Interesting post I found by David Galipeau, entitled social entrepreneur 2.0. In it, he says the following:

“Despite efforts to spread an innovation-based definition, far too many
people still think of social entrepreneurship in terms of nonprofits
generating earned income. Too bad. This shifts attention away from the
ultimate goal of any self-respecting social entrepreneur, namely social
impact and focuses it on one particular method of generating resources.”

Also, he goes on to say:

“But now the focus has shifted from social impact – a hard indicator to measure – to earned income.This is only a means to a social end and it is not always the best means. It
can even be detrimental – taking valuable talent and energy away from
activities more central to delivering on an organization’s social
mission.Though it is very popular right now, it is just one
funding strategy among many and must be assessed on a case-by-case
basis. The key is finding a resource strategy that works.”

Which is pretty hard to argue with, really. When we’re helping students develop their projects here, we encourage them to decide what streams of income (or funding strategy) is most viable, what kind of governance they think would suit them (and the organisation), and what their thoughts are into the future. Does the organisation need to scale up, or is it fit to a specific local problem? Does the organisation need to exist beyond a certain time, or will it have served its purpose? All of these questions go into deciding which structure and strategy to take.

As David Galipeau’s post elucidates, the ultimate bottom line should be the social one: earning income and making a profit/surplus (or being sustainable) is only useful if the project is still having the social impact intended, otherwise earning income could potentially be a distraction, and even divert (all types of) resources away from where they are needed most.bolsos replicas

Always a thorny issue, this one…we’ve been amassing a few different definitions in SSE’s del.icio.us, so you can check out there for starters. The SSE expounds its version here, which includes the following:

"A social entrepreneur is someone who works in an entrepreneurial manner, but for public or social benefit, rather than to make money. Social entrepreneurs may work in ethical businesses, governmental or public bodies, quangos, or the voluntary and community sector.
      

While
entrepreneurs in the business sector identify untapped commercial markets, and gather together the resources to break into those markets for profit, social entrepreneurs use the same skills to different effect. For social
entrepreneurs, untapped markets are people or communities in need, who
   haven’t been reached by other initiatives.

But
while they may read from a different bottom line, social and business
entrepreneurs have a lot in common. They build something out of nothing.They are ambitious to achieve. They marshal resources – sometimes from
the unlikeliest places – to meet their needs. They are constantly creative. And they are not afraid to make mistakes.The most successful embody
a curious mixture of idealism and pragmatism – high-mindedness wedded
to hard-headedness."

An interesting facet of the UK world of social entrepreneurship is that "social enterprise" has come to be more about models, structures, and markets, whereas social entrepreneurs are actually least interested in this area; as Alliance magazine’s excellent article makes clear:

"The organizations set up by social entrepreneurs defy pigeonholing.
They cannot be lumped easily into the non-profit or for-profit worlds
that we cling to. Increasingly, social entrepreneurs are setting up
their organizations as for-profit entities, though most are still
constituted as not-for-profits. The point is that the legal form chosen
for the entity is simply a strategic decision based on how best to
achieve the mission."

SSE certainly views entrepreneurialism as being as much about a mindset, an attitude, and a set of characteristics (driven, committed, engaged with comunity they are serving, innovative, prone to action, hard-headed and high-minded….) as it is about a business model. An unconstituted community group with no earned income can be as entrepreneurial as a community interest company with a public service delivery contract. A for-profit company with a clear social objective can make greater social change than a co-operative or a charity with a trading arm.

This is not to say that the processes aren’t important; having those structural and financing options means that social entrepreneurs can find the best fit for their organisation or initiative; and having the ear of government (and the opposition!) certainly does no harm. But we must shape the solutions to fit the problems, not decide on the shape first…Often there is an earned income / trading side to these solutions, but not necessarily.

My favourite definitions of a social entrepreneur?

– "The changers of minds and the breakers of rules" (Gordon Brown);

– "The entrepreneur always searches for change, responds to it, and
exploits it as an opportunity" (Peter Drucker; add social where applicable)

– "a mover and a shaker, the motor of social transformation" (from Alliance article)

– "What business entrepreneurs are to the economy, social entrepreneurs
are to social change. They are the driven, creative individuals who
question the status quo, exploit new opportunities, refuse to give up,
and remake the world for the better." (David Bornstein)

…of value. A recurring theme at the recent Skoll forum was that, in order for funders from the more corporate philanthropy / (forward-thinking) asset management to invest, they need to see clear evidence, and understandable data, of value. Ultimately, the thinking is that we should judge social entrepreneur-led organisations by their quality (by their outcomes) rather than their business structure or model (their process).

Their follows an interesting debate about whether we can translate the terminology of the business world into the world of social entrepreneurship: so rather than financial return on investment, there is social return on investment; rather than profit-led organisations, there are non-profits, not-for-profits or, increasingly, ‘beyond profit’ or ‘more-than-profit’ organisations.

The value debate is of interest to SSE because our students, who range from 18 to 80 and are leading a whole range of different organisations with different aims in different areas, are increasingly realising the need to effectively measure and evaluate their work. Do these kinds of models have relevance for them, or do they overcomplicate and confuse? Similarly, for ourselves, how can we best measure what SSE contributes to helping individuals make social change.

Some interesting places to start in this world:

– Blended Value
– New Economics Foundation (SROI)
– Roberts Enterprise Development Fund
– Charities Evaluation Service

This is something we’ll revisit, as it is an area of increasing relevance to social entrepreneurs, cutting across sectors and, therefore, coming up against different sectors rules and demands.