Social Entrepreneurship Profit Making?
Contents
Introduction 3
Social Entrepreneurship 3
For-Profit and Not–For–Profit Explained 5
Can Social Enterprises Be Profit Making Organizations? 6
Benefits of a For-Profit Structure 9
Challenges of a For-Profit Structure 10
Conclusion 11
References 13
Introduction
The idea of building a commercially profitable business that has a social cause at the core of its mission is gaining in popularity, especially as the need for innovation and sustainability within this sector becomes increasingly important. Many non-profit leaders are considering moving towards this model with the aim of being competitive in the market, which will allow them to address their social concerns in the long-term.
However, as the line between the business and the social sector becomes blurred, skepticism emerges as to whether or not it is appropriate to ‘do well will doing good’. Are social issues better addressed within a non-profit structure, or is it possible to manage a double bottom line with both social and profit goals?
Social Entrepreneurship
A social enterprise can be described as an enterprise that uses a commercial business model to address social or environmental issues such as poverty, drug addiction, homelessness, obesity and environmental pollution. To be a social enterprise, addressing this social or environmental issue must be its primary mission. (Drayton, 2006) This primary social mission clearly differentiates a social enterprise from a commercial enterprise whose primary function is yielding a profit for its stakeholders and which has adopted a triple bottom line strategy of profit, people and planet. (Norman, 2004)
Peter Jones CBE a renowned British entrepreneur and chair of Enterprise UK describes entrepreneurship as “..being about managing and exploiting risk, it’s about being creative and innovative, it’s about challenging ways of doing things” (Jones, 2011)
A Social Entrepreneur will share many of the characteristics of
Introduction 3
Social Entrepreneurship 3
For-Profit and Not–For–Profit Explained 5
Can Social Enterprises Be Profit Making Organizations? 6
Benefits of a For-Profit Structure 9
Challenges of a For-Profit Structure 10
Conclusion 11
References 13
Introduction
The idea of building a commercially profitable business that has a social cause at the core of its mission is gaining in popularity, especially as the need for innovation and sustainability within this sector becomes increasingly important. Many non-profit leaders are considering moving towards this model with the aim of being competitive in the market, which will allow them to address their social concerns in the long-term.
However, as the line between the business and the social sector becomes blurred, skepticism emerges as to whether or not it is appropriate to ‘do well will doing good’. Are social issues better addressed within a non-profit structure, or is it possible to manage a double bottom line with both social and profit goals?
Social Entrepreneurship
A social enterprise can be described as an enterprise that uses a commercial business model to address social or environmental issues such as poverty, drug addiction, homelessness, obesity and environmental pollution. To be a social enterprise, addressing this social or environmental issue must be its primary mission. (Drayton, 2006) This primary social mission clearly differentiates a social enterprise from a commercial enterprise whose primary function is yielding a profit for its stakeholders and which has adopted a triple bottom line strategy of profit, people and planet. (Norman, 2004)
Peter Jones CBE a renowned British entrepreneur and chair of Enterprise UK describes entrepreneurship as “..being about managing and exploiting risk, it’s about being creative and innovative, it’s about challenging ways of doing things” (Jones, 2011)
A Social Entrepreneur will share many of the characteristics of
References: 1. ALISON, (2011), ALISON:Advance Learning Interactive Systems Online, Available From: http://alison.com/ [Last Accessed 10 Feburary 2011] 2 3. Dees, J.G and Anderson, B.B, (2003) For Profit Social Ventures, International Journal of Entrepreneurship Education, Available From:http://www.caseatduke.org/news/documents/DeesAndersonCASE.pdf [Last Accessed 10 Feburary 2011] 4 5. Drayton, B (2006), Bill Drayton Paints a Vision of Changemaking, McKinsey News, Available From: https://alumni.mckinsey.com/alumni/default/public/content/jsp/alumni_news/20060920_Bill_Drayton_Feature.jsp [Last Accessed 10 Feburary 2011] 6 9. Greyton Bakery, (2011), Greyton Bakery, Available From: www.greyston.org [Last Accessed 10 Feburary 2011] 10 11. Jones, P, (2011) Enterprise UK, Available From: http://www.enterpriseuk.org/ [Last Accessed 10 Feburary 2011] 12 13. Norman, W. and MacDonald,(2004) C. Getting to the Bottom of "Triple Bottom Vol. 14, No. 2 pp. 243-262, Available From: http://www.jstor.org/pss/3857909 [Last Accessed 10 Feburary 2011] 14 15. Ransom, D., (2008), “Nonprofit vs. For-Profit Social Ventures”, Entrepeneur, Available From: http://www.entrepreneur.com/startingabusiness/smsmallbiz/article195242.html [Last Accessed 10 Feburary 2010] 16 17. Toms, (2011), TOMS.com, Available From: http://www.toms.com/ [Last Accessed 1- Feburary 2011] 18