Characteristics of Social Entrepreneurship

Characteristics of Social Entrepreneurship That Successful Organizations Share

Desert Leader [Photo by Hamed Saber] (CC BY-SA 3.0)

Successful social enterprises share certain characteristics of social entrepreneurship in common. Chief among these is the willingness to self-correct. It’s estimated that 90% of successful ventures start out with the wrong business plan, and the ones that succeed must therefore alter course at some point. It takes a combination of humility and courage to admit when something isn’t working and question your assumptions.

Another important characteristic is the willingness to share credit. A good example of this is the Ashoka Fellow of the Year David Kuria of Kenya. He’s the founder of IkoToilet, which built hygenic and affordable toilets for 1 million slumdwellers in Kibera, a district of Nairobi. When he realized that government regulations would make it difficult to expand, he put the City Council of Nairobi’s logo on all Ikotoilets to gain their support.”>

Defining Characteristics of Social Entrepreneurship

Other defining characteristics of social entrepreneurship include the ability to shrug off the constraints of ideology in order to identify and apply practical solutions to social problems. This requires a combination of innovation, resourcefulness and opportunity. Innovation is necessary for finding new products, services and approaches to social problems, but that’s just the first step.

To apply these ideas successfully requires focus on social value creation and a willingness to share the innovations and insights for others to replicate. Often social entrepreneurs will have to take a leap of faith in pursuing their ideas before they are able to secure full funding. To deal with the high level of risk involved, they must possess an unwavering belief in their innate capacity to contribute meaningfully to economic and social development, and exhibit a dogged determination that pushes them to take the necessary risks.

Characteristics of Social Entrepreneurship Change Agents

Kathmandu , Nepal,Himalayas,Everest [Photo by ilkerender] (CC BY-SA 3.0)

It’s worth noting that many of the characteristics of social entrepreneurship are shared by traditional business startups as well. Some characteristics that differ include an explicitly formulated mission to create and sustain social value and to benefit communities. This involves the pursuit of new opportunities and hidden resources to serve that mission, and a quest for sustainable models based on a well-elaborated feasibility study.

Success requires ongoing engagement in innovation, adaptation and learning. In social enterprises, decision-making power is not based on capital ownership, but rather the participatory and collaborative nature of these organizations involve various stakeholders. Due to this fact, there is often a limited distribution of profit and a minimum amount of paid work associated with these enterprises. However, they empower people in other ways by putting change opportunities in the hands of every individual.

3 Examples of Corporate Social Entrepreneurship

1. Asian Corporate Social Entrepreneurship Awards

IMG_3571 [Photo by David Boyle in DC] (CC BY-SA 3.0)

Malakoff Corporation Bhd, a Malaysian company based in Kuala Lumpur, was recognized for its pioneering corporate social entrepreneurship.

At the Asia Responsible Entrepreneurship Awards 2011, Malakoff won top honors in the social empowerment category. The win is a testimony to the successful collaboration between the company and its stakeholders, especially the local communities where they operate. According to CEO Zainal Abidin Jalil the award has reinforced their commitment to do even more in terms of their CSR initiatives going forward. The Asia Responsible Entrepreneurship Awards recognize and honor corporations that champion sustainable and responsible entrepreneurship in seven different categories.

These include social empowerment, green leadership, investment in people, corporate governance, health promotion, SME CSR and responsible business leadership. The 2011 competition featured a total of 28 corporations from six Southeast Asian countries competing for the top spots.

2. Corporate Social Entrepreneurship in Sport

Office Politics: A Rise to the Top [Photo by Alex E. Proimos] (CC BY-SA 3.0)

When it comes to the area of youth sports, a popular approach by corporate sponsors is to provide funding for a single event with very little allocated to medium or long-term development. It can be argued that sponsorship from the business sector must progress from a notion of corporate social responsibility to corporate social entrepreneurship. This would maximize the relationship between company and community and ensure sustainable development in all aspects, including sport.

Most sponsors still look for high-profile branding opportunities and ignore those activities in remote communities with limited photo-ops. Funding should go beyond tokenism and facilitate a more sustainable approach to sport at the community level.

A well known community activist in Trinidad and Tobago, Muhammad Shabazz, has noted that the rising tide of gang violence in his community could be addressed through youth sports programs. Many of these youths are talented in sports, and if given the opportunities to develop would likely channel their energies away from crime.

3. Corporate Social Entrepreneurship in Tanzania

The National Bank of Commerce (NBC) in Tanzania has donated Sh 18.2 million to the Equal Opportunity to All Fund (EOTF) for the training of 250 women entrepreneurs from different regions of the country. This assistance is part of the bank’s corporate social entrepreneurship program.

The head of NBC Marketing and Corporate Affairs, Ms Mwinda Kiula-Mfugale, noted that many local women need only a small amount of capital for their businesses to be successful. By empowering them financially and economically, they will be able to face their life challenges and improve their communities as well.

She said that the investment would ultimately increase employment opportunities in the country, which is one of the pillars of the bank’s CSR policy. As part of the EOTF program, the 250 women would receive education on how to utilize loans, improve the quality of their products and market them effectively.

Social Entrepreneurship Examples

KvK Creative Entrepreneurs Gathering at Strijp-S [Photo by Cea.] (CC BY-SA 3.0)

New social entrepreneurs will find a wealth of social entrepreneurship examples from which they can draw inspiration and ideas.

Dr. V and David Green are two famous social entrepreneurs who set up a trust in Madurai, India with the goal of providing accessible health care technology and services to the local community. They founded this organization back in 1976, and today it has grown to be one of the largest facilities for eye care in the world. They have expanded to 4 other cities in India to offer services to more people, and today attract patients from all over the world. Another inspiring example of social entrepreneurship from India was founded by social entrepreneur Vikram Akula. His for profit company empowers the poor through micro finance. Over the years, they have increased economic opportunity for the disenfranchised in India by giving them access to financial services, and helped many poor families turn their lives around by starting small businesses.

Another great example of social entrepreneurship can be found in the social media space. The new fashion company was started by two young Southern California social entrepreneurs who applied their social media skills to raise huge awareness for their idea, and to successfully raise capital for their start up as well. The 19 and 26 year old founders were already successful entrepreneurs who decided that running a strictly for profit business was not satisfying enough. They also recognized that starting a traditional charity was not the answer, since they saw how many of these were going out of business due to lack of funding and awareness.

Entrepreneurship [Photo by Michael Lewkowitz] (CC BY-SA 3.0)

The UK has been a great source of social entrepreneurship examples and inspiration, with British social entrepreneurs coming up with a variety of exciting ideas that have become famous around the world. The Big Issue, the Eden Project and Jamie Oliver’s successful city restaurant are just a few of the well known social enterprises to come out of the UK over the years. Another award winning example is a fair trade chocolate company that set the standard for ethical food businesses. It is based on the co-op model, meaning it is co-owned by a cocoa farmers cooperative called Kuapa Kokoo in Ghana. Another award winning social entrepreneurship example from the UK is a company that helps women find flexible employment.

The Social Enterprise Alliance has compiled some great social entrepreneurship case studies from around the world. One recent example is the story of a a social enterprise dedicated to the prevention and reduction of crime. They develop and implement innovative transitional services that help their clients to transform their lives following and successfully re-enter their communities. The company uses methods which have been proven most effective in allowing clients to successfully transition to productive roles in society. They employ highly qualified staff and implement the latest breakthroughs in the field to design their curricula. They also develop and maintain collaborative relationships with community partners to provide clients with networks of support. This helps to boost the community stake in each client’s successful transition back into society. The ultimate goal of the company is to help clients maintain a productive and law abiding lifestyle.

2 Types of Social Marketing – Change Agents Can Use Both

What is Social Marketing?

What is social marketing?

This question has lead to some confusion in the last few years as the term has been widely used to refer to different things.

Social Marketing Definition #1

Realidad [Photo by leoncillo sabino] (CC BY-SA 3.0)

In the public health sector, social marketing is being used as a sophisticated approach to addressing public health problems. Unlike public service announcements which take a top-down approach to public communication, social marketing is more of a feedback loop between the target audience and the health professionals conducting the marketing campaign.

Social marketing builds on the needs and wants of the consumer, which requires detailed research and continuing modification of the campaign based on feedback received. Social marketing dates back to the 1970’s, and it’s based in commercial marketing principles. Social marketing professionals use these principles to sell ideas and improved behaviors to consumers for social benefit.

Social Marketing Meaning #2

50 Social Media Icons [Photo by] (CC BY-SA 3.0)

Another meaning refers to marketing via new internet technology that is also known as social networking, social media or new media. Social marketing sites include the major social media platforms like Facebook, Twitter, and Digg.

These sites have been generating a lot of buzz over the last several years, and although they started out as a fad among young people they have quickly grown into much more. Business owners and nonprofit leaders are recognizing the importance of these sites to their marketing efforts, and finding ways to embrace them. For example, Facebook is the largest social media site in the world after surpassing Myspace.

There are many features on this site which are useful to both business and nonprofit marketers, but the real key to success on Facebook is building a large fan base. Twitter is another fast growing social media site that is attracting the attention of businesses, media outlets, nonprofits and bloggers who value the platform for its growth potential. I spite of its rather limited interactivity in comparison to Facebook, creative marketers are still finding ways to use it effectively.

Help from Social Marketing Services

As a result of the relevance of these 2 types of social marketing for non profits and social enterprises, there are now a number of various services to help change agents figure it all out and maximise their use.

Blackbaud social marketing service is a solution provider for nonprofits which helps them to broaden their audience via private social networking. Blackbaud Social and Blackbaud Sphere combine to create an online solution for event management, advocacy social media, website management and email marketing. Blackbaud Social enables nonprofits to make more meaningful engagements with their supporters. Their proven solutions include a privately-branded online community that offers multiple forms of connection for supporters.

These communities allow for the sharing of personal stories, discussion groups, blogs, comments and photos, encouraging the formation of meaningful bonds between supporters and the organization. Blackbaud Social extends the reach of the organization into the public social networking sites like Facebook and Twitter as well, helping to raise awareness and drive more supporters back to the privately branded site.

Debate: Is Cause Related Marketing Worth it?

1. PROS of Cause Related Marketing

Benefits for Nonprofits of Cause Related Marketing

Cause related marketing offers many benefits for nonprofits and for corporations as well. In this mutually beneficial relationship the corporation and the nonprofit will combine their respective assets to create both social and shareholder value. Their partnership will allow them to connect with a broad range of constituents from suppliers to employees and consumers, and to communicate their organizational values effectively.

The first company to use the phrase cause related marketing was American Express back in 1983. They used it in relation to a campaign to raise money for restoration work on the Statue of Liberty, in which the company donated 1 cent to the cause for each purchase with one of their credit cards. The innovative campaign was wildly successful for the company, which saw their number of new cardholders grow by 45%.

Benefits for Businesses of Cause Related Marketing

Cause related marketing has many benefits for businesses, as it can boost brand equity, change consumer behavior and improve the bottom line. Cause related marketing goes beyond simple philanthropy or altruism in the sense that it is based on mutual benefit to both the business and the charity or cause that they partner with.

CRM has the power to address challenging social issues using corporate resources and funding, while it also gives a boost to the marketing objectives of the corporation. The idea is appealing on an intuitive level sense it is a “win, win, win” situation that benefits many different parties. The company, the charity, consumers and society at large all benefit from cause related marketing campaigns. Research has shown that there is a strong relationship between cause related marketing campaigns and consumer brand affinity and brand loyalty.

2. CONS of Cause Related Marketing

Downsides of Cause Related Marketing

Cause related marketing has both advantages and disadvantages that should be considered carefully before deciding on the pursuit of a CRM campaign.

One of the primary risks is that one of the parties involved in a CRM partnership will do something that damages its reputation. This will negatively impact the other party in the relationship and may undermine their reputation as well, even if they have done nothing wrong. To decrease the chance of this outcome, both corporations and nonprofits should do their homework and choose their CRM partners wisely. Another concern in CRM campaigns is for the nonprofits who lend their good names to for-profit ventures. There is some concern that this may weaken the trustworthiness of the nonprofit in the eyes of society, and even lead to charges of “selling out.”

Are Corporations Taking Advantage of Socially Responsible Advertising?

Judith Schwartz raised the important question of whether corporations were taking advantage of socially responsible advertising as a purely for-profit strategy. The trend is towards more corporations pursuing this form of marketing, but the question of motivation and influence remains a concern.

The definition of altruism is selfless sacrifice for the benefit of others. The fact that corporations choose to publicly donate or sponsor a charitable cause does not make them altruistic if their main purpose in doing so is to increase profits for their shareholders. Corporations form Starbucks to Reebok didn’t sacrifice anything and in fact gained from their CRM campaigns. It could be argued that Reebok promoted international human rights in a campaign to minimize the fact that they use child labor in the manufacture of their products.

Corporate Social Responsibility and Advertising

Daniel Francavilla argues that corporate social responsibility initiatives are not about altruism and rather all about profits. If any of the corporations who launched these campaigns were actually sacrificing resources or profits to help a good cause rather than earning more as a result, this could be described as altruistic.

However, this would be diametrically opposed to the corporate goal of earning as much money as possible and growing their profits each year. Instead, corporations will donate some of their profits to good causes only if they can map a clear benefit to themselves in terms of the bottom line. The increase in cause related marketing campaigns today shows how afraid modern corporations are of offending their customers, but sometimes these campaigns can backfire on the corporation and create a consumer backlash.

My Opinion

Not all corporations are bad. In fact, many actually do serve people in a positive way by provding valuable goods and services that people are willing to pay for.

I think cause related marketing can be a postivie force for both companies and for nonprofits, and social enterprises. Nonetheless, I agree that there are some shady companies that try to exploit good causes, but I think that this is a rare instance. I think that transparency and accountability are becoming more important for both nonprofits and for profit companies, and communities are demanding more of this, particularly with social media and the internet.

What’s your opinion?