social Entrepreneurship:
How did TOMS initially approach their social entrepreneurship model with the "one-for-one" strategy?
What was the intended impact of this approach?
Why did TOMS decide to make adjustments to their giving model? What were the insights that led to these changes?
How does TOMS' evolution in their giving model reflect the importance of adaptability in social entrepreneurship?
Sustainable Impact vs. Short-Term Solutions:
What were the criticisms of TOMS' initial approach of giving away shoes? How did these criticisms highlight the potential downsides of such a strategy?
How does TOMS' shift toward grassroots initiatives and cash grants address the challenges of sustainable development more effectively?
What lessons can other social entrepreneurs learn from TOMS' experience about striking a balance between immediate aid and creating lasting impact?
Impact of Business Model Evolution:
How did Warby Parker draw inspiration from TOMS' one-for-one model and adapt it to their own business in the form of the "Buy a Pair, Give a Pair" program?
What has been the impact of Warby Parker's initiatives on vision care accessibility, and how does it illustrate the potential for evolving business models to drive meaningful social change?
Ethical Business Practices:
How does Lush's commitment to vegetarian and vegan products align with its core values and target audience?
Describe Lush's "Charity Pot" campaign.
What organizations benefit from this campaign, and how does it exemplify Lush's dedication to social and environmental causes?
How can ethical and compassionate values be integrated into a business model, and what benefits might businesses gain from doing so?
Balancing Business Success and Social Impact:
How can companies like TOMS, Warby Parker, and Lush ensure that their social impact initiatives remain genuine and aligned with their business goals?
In what ways can a purpose-driven approach to business positively influence customer loyalty and brand perception?
Can you think of other businesses, beyond the examples mentioned, that have successfully balanced profitability with meaningful social impact? What makes these examples effective?
Challenges and Criticisms:
What potential challenges might arise when businesses try to integrate social impact initiatives into their operations?
In what situations could a well-intentioned social entrepreneurship model inadvertently have negative consequences, similar to TOMS' initial approach with giving away shoes?
How can businesses assess and address potential criticisms and unintended consequences in their social impact efforts?
Main activity:
The trainees are paired. They try to find one more good example by searching on the internet. When they find one, they share the company profile, a brief description of how they contribute to social impact with a few sentences, and perhaps a link to their website on Padlet which is a digital tool for collaborative discussions and content sharing.
Post-activity:
The examples are listed on the board and the same pairs are asked to go over them and form 3 questions about one of them similar to the ones in the pre-stage. The questions then are shared with the whole group and the person who knows the answer should run to the trainer holding a napkin, catch it and answer. The person who can first catch the napkin can only answer the question. Every correct answer equals to one point and the person with the highest point when the questions are over is the winner.
Learn Check
During the main activity, the trainees have researched and shared additional examples of social enterprises.
The trainer asks the following questions in order to have a room for expansion of knowledge:
What insights did you gain from your research?
How does the new example you found fit within the broader landscape of social entrepreneurship?
Tips for the Trainer
Monitor the trainees as they read the handout, check if they have any language related problems.
Use clear instructions for the pre stage in order to prevent chaos as it involves movements.
Encourage open communication and active participation by welcoming questions, discussions, and diverse viewpoints.
THE IDEAL
SOCIAL ENTREPRENEURSHIP
LEARNING OUTCOMES
Learners will be able to understand the key characteristics and mindset of a social entrepreneur.
50 minutes
● Pen/pencils
● Tape
● 3 poster cards
Preparation
No preparation needed.
Description
Warm up/Energizer:
The trainer starts the activity by calling out a body part and a color. The trainees then have to find items in the room that have that particular color and touch it/them with the chosen body part! For instance, if you called out “gray elbow”, people would run around finding something gray to put their elbow on.
Pre-activities:
The human body/brain shaped empty posters are shown to the trainees and the trainer asks their predictions about what these three might refer to and what kind of activity they will have.
Having got their predictions, the trainer gives a handout that has two different lists on. The lists consist of adjectives separately for personality traits and professional traits. The adjectives are both negative and positive. Then, asks their predictions again.
Main activity:
CONVER-STATIONS
This is a small-group discussion strategy that gives trainees exposure to more of their peers’ ideas and prevents the stagnation that can happen when a group doesn’t happen to have the right chemistry. Trainers are placed into 3 groups and are given a discussion question to talk about. The questions are: What are the personality traits of a social entrepreneur? What are the professional features of a social entrepreneur? Who cannot be a social entrepreneur? They discuss about their question in their groups and write their answers on a piece of paper (can be in the shape of a human body or head). They can get help from the lists provided in the pre-stage but they can also use their own adjectives.
After around 3-4 minutes, one or two trainees from each group rotate to a different group, while the other group members remain where they are. Once in their new group, they will discuss a different, but related question, and they may also share some of the key points from their last group’s conversation. For the next rotation, trainees who have not rotated before may be chosen to move, resulting in groups that are continually evolving.
Post-activity:
The 3 posters from the stations are sticked on the board and an open discussion session is started. The words are read aloud by the trainer and trainees are encouraged to explain and expand on the ideas written on the posters.
Learn Check
The trainer summarizes the main points discussed during the post-activity discussion.
S/he emphasizes the diversity of perspectives and ideas that emerged during the Conver-Stations activity.
S/he concludes by connecting the concepts explored to the broader understanding of social entrepreneurship and the traits associated with it.
Tips for the Trainer
Use clear instructions for the while stage in order to prevent chaos as it involves movements.
Encourage open communication and active participation by welcoming questions, discussions, and diverse viewpoints.
SOCIAL IMPACT PROBLEM
LEARNING OUTCOMES
Learners will be able to identify methods for measuring the social impact of entrepreneurial initiatives.
50 minutes
● Cell phones
● Internet connection
● Projector/smartboard
● A ball
Preparation
No preparation needed.
Description
Pre-activity:
Trainees begin in pairs, responding to the discussion question: What is social impact?
Only with a single partner. After each person has had a chance to share their ideas, the pair joins another pair, creating a group of four. Pairs share their ideas with the pair they just joined. Next, groups of four join together to form groups of eight, and so on, until the whole class is joined up in one large discussion.
While-activity:
The trainer indicates that there are several methods to measure social impact of entrepreneurial initiatives. S/he gives the class a list of methods/frameworks and asks them to choose one and search it on the internet. The list of the methods can be seen in the handout section. The trainer can show them on the smartboard or projector. Once they finish their search, the trainer throws a ball to one trainee and s/he explains his/her method. Then the trainee throws the ball to a random person. It goes on until everyone has a chance to speak.
Post-activity:
Everyone sits in a circle, and they discuss if the methods have some common features. If yes, what they are and how they contribute to the measuring of social impact.
Learn Check
The trainees share 3 things they learned, 2 things they found interesting, and 1 question they still have after the session/activity. The trainees draw an analogy or metaphor to explain the concept of social entrepreneurship. For example, "Social entrepreneurship is like a puzzle where business skills connect with social impact pieces."
Tips for the Trainer
Monitoring the trainees while they work individually is crucial.
It is good for the trainer to revise the methods below prior to the lesson.