What exactly is social entrepreneurship? Social entrepreneurship happens when people work to develop, fund and implement solutions to social, cultural, and environmental issues with startup companies.

Social entrepreneurs face unique challenges in delivering the social value, returns, and/or impact of the enterprise in addition to commercial value. The four main challenges are:

  1. Funding
  2. Communicating value objectively
  3. Strategy and long-term focus
  4. Remaining true to the mission

Social entrepreneurship is sometimes confused with social enterprise, which refers to companies that apply commercial strategies to maximize improvements in financial, social, and environmental well-being. Social enterprises have both business and social goals and their main purpose is to promote, encourage, and make social change. Meanwhile, in social entrepreneurship, the primary goal is to solve a social, cultural or environmental issue.

While the definitions are similar, the differentiation between the two can be summarized as this: Social enterprise is the vehicle or platform in which social change takes place, while social entrepreneurship is the process by which social change occurs.

Citation:  MACED, Rural Support Partners, and the One Foundation

This graphic depicts the four dimensions of social enterprise: purpose, revenue model, impacts, and market focus.  To help get a better grasp on social enterprise, we can look at two InBIA member organizations that are doing market focus and impact well.

The Center for Nonprofit Support within TechTown Detroit in Detroit, Michigan, exists to assist social enterprises, and it has become a hub for those looking for nonprofit assistance in Southeast Michigan. The center aids the nonprofit and philanthropic community by connecting entities across sectors while accessing the knowledge, skills, and resources needed to collaborate, innovate, and amplify impact.

Under the executive direction of Allandra Bulger, the center has been in operation since May 2018, serving nonprofits across various subsectors throughout their life cycles in conjunction with other partners. Bulger shared two takeaways she has learned from running the center that highlight market focus and audience involvement:

  1. Know your target audience and to engage them early in the process
  2. Look for opportunities to identify and build authentic relationships within your community

“If you think about it[engagement] early on, it can help you strengthen your service,” said Bulger.

It is this engagement that allows an enterprise to really get to know its audience, and Bulger recommends fostering connections by hosting or cohosting events, getting in touch with local business entities, branching out on social media and other technology platforms, and uplifting others in the community.

“My philosophy is of servant leadership. Supporting others’ efforts and collaborating is a great angle to take to highlight yourself within your community,” said Bulger.

The center has a three-pronged vision: place-based collaboration, networking within the ecosystem, and customization to the target audience, which is key.

“What works for us here in Detroit may not work the same for folks over in Boston,” Bulger says.

Finally, Bulger identified the need for a continuous feedback loop of communication and response to improve service by better understanding the audience and to maintain constant engagement with the community. Bulger spoke to this need for interaction:

“The Center is a means for community engagement, to foster and develop relationships.”

The impact dimension of social enterprise is a big part of outreach and finding ways to benefit the community.

A notable example of impact is the Mountain Association for Community Economic Development (MACED),located in Eastern Kentucky. Since 1976 MACED has placed an emphasis on community building, involvement and development, and economical and environmental issues.

Social Enterprise and Consulting Services Manager Ketaki Bhattacharayya shares ways social enterprises can highlight their programs in their community and foster growth:

  • Have a clear vision of desired impacts
  • Set specific and measurable goals
  • Have a strategy from the beginning

“Having a broad mission is great but being able to connect goals to what you want to see in the community is more important,” Bhattacharayya says.

MACED has produced countless success stories over the years by providing manpower and financial support to businesses in and around their community.  Bhattacharayya reflects fondly upon two specific examples of this community impact: Fruits of Laborin West Virginia and the Letcher County Culture Hubin Kentucky. Fruits of Labor is a Nationally Certified Culinary Arts and Agricultural Educational Training Center that serves as an addiction prevention and recovery program for youth and adults, empowering them through agriculture and the culinary arts.  The Letcher County Culture Hub is a growing, diverse network of community-led organizations who work together to build up the local culture and economy.

In addition to projecting and monitoring impact, Bhattacharyya shares a few more best practices for social enterprises.

The first is learning the definition of social enterprise, and how it will come in to play in your own context. “Social enterprise looks different for different people,” Bhattacharyya says, “For me, it is enterprise that uses business disciplines and the power of market demand to create social, economic, and environmental impact for a specific community or region.”

Another important thing Bhattacharyya advises is to avoid being a corporate-style social enterprise. Usually these types of social enterprises can be intimidating to smaller groups and they may unintentionally make them feel irrelevant. “Keep a big tent, be open and accepting, keep yourselves on the community level, don’t be exclusive,” Bhattacharyya says.

One last thing Bhattacharyya recommended was the use of phasing as a form of planning. With phasing, she also stresses the need for balance of revenue and the mission, and the necessity of compromise. “Many times, people want to earn revenue right away, or see community impact right away, but in the beginning there needs to be a compromise of one or the other,” Bhattacharyya says, “You will eventually get there, but in the beginning remember to take things one step at a time.”