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Social entrepreneurship



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Social entrepreneurship

  1. 1. BMG 320: Adam Hargreaves & Becky Knox
  2. 2. OUTLINE • What is Social Entrepreneurship? • What is a Social Entrepreneur? • Financing social enterprises • Attracting skilled workers • Government involvement
  3. 3. WHAT IS ENTREPRENEURSHIP? Process of creating value by bringing together a unique package of resources to exploit an opportunity
  4. 4. WHAT IS ‘SOCIAL’ ENTREPRENEURSHIP So, is Social Entrepreneurship basically entrepreneurship just with a fancy buzzword in front? Or, is ‘Social Entrepreneurship” actually something different?
  5. 5. WHAT IS SOCIAL ENTREPRENEURSHIP? Nonprofits keeping just enough money?
  6. 6. WHAT IS SOCIAL ENTREPRENEURSHIP? Nonprofits keeping just enough money? For-Profits doing things to show they are not evil?
  7. 7. WHAT IS SOCIAL ENTREPRENEURSHIP? Nonprofits keeping just enough money? For-Profits doing things to show they are not evil?
  8. 8. WHAT IS SOCIAL ENTREPRENEURSHIP? Nonprofits keeping just enough money? For-Profits doing things to show they are not evil? Process of creating value through the combination of unique package of resources to capitalize on an opportunity, all of this is in pursuit of Social returns.
  9. 9. WHAT IS SOCIAL ENTREPRENEURSHIP? • Dictionary definition Social entrepreneurship is a process by which citizens build or transform institutions to advance solutions to social problems, such as poverty, illness, illiteracy, environmental destruction, human rights abuses and corruption, in order to make life better for many. • Other definition Bringing non-profit objectives and combining them with commercial entrepreneurship, maintaining the goal of increased social well being.
  10. 10. CHARACTERISTICS OF SOCIAL ENTREPRENEURSHIP • Social Entrepreneurship meets the needs unmet by government or the commercial markets • Social entrepreneurship is motivated by social benefit • Social entrepreneurs usually work with, not against markets.
  11. 11. THE PROCESS OF SOCIAL ENTREPRENEURSHIP 1. Find an opportunity 2. Develop a business concept 3. Figure out what success means and how to measure it 4. Acquire the right resources 5. Launch and grow 6. Attain goals
  12. 12. MEASUREMENT • What is Profit? How is it defined? • How do we count it? • Can we compare investments • What is “social return on investment” for venture philanthropists?
  13. 13. HOW TO FIND SOCIAL ENTREPRENEURSHIP OPPORTUNITIES Three steps: 1. Opportunity: Find something/someone you can use or help 2. Endeavor/enterprise: How you plan on capitalizing on the opportunity 3. Social returns: How will it benefit the community?
  14. 14. EXAMPLE Getting Ex-cons back into the workforce 1. Opportunity: Underused human capital 2. Endeavor: New businesses using ex-con’s in an aggressively faith based setting 3. Social-returns: Less people returning to jail, better neighborhood.
  16. 16. WHY DOES IT MATTER? Citizens with high entrepreneurial orientation + faith in abilities and education + Large ungovernable business opportunities = Citizens of the country willing to meet their own social needs, without an excessive reliance on the government.
  17. 17. THE FIRST SOCIAL ENTERPRISES • Co-operative movement in the 1840’s • Thrift store • Driving school
  18. 18. EXAMPLE OF A SOCIAL ENTERPRISE Behind every social enterprise is a person who has seen a wrong in the world and they have decided to change it.
  19. 19. PRESENT EXAMPLE More then 780 million people are dying every year from consuming unhealthy drinking water. More than: War Hunger Cancer Combined…
  20. 20. SOLUTION? Life straw • A straw that uses advanced hollow fiber technology, which is highly efficient method that requires no chemicals • For every LifeStraw product you buy, one school child in a developing country will be provided with safe drinking water for an entire school year. • 7J-lsZ2f0
  21. 21. LOOKING AT THE THREE STEPS Life straw • Opportunity: Large amount of people do not have access to clean drinking water • Endeavor: create a product that filters water and is easy to ship/produce • Social benefit: Less people will die as a result of access to clean drinking water
  22. 22. A shoe company that offers to give a pair to a child in need for each pair purchased. • To date they have given more then 35 million pairs of new shoes to people in need They have made a lot of money and started improving: • Sight • Access to water • Safe birth
  24. 24. Examples of Social Entrepreneurs
  25. 25. MAGIC JOHNSON • NBA all-star • Developed HIV at the height of his career forcing him to retire • Was an entrepreneur his whole life • Had a passion for DTLA after playing for the Lakers • Sees opportunity where others don’t
  26. 26. MAGIC JOHNSON • Began by opening a Movie theatre in DTLA • Opened many more changing menu to fit demographic • Opened over 105 Starbucks in locations other wise considered undesirable • 2 goals: • Improve community by employment as well as investment in things to do . • Make money • His company “Magic Johnson Enterprises” is now a billion dollar conglomerate
  27. 27. JANE CHEN • Was studying at Princeton • Saw a need for pre mature babies to keep warm and saw a problem in developing countries with unreliable electricity or poor heat lamps to keep the baby healthy • Developed a small sleeping bag like device that will keep a baby warm for 8 hours on a single 30 minute charge • Lowers rate of pre-mature infant deaths
  28. 28. CHALLENGES OF SOCIAL ENTREPRENEURSHIP • Financing • Attracting skilled workers • Legal constraints • Government
  29. 29. FINANCING • How do we finance a Social Enterprise? • Bank loans • Government grants • Crowd funding • Venture philanthropist
  30. 30. BANK LOANS • Less challenging to get loans in developed countries, with strong banking institutions • Hard to convince bank of unusual business structure not entirely focused on bottom line, (higher risk) and can have trouble finding the resources they need to grow through traditional sources • Instead In Canada: • Institution much like a bank but only gives loans to social enterprises – “The social enterprise fund” (Alberta) • “Dragons den style pitch, but for good” • They are able to give out large and micro loans
  31. 31. GOVERNMENT GRANT Can go to you can see a list of grants given by government to Social entrepreneurs. Pros: • Do not have to pay Grants back • Get the government involved in your project Cons: • Difficult to get • Limited number offered • Might not get amount needed through grants alone • May not be grant for your specific business
  32. 32. EXAMPLES OF GOVERNMENT GRANTS Community Business development corporations- social enterprise loan • You could get a loan up to $150,000 to start-up, renovate or grow your social enterprise in rural Atlantic Canada FedNor Innovation fund: • If your business is based in northern Ontario, you could receive funding towards the adoption and commercialization of new technologies IMPLIQ financing • This finance could help start or grow your business in Quebec.
  33. 33. CROWD FUNDING • This style of funding has gained huge popularity since the introduction of the internet. • Very popular style of funding amongst Social enterprises, as people like to feel their purchase is helping and are therefore more likely to spend
  34. 34. PROS OF CROWD FUNDING • Gets your project/product exposed to the market • Good way to receive financing without interest or taking on additional debt • Good way to jumpstart sales for your product • Good way to attract the early movers (innovators)
  35. 35. CONS OF CROWD FUNDING • Margins: Kick starter takes 5% of sales and amazon usually takes 2% on top of that • The all or nothing system is a little confusing • Most successful projects are basically product sales
  36. 36. VENTURE PHILANTHROPIST • Same as a Venture capitalist but with a focus on social improvement Three kinds: Traditional: High engagement grant making Modern: organizations funded by individuals, but all engagement is done by professional staff Partnership model: In which partner investors both donate the financial capital and engage with the grantees
  37. 37. PROS AND CONS OF VENTURE PHILANTHROPY Pros: • Given expert advice • If involved will likely add more money if they see fit • More likely to take risks then a bank Cons: • They may take control • Have different vision for company
  38. 38. BILL GATES • Known as the worlds biggest individual venture philanthropist • Has given 31.6 billion in grants since inception Projects he has funded, you may know: • Khan academy • Gates foundation • Sewage disposal • Advancing farming in Africa
  39. 39. HOW BILL FOUND SMART PEOPLE Used his money to: Setup challenges and competitions and put a large purse up for the person that finds the solution. This technique is effective at getting the sharpest minds to work on solutions to improve the world Does not give handouts, instead educates people on proper techniques to lead to stronger economies
  40. 40. HOW CAN THE FIELD ATTRACT TALENTED WORKERS? • Attack big problems with limited resources • Must attract through offer of meaningful work • “Mass Recruiters” (Drayton) • Social sector lacks talent programs
  41. 41. HOW CAN THE FIELD ATTRACT TALENTED WORKERS? TEACH FOR AMERICA • Social change organization • Redirect talent into public education • Competitive and Prestigious • Enlist Alumni • Frame as challenge • Community of people fighting for justice
  42. 42. HOW CAN THE FIELD ATTRACT TALENTED WORKERS? • Charismatic organization can attract, not retain • Cultural shifts good for Social Organizations • Baby Boomers: “Encore”
  43. 43. FINDING AND RETAINING TALENT ISSUES • “Follow your dreams” vs. Reality • Past: Money or Meaning SOLUTIONS • Must create internal spaces
  44. 44. GOVERNMENT & SOCIAL ENTREPRENEURS WORKING TOGETHER • Historically, suffered lack of respect, trust • Great things could happen… • Social Entrepreneurship provides decentralization • Pilot and Scale theory • Gov’t shift from low-cost to investing • Gov’t gives social entrepreneurs legitimacy in society
  45. 45. HOW CAN SCHOOLS WORK TO NURTURE SOCIAL ENTREPRENEURS? Educators must: • Encourage & structure original ideas • Teach empathy [ex: Roots of Empathy, Toronto] • “Everyone can be a change maker” Need kids who can: • Empathize • Identify Problems • Build Solutions
  46. 46. HOW CAN SCHOOLS WORK TO NURTURE SOCIAL ENTREPRENEURS? • Celebrate youth initiated social change programs • Case studies integrated into classes Important to teach kids: 1. Ideas are valued 2. Ask questions, take initiative 3. Working with others 4. Better to make mistakes than not try
  47. 47. HOW DO SCHOOLS NURTURE SOCIAL INNOVATORS? What is being done at the University Level? • Prestigious schools teaching Social Entrepreneurship • Smaller on-campus initiatives • Grants • ENACTUS in Canada
  48. 48. PHILANTHROPY • Funded movements long before publicly validated • Venture philanthropy/Impact investing How to support social entrepreneurship: • Help engage with businesses and governments • Fund structural support • Help S.E.s work together
  49. 49. GOALS We want to use our research to determine the difference between a successful and non successful social entrepreneurship Then develop a Canadian model: • How we replicate the good? • How do we eliminate the bad?

Editor's Notes

  • Links:
    - Using a drinking straw:

    -Bill gates drink poop:

  • Commercial entrepreneurs tend to stay away from undesirable locations where social entrepreneurs can see the benefit of their business in these locations to improve social well-being .
    Social benefit is more important because they don’t care about things like profit although that can happen it isn't the goal of a social entrepreneur, they measure success by the people the can help
    They work with the market by looking for needs in the market,( unemployment, education) and help those they do not create a need like some commercial entrepreneurs
  • The process for social entrepreneurship is the same as commercial entrepreneurship but there is a difference with step 3 which will be explained on the next slide
  • Profit: We do not necessarily consider profit to be monetary could be getting ex-cons into the workforce is our goal so little profit is ok.
    How do we count it: With monetary goals not being our main priority what do social entrepreneurs count as their profit (# of cons of employed)
    Can we compare investments: With social entrepreneurship its hard to compare investments because demographics may change from area to area (severity of social problem) meaning there may not be as many people needing service in other areas.
  • Environmental factors
    Social climate conductive to social environment
    Political climate that facilitates social innovation
    More developed countries have social entrepreneurship because its possible if people are living in poverty they probably don’t have the means to run a social entrepreneurship

    Availability of financial/nonfinancial resources: Some countries don’t have the level of banking that would allow loans to be given out to social entrepreneurs

    Perturbation of the environment: Cultural change may lead to an opportunity to arise in social entrepreneurship, as countries develop, programs for women can start to be made to improve their education etc.

    Entrepreneurial personality traits: need the drive an entrepreneurial spirit
    Preparation to exploit opportunities: having the proper training to capitalize when an opportunity comes up.


    Sight: TOMS eyewear provides a person in need with a full eye exam by trained medical professionaly
    Helped restore sight fort 275,000 people

    Water: Each bag of TOMS roasting co. coffee provides 140 liters of safe drinking water, a weeks supply, to a person in need.
    Over 67,000 weeks of safe water have been given.

    Safe Birth: Toms bags purchases support our giving partners in delivering the vital materials and training needed to help provide a safe birth regardless of facility
    40 million women across the world gave birth each year without professional help

  • Everything is the same as a normal entrepreneur except they think about, community awareness and social concern
  • Have not found a number to say what percentage of funding comes from each type, in Canada or globally will hopefully be able to get suggestions on it in class on how to find that information
  • Kick starter is the number one crowd funding website

    Create a profile with your business and a video explaining what your project is
    Staff looks at proposal, give pointers and decide weather to approve it and put it on the site
    Project goes live
    If funding goal is not reached no ones credit card is charged and the fund fails
  • The all or nothing system is a little confusing, people forget they funded you and get charged or are expecting a product that they never receive

    Most successful projects are basically product sales: The structure of Kickstarter normally gives different rewards depending on size of donation, some companies Cant keep up with this demand and hurts company more then helps.
  • High engagement: the granter is involved with implementing the grant how its used

    Modern: the Grantor gives his money to a third party who deals with giving it out and deciding what and how to fund organizations
  • Bill gates took a shot at this as well,

    List of how much he has done as a venture philanthropist

  • Competitions
    Create a better toilet
    Process waste
    Next generation condom
  • Ordinary Entrepreneurs building upon a well established model/ S.E. without a roadmap
    Mass Recruiters: Mostly informal
    Social Sector does not have programs yet
  • Regularly recruit on college campuses
    Enlist Alumni: To share experiences (testimonial workshop)
  • The Charasmatic Organization: Mainly financial constraints push workers away
    Cultural Shift: North American college grads more concerned about work-life balance and meaning rather than longevity.
    Encore most rewarding work they have ever done (retirement movement)

  • 20 Percent of students considered business, finance, mg’t “dream job”… 40 % planned to pursue a career (2008)
    ¼ seniors dream of career in arts or service, 1/8 planned to pursue
    Internal spaces for development (CULTIVATE TALENT GARDEN)
  • Government fear is not ineffectiveness but scandals and screw ups (accountability)
    S.E. more of Long Term view of solutions
    Pilot and Scale: took in pilots that looked promising, vamped up with gov’t $$$

    Not my ideas are right but I am willing to try out my ideas
    1 time a month they study baby
    Educators mistakenly value cognitive over emotional learning… Confidence first!

  • As we do for academic achievers (Honor Roll)
    Case studies of Venture, Do Something, Youth Noise
  • Risk
    Less popular investing
    V.P.: loan guarantees, that enable grantees to leverage capital markets, or patient capital investments to fuel growth of proven initiative
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