Social Entrepreneurship 101: A Guide to the Mission-Driven Business Sector
With seemingly endless options available to today’s consumer, it’s no longer enough for a business to offer the lowest price or the highest quality product. While those are obviously influential factors, studies have shown that consumers prefer to give their business to organizations that are also socially responsible.
There is an important difference, however, between corporations that donate to charity or give back to their communities, and businesses that have made social responsibility their mission and guiding light. Businesses that fall into this category practice what is known as social entrepreneurship, and they are becoming more profitable and popular than ever before.
Curious about social entrepreneurship? Explore our introductory guide and learn more about how you can establish and build a company that performs well and does good.
What is Social Entrepreneurship?
The U.S. Chamber of Commerce defines social entrepreneurship as “the process by which individuals, startups and entrepreneurs develop and fund solutions that directly address social issues.”
What Is a Social Entrepreneur?
A social entrepreneur, then, is someone who starts and builds a business that prioritizes the greater good. That is not to say that social entrepreneurs don’t care about profits, because of course they do, but they care just as much about pursuing solutions that solve social and community problems and effect positive change. To further that mission, social entrepreneurs oftentimes use tools like impact investing and conscious consumerism.
Social Entrepreneur vs. Entrepreneur
There are slight differences between social entrepreneurs and entrepreneurs, but it ultimately boils down to one primary difference: the end goal. Traditional entrepreneurs are typically most interested in profits and growth, as they are trying to satisfy investors and ensure long-term financial prosperity. Conversely, socialpreneurs are primarily focused on how their business operations allow them to focus on their social endeavors.
7 Business That Practice Social Entrepreneurship
There are a number of companies — large and small — that are widely known, largely successful, and that practice social entrepreneurship. Here are several brands you might recognize:
Warby Parker: Eyewear manufacturer Warby Parker is known for their online eyewear store, but they are equally notable for their buy a pair, give a pair program. According to their website, for every pair of Warby Parker glasses purchased, a pair of glasses is distributed to someone in need. There are two models we they employ:
Empowering people to administer basic eye exams and sell glasses at ultra-affordable prices.
Directly giving vision care and glasses to those in need, via cross-sector partnerships.
Ben & Jerry’s: Arguably the most popular ice cream corporation, Ben & Jerry’s was founded with social responsibility as their primary focus. “We seek in all we do, at every level of our business, to advance human rights and dignity, support social and economic justice for historically marginalized communities, and protect and restore the Earth's natural systems. In other words: we use ice cream to change the world.” Guided by this mission, Ben & Jerry’s uses their profits and notoriety to support causes they believe in that align with their core values.
FIGS: Healthcare apparel manufacturer FIGS was created with a focus on making more comfortable and better performing scrubs for health providers. Since their founding, FIGS has operated their Threads for Threads program, which donates scrubs to health care professionals who work in resource-poor countries and lack the proper uniforms to do their jobs safely for every pair of FIGS purchased.
Love Your Melon: You’ve probably seen their beanies, but Love Your Melon was founded with a singular mission: “Founded in an entrepreneurship class at the University of St. Thomas in St. Paul, Minnesota by two friends, Zachary and Brian, who wanted to start a business with a meaningful and positive social impact. On a mission to improve the lives of children battling cancer since October 22nd, 2012, Love Your Melon began with the simple idea of putting a hat on every child battling cancer in America.” Today, Love Your Melon donates 50% of their net sales profits to nonprofits that help to fight pediatric cancer.
Lush: Lush is a high-end cosmetics company that sells handmade, vegetarian and cruelty-free products. They also only work with fair trade suppliers for everything from their ingredients to their packaging. While those efforts help improve their carbon footprint and promote clean ingredients, Lush also actively gives back via the Charity Pot grant program, which supports global initiatives that align with their mission.
Uncommon Goods: Online retailer Uncommon Goods started their Better to Give Program in 2001. Their mission states, “as an independently owned business, we have the freedom to support causes we believe in and to impact the world in a positive way. Giving back is important to us and we want to share that passion with you. Through our Better to Give program, we’ve been able to build a better business by connecting customers with nonprofit organizations across the globe. With every purchase you make, we’re proud to donate $1 to a Better to Give partner of your choice.”
TOMS: Since their founding, footwear company TOMS has been driven by their mission to make an impact on people and the planet. TOMS invests 1/3 of their profits for grassroots good, including cash grants and partnerships with community organizations, to drive sustainable change. They are also a Certified B Corporation™, which means they meet the highest standards of social and environmental performance, transparency and accountability.
4 Must-Know Social Entrepreneurs
It’s not just companies that practice social responsibility — there are a number of individual social entrepreneurs who have founded and/or invested in organizations that are making a real difference in the world. Here are a few you should know.
1. Bill Drayton
Bill Drayton founded Ashoka: Innovators for the Public, which works to identify and support social entrepreneurs around the world. Since its founding in 1980, Ashoka has worked with over 400 fellows in over 95 countries to support their endeavors to make the world a better place.
2. Muhammad Yunus
Grameen Bank (now the Grameen Foundation) founder Muhammad Yunus is such a dedicated social entrepreneur that he was awarded the Nobel Prize for the organization’s work. Grameen Bank is a microfinance organization that gives small loans, primarily to women, to help them get out of poverty. Since its founding, Grameen Bank has supported 9.31 million borrowers.
3. Jacqueline Novogratz
Jacqueline Novogratz founded her company Acumen in 2001, which uses patient, or long-term capital to helps fund businesses who have a focus on providing solutions to social issues. Their goal is to invest “Patient Capital” to bridge the gap between the efficiency and scale of market-based approaches and the social impact of pure philanthropy.
4. Blake Mycoskie
TOMS shoes founder Blake Mycoskie started TOMS with the mission to donate one pair of shoes for every pair that is purchased. That initiative expanded into their current “One-For-One” campaign that supports water, sight, birth and anti-bullying initiatives. Through TOMS, Mycoskie has donated 95 million pairs of shoes, 722,000 weeks of safe water and helped 780,000 people through free glasses or surgeries.
How to Get Started in Social Entrepreneurship
If you’re an aspiring entrepreneur, or a business owner who is looking to use your business to make a difference, consider social entrepreneurship. While many of the same common business practices apply, there are certain elements that are specific to this field such as:
One of the best ways to master these concepts is with an introductory course, or even a series of courses in an accredited social entrepreneurship program. At the University of San Diego Division of Professional and Continuing Education, we offer a Social Entrepreneurship in Action Certificate that covers all the elements of social entrepreneurship. Our program is available online in a flexible schedule, leaving you time to work on your new business while learning the fundamentals you will need to be successful.
If you’re looking for more informal, introductory information before you dive into a formal program, check out these free resources about social entrepreneurship: