More on Social Entrepreneurship
"Social Entreprenurship" can be defined as the art of mission-based venture development. Both traditional and "social" entrepreneurs are risk takers, but the key difference between them is that the traditional entrepreneur risks to receive individual financial rewards, and the social entrepreneur acquires rewards on behalf of the organization that he/she serves. It could be said that social entrepreneurs take risks and receive rewards for "stockholders" and not "stockholders."
The study of social entrepreneurship can focus on several things:
· Introduction to not-for-profit (mission-based) organizations
· Contrasting for-profit and not-for-profit management techniques
· Corporate "Social Responsibility"
· The world of philanthropy (history, current practices)
· Application of business models to community problems
· Using business models to fund nonprofit endeavors
· Social policy issues dealing with the above
The importance of this field is increasing. The economic impact of not-for-profit organizations is very large: there are 1.4 million charitable organizations in the U.S. the number of charitable organizations up 22% from 1989-1998 (if religious organizations are excluded, the number is up 58%) they have total assets of almost $1 trillion they have total expenses of almost $500 billion.
The field is also changing. There is a whole breed of "new philanthropists", represented by such mega-wealthy business leaders as Bill Gates (Microsoft) and Pierre Omiydar (e-Bay). Bill Gates foundation alone is endowed at $21 billion making it the largest private foundation in the world. But it isn't just the level of their donations that makes them "new." These "super entrepreneurs" also want to change the way that philanthropic activities are conducted. First, they want to fund projects that will get at the roots of community problems and they are looking to make the organizations that they support more accountable and "entrepreneurial" themselves. They also enjoy providing "seed money" for new not-for-profit initiatives much as venture capitalists provide seed money for new businesses. There are positive and negative implications to this new form of philanthropy.
There are other social issues to be addressed in a study of philanthropy as it relates to business. For example, what is the role of government vs. the private sector in social welfare, funding for the arts, etc. What are the "obligations" of the wealthy?
A final dimension to be examined is community-based economic development. It represents one possible solution to serious community economic problems such as:
· inner cities experiencing capital outflows
· rural areas which have lost traditional economic base
· third world countries with few business opportunities.
Community-based economic development distinguishes between local control of business and outside control of business. For example, many people are concerned about the wage levels of workers in overseas "sweat shops" owned or patronized by large American corporations. One approach would be to try to eliminate them through boycotts or legal means. Perhaps a better approach (albeit a long-term one) would be to invest funds and train local people to manufacture clothing, export it, and maintain the profits in the community.
Another example is the Initiative for a Competitive Inner City (sponsored by Harvard University and supported by a number of foundations,) which seeks to encourage reinvestment in America's poorest neighborhoods by documenting, through research, the healthy retail and service markets that are currently underserved. Community economic development is about empowerment and control of financial resources in disadvantaged communities.
Why is Ripon College a good place to study social entrepreneurship? First of all, it represents a "different" study of entrepreneurship which could distinguish Ripon from its peers. Secondly, it is another opportunity to promote "service-based learning," by placing students in volunteer roles in nonprofit organizations. Third, student interest seems good. Students can now minor in "Social Entrepreneurship" and the course of the same title will be offered in Spring 2001.