If you've ever wondered about these questions, Melissa L. Bradley is the perfect person to provide the answers.
Melissa is the Director, Entrepreneurship & Innovation Initiative at Kogod Business School, American University. She has been a successful serial social entrepreneur, recognized by Do Something and was a Draper Richards and Soros Fellow; she has been a professor on this topic for over 10 years.
In conversation with MBA Crytal Ball, Melissa shares insights about the concept, why it's creating a buzz, and how you can be part of it.
What is Social Enterprise?
Meaning, purpose and examples
How would you define a Social Enterprise?
Melissa L. Bradley: While there are various definitions, I define social enterprise as the intention of a venture to become financially sustainable and generate social impacts through its operations.
It is important to note that this definition is agnostic of organizational structure. Despite popular belief, a social enterprise can be a for profit or nonprofit entity.
Second, there is an intention at the onset of operations to do good; it is part of the values of the enterprise. In addition, this definition is explicit about financial sustainability.
This does not mean that the entity has to be for profit, but it does have to have a diversified revenue stream and a plan to be sustainable over a long period of time in order to actualize the intended social impact.
Why is the concept so popular?
Melissa: Recently the interest in social enterprise is driven by three key factors.
The first is that consumers in general are more interested in making a positive difference, as the magnitude of social problems continue to grow globally. More specifically statistics show that consumers committed to healthy communities represent over $200B in consumer spending.
In addition, millennials are much more mindful of the impact they have as individuals, as well as the companies they patronize. Data shows that more than 85 percent of millennials correlate their purchasing decisions and their willingness to recommend a brand to the social good efforts a company is making.
Finally, social entrepreneurship is popular because there are now explicit organizational structures that allow a company to embed social values in the DNA of the company. The legislative push to create Benefit Corporations, and the rise of L3Cs, is allowing entrepreneurs to not just talk about making a difference but structuring their companies to explicitly pursue social goals.
What are some good examples of social entrepreneurship?
Melissa: There are many examples of social entrepreneurship globally. For enterprises that are nonprofit, examples include:
- Accion – uses Microfinance to make the world more financially inclusive and provide high-quality, affordable financial services to everyone.
- OneWorld Health – has been working on providing safe and effective new medicines for diseases that disproportionately affect those with resource constraints.
- Kaboom – non-profit works with kids (specially those from low income families) in America and brings balanced and active play into their daily lives.
- VisionSpring – trains Vision Entrepreneurs to run a microfranchise and conduct vision camps and sell glasses in several villages.
- Greyson Bakery – is a for-profit company that makes baked goods and brownies and uses the uses the income to help local social service initiatives in housing, health care and education.
- Ben & Jerry’s Ice Cream – a for profit company that has an independent board of directors who are committed to its social mission, brand integrity and product quality, by providing social mission-mindful insight and guidance to ensure they are making the best ice cream possible in the best way possible.
Melissa: Since a social enterprise is a business with a heart, many of the skills are similar to a traditional business.
More specifically, you need to be a strategic thinker, understand the numbers and financial statements, have outstanding people and communication skills, and be able to execute effectively and listen to others.
With respect to successfully advancing a social mission, an entrepreneur must be culturally competent to understand the community and/or beneficiaries for whom the social impact is intended.
You also need solid analytical skills to be able to qualitatively and quantitatively track and document your social impact. Finally, you must be compassionate and exhibit empathy for all of your stakeholders.
What are the typical jobs associated with social entrepreneurship?
Melissa: Social enterprises can be large or small. The range of jobs will often vary based on sector, size and geography. The typical jobs include:
- CFO or Finance Director
- Operations Director
- Technology leader
- Human Resources Director
- Program Directors
- Development Officers, responsible for fundraising
- Support Staff to help clients, board of directors and senior leadership
Why is social entrepreneurship relevant & important to students?
Melissa: Statistics show that younger generations are much more mindful to the pressing problems of the world. They are less concerned with making millions and more concerned with making a difference.
The world of social entrepreneurship provides a unique opportunity for MBA students to be able to do both - do good and get paid.
New and established social enterprises are rapidly expanding and recognize the need for MBA students to bring their expertise and academic training to the social sector.
The expanding world of social entrepreneurship is also permeating the private sector as major investment banks, fund managers, consumer companies and others begin to think about their impact in local communities and the environment.
The role of social entrepreneurship in academic training will be a valuable skill in many future career pursuits.
Closing thoughts on the topic
Melissa: As we see the continued increase of major social problems all over the world, the ability of one sector or a single set of organizations to make a difference will continue to diminish.
It will take all types of enterprises and all sectors - public, private and social - to be intentional about having a social impact in the world.
I believe there will be an increase in jobs in the public and private sectors for individuals who are able to develop solutions to real social problems that can be financially sustainable.
I also believe there will be a need for more social entrepreneurs and intrapreneurs around the globe, and increase the need for individuals to understand the opportunity and complexities inherent in running a financially sustainable and socially impactful business.
This article was written for MBA Crystal Ball by Sharmila Chand, a senior freelance journalist who has been writing for various national and international publications.