What is Social Entrepreneurship?
Reviewed by Jacob Imm
May 26, 2023
What is Social Entrepreneurship?
Do you have an idea for a profitable business? Maybe an innovation that could shake up an existing market or create a new one altogether? That’s fantastic—you’re already on your way to becoming an entrepreneur, being your own boss, and (hopefully) earning a considerable income.
However, what if you also want to help others? Perhaps creating ever-increasing wealth and stock value isn’t your priority, and making a difference in the world is.
If that concept piques your interest, social entrepreneurship may be for you. But what is social entrepreneurship, exactly? And how do you know if it’s the right path? In this brief guide, we’re demystifying the notion of doing business for a cause.
Social Entrepreneurship 101
Social entrepreneurship is one of the best degrees for entrepreneurs that combines two concepts that are often disconnected–entrepreneurialism and social consciousness.
Entrepreneurs are people who start their own businesses. As their companies grow, entrepreneurs often work to maximize profits for their investors and shareholders. In many (but not all) cases, this drive for profitability becomes the only objective, and anything that doesn’t generate revenue—like giving back—falls off the radar.
That’s where the social part comes in. Social entrepreneurship seeks to turn the reality of modern capitalism into a catalyst for positive change. While social entrepreneurs still endeavor to make money, they use some or all of that money to further a philanthropic cause, such as:
- Ending poverty
- Combating climate change
- Improving animal welfare
- Feeding the hungry
- Supporting refugees
Many social entrepreneurs run Certified B Corporations, adhering to rigorous standards that cover charitable giving, employee benefits, and supply chain transparency (B Lab). However, social enterprises don’t have to be official B Corps; owners can focus solely on supporting their chosen humanitarian mission.
The Different Types of Social Entrepreneurship
Although all social entrepreneurs work to support important causes, there are several different types of social entrepreneurship. According to the Organisation for Economic Co-operation and Development (OECD), social enterprises exist “in a spectrum ranging from for-profit to non-profits.”
So, what are the four types of social entrepreneurship? Let’s take a closer look at each one:
- Non-profit social entrepreneurship – Non-profit social entrepreneurs work to support a charitable mission anywhere in the world. Like traditional entrepreneurs and for-profit businesses, these enterprises try to maximize profits. However, non-profits reinvest any profits into their business to make an even bigger impact in the future.
- Community social entrepreneurship – Community social entrepreneurs focus their efforts on a specific region—usually, the one in which the owner lives. These entrepreneurs use their profits to improve conditions in their local community.
- Transformational social entrepreneurship – As social enterprises grow, they can reach a larger audience and have a more substantial social impact. A transformational social entrepreneur may begin by supporting their communities, but they often end up reaching people all over.
- Global social entrepreneur – Global social entrepreneurs don’t separate the world into territories—they see our planet as one interconnected community. These entrepreneurs tackle social issues that transcend borders, including poverty, access to healthcare, and mental health.
How to Know if Social Entrepreneurship is Right For You
In theory, social entrepreneurship sounds like a win-win. Helping others while running a business—what’s not to love? However, social entrepreneurship may not be for everyone. Here’s how to determine if you should become a social entrepreneur.
You Have a Product or Service to Sell
First and foremost, if you want to be an entrepreneur, you need an idea for a social business. Entrepreneurs identify gaps in the market, then create products or services that address these gaps.
But having an idea isn’t enough—it needs to be a profitable idea. Even though maximizing revenue isn’t your sole motivation, you’ll still need money to fund your mission. If your product or service isn’t desirable, you won’t be able to raise the capital required.
You Have Passion for an Important Cause
To succeed as a social entrepreneur, you’ll need a cause that matters to you. If you’re not passionate about your enterprise’s mission, you may find it challenging to stay motivated. And entrepreneurs need plenty of motivation, especially in the start-up phase.
Many social entrepreneurs support causes that are near and dear to them, but that doesn’t always have to be the case. All you need is a mission that ignites your passion.
You Don’t See Wealth as the Ultimate Indicator of Success
Because profit isn’t the be-all and end-all of a social enterprise, social entrepreneurs should accept that their business may not make them rich.
If you run a social enterprise, chances are you’ll never be the CEO with a private jet and a yacht. However, if you work hard, you can still earn enough to live comfortably—all while making the world a better place.
Start Your Journey as a Social Entrepreneur
Social entrepreneurship is a best-of-both-worlds movement that allows innovators and aspiring business owners to effect lasting positive change. If you hope to make a difference in your community, your state, or the world, starting a social enterprise may be for you.
For many, becoming a social entrepreneur begins with a social entrepreneurship program at a school like North Central College.
As a social entrepreneurship major, you’ll cover business fundamentals like marketing, finance, and law, along with social issues like equity and sustainability. By the time you graduate, you’ll be prepared to run a business and change the world.
Jacob Imm is the associate director of communication in the North Central College Office of Institutional Communication. He has 13 years of collegiate communications experience and has worked with hundreds of college students. He has a bachelor’s degree from the University of Notre Dame and a master’s degree from Northern Illinois University.
Sources:
B Corp certification demonstrates a company's entire social and environmental impact. B Lab. (n.d.). Retrieved February 16, 2023, from https://www.bcorporation.net/en-us/certification
Social entrepreneurship & social enterprises. OECD. (n.d.). Retrieved February 16, 2023, from https://www.oecd.org/cfe/leed/social-economy/social-entrepreneurship.htm