Social Entrepreneruship

Burton D. Morgan Center for Entrepreneurship

Social Entrepreneurship – Costa RicaEARTH University

May 18 – June 10, 2009

Copyright© 2009 Nancy Clement-Purdue University

[email protected]

765.494.9884

Nancy Clement

Overview

• Entrepreneurship/Philanthropy/Social Entrepreneurship• Entrepreneurship/nonprofit/Social Enterprise• Statistics on Nonprofits• Pioneers in Social Entrepreneurship• Why Social Entrepreneurship?• Why Social Entrepreneurship?• Social Enterprise • Types of Business for Social Enterprise• Examples

Entrepreneurship – The process by which one organizes, manages, and assumes the risks of a business or enterprise for personal gain.

Philanthropy – Giving to promote human welfare, without expectation of receiving something in return.

Defining

Social Entrepreneurship –The art of simultaneously pursing both a financial and a social return on investment.

something in return.

EntrepreneurQualities of an

competitioncompetition

competitionCOMPETITION

competition

• Sees Opportunities

• Risk Taker

• Accepts Responsibility

• Make Money

• Wants to be Rich

2009 copyright nancy clement

IP

• Wants to be Rich

• Protects IP

• Aspires towards IPO

• Independent

• Own Boss

• Maintains Control

IP

IP

• Sees Opportunities to Improve the Lives of others

• Risk Taker

• Accepts Responsibility

• Make Money for Sustainability of Mission

Social Entrepreneur

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IP

IP

IP

IP

IPIP

IP IP

• EnRiches others

• Shares Protected IP

• Aspires to Achieve IPO - Community Wide

• In dependence with Others

• Boss of Own Destiny

• Relinquishes Control

Entrepreneurship /Nonprofit Organizations / Social Enterprise

“Entrepreneurship is the essence of free enterprise because the birth of new businesses gives a market economy its

vitality.” (Bygrave, 2004)

Social service spending make up about

Social Enterprise is a combination of free enterprise and the “love of mankind.”

Social service spending make up about 15% of the GDP and 2/3 of the Federal

Budget. (2007 US Census)

*Number of Nonprofit Organizations in the United States, 1996 - 2006

1996 2006

# of Orgs % of Orgs

# of Orgs. % of Orgs

change

All Nonprofits Organizations 1,084,939 100% 1,478,194 100% 36.2%All Nonprofits Organizations 1,084,939 100% 1,478,194 100% 36.2%

501(c)(3) Public Charities 535,930 49.4% 904,313 61.2% 68.7%

Private Foundations 58,774 5.4% 109,852 7.4% 86.9%

* IRS Business Master File 01/2007 –National Center for Charitable Statistics

Pioneers for Social Entrepreneurship

• William Dryton founded Ashoka 1980 (international)

• Gregory Dees – 1989 Duke University “the meaning of social entrepreneurship.” (www.fuqua.duke.edu) (non-profit)

• Skoll Foundation was created by Jeff Skoll in 1999 to pursue his vision of a world where all people, regardless of geography, vision of a world where all people, regardless of geography, background or economic status, enjoy and employ the full range of their talents and abilities.

• Schwab Foundation – 2000 – Applying practical, innovative and sustainable approaches to benefit society, with and emphasis on those who are marginalized and poor.”

• Muhammad Yunus – 2006 Nobel Peace Prize for Social Entrepreneurship (Grameen Bank-international)

Why Social Entrepreneurship?

• Creates a process that encourages change, both economic and social, through leadership and business practices while maintaining the focus on the organization’s mission.

• Provides income opportunities for many people • Provides income opportunities for many people held in the grips of poverty.

• A process by which nonprofit organizations explore income generating businesses that provide sustainable income and focus on the double bottom line”.

Social Enterprise

• May be a for-profit company that has incorporated a social mission into their way of doing business.

• May work directly with a non-profit organizations.

• May have a legal agreement which secures an income stream to a non-profitstream to a non-profit

• May provide a service that enhances the non-profits mission.

• May have an environmental mission.

Types of Businesses for Social Enterprise

Social Corporate Responsible Business

• Limited Liability Company (or Partnership)– Lowprofit Limited Liability Companies (L 3C)– Lowprofit Limited Liability Companies (L C)

• Corporations:– C-Corporation– S-Corporation– B-Corporation

ExamplesSocial Enterprise

Newman’s OwnBen & Jerry’s Greyston BakeryGoodwill IndustriesGoodwill IndustriesUniversity Research Private Foundations

Jerry Greenfield explains “It’s not that business is evil or bad, it is mainly without values.” He stresses that business values should be socially

conscious or mission-based.

The Purdue Series on Corporate Citizenship and Ethics-November 29,2005

Examples cont’d

Goodwill Industries –

Social Mission with a Retail Store?

Retrieved from - http://www.goodwill.org/page/guest/about/whatwedo

Retail Store with a Social Mission?

Retail Store?

Examples cont’d

Stonehenge Limited

"tie one on" before driving. Support of MADD and its efforts to change America's attitude toward drinking and driving, introduced "The Molecular Expressions™ Cocktail Collection Molecular Expressions™ Cocktail Collection men's neckwear. Recreate the molecular structures of alcoholic beverages.

Examples, cont’d

“Tufts will not lend money directly to

eBay founder donates $100 Million to Tufts University for social entrepreneurship

“Tufts will not lend money directly to entrepreneurs. Instead, it will make a variety of large investments, mostly loans at first, in private partnerships and investment firms. They, in turn, will support as many as 10,000 non-profit and for profit groups.”

Source USA Today, November 4, 2005

Personal Note

Social Entrepreneurship is the humanitarian side of

sustainability.