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.
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.”
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.
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.
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:
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.
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:
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