Entrepreneurs are represented as cut throat, ultra competitive people who only care about their own profits and their own success. While this may be true for some people, there are certainly some entrepreneurs who want to give back to society, who want to make sure that people in society get something out of the business or firm or whatever they establish. These are social entrepreneurs.
Social entrepreneurs make use of the technology and resources available to them to find solutions to social problems. Conventional entrepreneurs would measure success in the amount of money they make, but social entrepreneurs measure success in return to society. They are typically associated with the voluntary sector. For some social entrepreneurs, profit is also a driving force, but not the only one.
While talking about social entrepreneurs and social entrepreneurship, it is impossible to not mention Muhammad Yunus. He is the founder of the Grameen Bank, which used the concept of microcredit for supporting development in multiple developing countries. He was awarded a Nobel Peace Prize for his efforts.
Another important social entrepreneur is Akhtar Hameed Khan. He established the Comilla Model. Apart from that, he was also responsible for the Bottom Up community development initiative and the Orangi Pilot project.
Many business organizations also focus on social entrepreneurship as a side project. This usually comes under the ambit of corporate responsibility. They spend some money to do good to the society, expecting little or nothing in return. Thus social entrepreneurship also works as an arm of normal, profit based businesses.
There are three main types of social entrepreneurship:
1. The Leveraged Non-Profit: This uses resources to respond to social causes. Leveraged non-profits make innovative use of available funds. These leveraged non-profits are more traditional ways of dealing with issues, though are distinguished by their innovative approaches. Profit is either a small or a non-existent issue, due to the funding or grants that are generated. They are able to devote their entire interest to the social issues at hand.
2. The Hybrid Non-Profit: The main difference between hybrid non-profit and other forms it that hybrids tend to try to make use of profit as well. Hybrid non-profits are often created to deal with government or market failures, as they generate revenue to sustain the operation outside of loans, grants, and other forms of traditional funding. The money that they make usually goes back into the cause, and they will also spend more to bring about the difference they’re trying to make.
3. The Social Business Venture: These are ventures which bring about social change by using businesses as a front. The difference is that in these, profit is generated for the sole purpose of putting it back into the business. They only generate profit due to overcome the lack of funding of government agencies, and the costs involved in running such a venture. They are typically environmental in nature. In places like the United States, this model is friendly to environmental entrepreneurs, due to the available market opportunities.