What is the primary driver of the social entrepreneur?

The primary driver for a social entrepreneur is change. He or she is concerned with issues such as global warming, pollution, and natural resource conservation. Rather than leaving societal needs to the government or business sectors, social entrepreneurs find what is not working and solve the problem by changing the system, spreading the solution, and persuading entire societies to take new leaps.

Should green or cleantech ventures be classified as social enterprises? If so, why?

Yes, they should! Social enterprises are social mission driven organizations, which apply market-based strategies to achieve a social purpose. The movement includes both non-profits that use business models to pursue their mission and for-profits whose primary purposes are social. Their aim is to accomplish targets that are social and/or environmental. Many commercial businesses would consider themselves to have social objectives, but social enterprises are distinctive because their social or environmental purpose remains central to their operation. This brings home my point of why green or cleantech ventures should be classified as social enterprises. Green initiatives often require large changes to existing infrastructure, shifts in human behaviors, etc.; and the fact that they are mostly concerned with the overall well-being of society, classifies it as a social enterprise.

 What are some of the negatives of forming the social venture as a non-profit?

• Creating a nonprofit organization takes time, effort, and money. Because a nonprofit organization is a legal entity under federal, state, and local laws, the use of an attorney, accountant, or other professional may well prove necessary.

• A nonprofit must keep detailed records and submit annual filings to the state and IRS by stated deadlines in order to keep its active and exempt status.

• Although the people who create nonprofits like to shape and control their creations, personal control is limited. A nonprofit organization is subject to laws and regulations, including its own articles of incorporation and bylaws

• A nonprofit is dedicated to the public interest; therefore, its finances are open to public inspection. The public may obtain copies of a nonprofit organization’s state and Federal filings to learn about salaries and other expenditures.

Why do stakeholders view the social venture differently from a traditional venture?

Since the social need being redressed is the primary driver, everything else feels more intense. Stakeholders both external and internal to the venture tend to view the social venture as more than just a company. They view the social venture as a change agent that can impact the world for the better. The primary goal is not to make money, but rather change.

What are some of the growth challenges of a social venture?

1. With growth come the stresses on the ability of the venture to communicate internally
2. It runs the danger of starting to appear to its employees as just another company
3. Keeping the employees motivated and informed about how to keeping the mission alive
4. The conflict of hiring followers or employees who will see themselves as just employees

The differences between Social Entrepreneurship, Corporate Social Responsibility, and Philanthropy: 

Philanthropy and corporate social responsibility are closely related concepts in that philanthropy is a slice of the bigger corporate social responsibility pie. When integrated into a company’s mission and used to guide a company’s actions, corporate social responsibility can benefit the communities it serves, the company itself and its employees.

Corporate social responsibility not only deals with corporate philanthropy, but also other issues that affect the environment, consumers, human rights, supply-chain sustainability and transparency for the greater good of the world at large. Businesses that integrate social responsibility into their missions acknowledge that their business processes have an impact beyond the company. Therefore, they address issues like philanthropy, environmental-impact assessments and providing good working conditions.

Social entrepreneurship is different in the sense that the entrepreneur makes “the change” his or hers primary goal for the business, whereas CSR is just a part of the overall business – usually an expense for the company. Philanthropy is something the company can stress within the company to its employees.

The differences between Social Entrepreneurship and Business Entrepreneurs

Perceptions of Value

For the business entrepreneur, value lies in the profit the entrepreneur and investors expect to reap as the product establishes itself in a market that can afford to purchase it. The business entrepreneur is accountable to shareholders and other investors for generating these profits. To the social entrepreneur, there’s also value in profits, as profits are necessary to support the cause. That said, value for the social entrepreneur lies in the social benefit to a community or transformation of a community that lacks the resources to fulfill its own needs.

Approach to Wealth Creation

Although the business entrepreneur and the social entrepreneur are similarly motivated to change the status quo, their missions differ significantly. The business entrepreneur is driven to innovate within a commercial market, to the ultimate benefit of consumers. To the social entrepreneur, wealth creation is necessary, but not for its own sake. Rather, wealth is simply a tool the entrepreneur uses to effect social change. The degree to which minds are changed, suffering is alleviated or injustice is reversed represents the organization’s success.

Real Case

Volkswagen has been cheating in emission tests by making its cars appear far less polluting than they are. The US Environmental Protection Agency discovered that 482,000 VW diesel cars on American roads were emitting up to 40 times more toxic fumes than permitted – and VW has since admitted the cheat affects 11 million cars worldwide. It means far more harmful Nix emissions, including nitrogen dioxide, have been pumped into the air than was thought – on one analysis, between 250,000 to 1 million extra tonnes every year.

If VW had some sense of CSR, this would never had happened!