To Define Social Enterprise (not saying we need to), Focus On The Results

What exactly is a social enterprise? Can Levi’s be counted as one because it practices sustainability? Can KABOOM! because its operations are entrepreneurial?  The term (which encompasses both profitable and non-profit initiatives) has had critics and confused bystanders shaking their heads and voicing alternatives for a while.

The criticism seems mostly to rest on the entrepreneur part. Some critics think it’s too indicative of ego-maximizing initiatives and diminishes the societal aspect of the term, while others (including Jay Goltz, author of a recent New York Times op-ed) think entrepreneurship is synonymous with making a profit, which not all social enterprises do.

Although I’m sometimes frustrated that we don’t have a clear vernacular to use when talking about social mission and business (sustainability and CSR call forth a whole new wave of head shaking), I’m not bothered by the fact that people have varying perceptions of ‘it.’  Social enterprise is defined by actions and changed lives and environments rather than by academics, pundits and bloggers.  My friend Martin Montero brings it back to the mission: “In general, I think if the ‘solution’ does not increase the amount of power the powerless/poor have, it’s not a social enterprise, it’s a joke.”*

The Acumen Fund produced a brief video, The Double Bottom Line, that highlights two for-profit social enterprises, D.Light and LifeSpring maternity hospital, and their common themes.

*Martin gave this quote to John Townsend, who writes for Changemakers.

Photo credit: Artfire.

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5 Comments

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  1. Rajasekharan September 11, 2010 at 5:19 pm #

    Social Enterprise is one in which satisfies two tests (1) “social goal”is central to the enterprise, and (2) for every incremental dollar in bottom-line there is incremental social good and vice-versa.
    regards, raja

  2. Olivia Khalili September 12, 2010 at 8:44 pm #

    Thanks for the comment, Raja. It’s a good definition. Do you run a social enterprise? If so, I’d love to hear about.

  3. Olivia Khalili September 13, 2010 at 1:49 pm #

    I’m posting this comment on behalf of Jeff Mowatt (jeff.mowatt@btinternet.com), who emailed it to me with request to share:

    “What’s in a name”, I asked a fellow traveller on his blog the other day and the same thought came to John Townsend, blogging for Ashoka about the recent NY Times article on the subject

    http://smblog.changemakers.com/whats-in-a-name

    We may debate definitions to death, but in the end someone has to go out and do something.

    As I’ve read it, the word entrepreneur derives from the French ‘entreprendre’, to undertake, which in English might also be associated with undertaker, in the context of funerals.

    We’ve also been debating Social Business, as Muhammad Yunus used the expression to define a non-loss non-dividend distributing model with a primary social objective.

    Yunus had once declared capitalism to be interpreted too narrowly and unsurprisingly some of the investment fraternity are now describing his interpretation of social business to be too narrow.

    If the model is too narrow, then why not define one’s own model and call it another name?.

    It’s a social enterprise sector as far as I’m concerned and the term serves as a loose branding for all sorts of social endeavour. Kim Alter goes into a lot more detail describing social enterprise typology

    http://www.4lenses.org/setypology

    In the end, it’s what works for the ‘undertaker’ and the social objective he or she targets.

    We call what we started People-Centered Economic Development because a major influence was that of psychologist Carl R Rogers. Capitalism, it was reasoned in the case of P-CED, might be deployed to create the conditions for those in poverty to be able to help themselves achieve economic goals, rather than being dependent on hand outs.

    http://www.simplypsychology.pwp.blueyonder.co.uk/carl-rogers.html

    Typically, those we aim to help in this way are not existing in an abstract state of poverty that can be resolved easily , but within the conditions that develop where there is immense natural wealth combined with an absence of democratic governance and just laws. We call it organised crime, corruption. Helping create the conditions for these things to develop are thus just as important, whether or not that fits the social enterprise remit.

    There are indeed many bottom lines, perhaps only one will form the primary social purpose. In his presentation on social business, Yunus focusses on a result measured in terms of the number of children taken away from malnutrition. It’s a straightforward objective measured in human terms rather than any measure of what it might have saved the state, because often as not the state just isn’t going to do it. We have a similar outlook and plenty of obstacles on all sides,

    http://socialbusiness.socialgo.com/magazine/read/the-bottom-line-of-social-business-_6.html

  4. Harry Stevens September 13, 2010 at 10:35 pm #

    Hi Olivia,

    I liked this article and mentioned it in a piece I wrote over a Justmeans: http://www.justmeans.com/Changing-How-We-Think-About-Entrepreneurship/30847.html

    I’d be curious to hear your thoughts.

    Regards,
    Harry

  5. Olivia Khalili September 14, 2010 at 12:05 pm #

    Harry,

    Terrific article; nicely stated and framed. I’m in agreement that entrepreneurship means much more than profit-making. It’s hard to win over all the critics, so we might as well just get to work. Many thanks for the link and reference.

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