Social Entrepreneurship

1st Semester 2024

What is Social Entrepreneurship

(Title)

BS Entrep II Students
Ulnicoric Pajarilla
Jeremiah Abrinzosa
Mark Antony Canceller
Ernesto Abal
Mark Nathaniel Espina
Rachel Delantar

Instructor
Ms. Ma Daisy C. Royo
What Is a Social Entrepreneur?

A social entrepreneur is a person who pursues novel applications that have the potential to solve
community-based problems. These individuals are willing to take on the risk and effort to create positive
changes in society through their initiatives. Social entrepreneurs may believe that this practice is a way to
connect you to your life's purpose, help others find theirs, and make a difference in the world (all while
eking out a living).

A social entrepreneur is interested in starting a business for the greater social good and not just the pursuit
of profits.

Social entrepreneurs may seek to produce environmentally-friendly products, serve an underserved

community, or focus on philanthropic activities.

Social entrepreneurship is a growing trend, alongside socially responsible investing (SRI) and
environmental, social, and governance (ESG) investing.

The four primary types of social entrepreneurs are community social entrepreneurs, non-profit social
entrepreneurs, transformational social entrepreneurs, and global social entrepreneurs.

Social entrepreneurs design their thinking around the six P's of launching an idea: people, problem, plan,
prioritize, prototype, and pursue.

Understanding Social Entrepreneurs

 While most entrepreneurs are motivated by the potential to earn a profit, the profit motive does not
prevent the ordinary entrepreneur from having a positive impact on society. In his book The Wealth of
Nations, the economist Adam Smith explained, "It is not from the benevolence of the butcher, the brewer, or
the baker that we expect our dinner, but from their regard to their own self-interest."

Smith believed that when individuals pursued their own best interests, they would be guided toward
decisions that benefited others. The baker, for example, wants to earn a living to support their family. To
accomplish this, they produce a product—bread—which feeds and nourishes hundreds of people.

A social entrepreneur might also seek to address imbalances in such availability, the root causes behind
such social problems, or the social stigma associated with being a resident of such communities. The main
goal of a social entrepreneur is not to earn a profit. Rather, a social entrepreneur seeks to implement
widespread improvements in society. However, a social entrepreneur must still be financially savvy to
succeed in their cause
.
Types of Social Entrepreneurs

Community Social Entrepreneur

A community social entrepreneur prioritizes the needs of a small geographical region, usually the
community they live in. This type of social entrepreneur is less concerned about the specific nature of their
endeavor; the primary purpose of their entrepreneurship is to benefit their local area.

This type of social entrepreneur often builds strong relationships in their community, taking advantage of
relationships to leverage how resources flow within their town. Community members, local organizations,
and the community social entrepreneur work together to make sure the needs of the community are met
and partnerships that make sense are created.

Non-Profit Social Entrepreneur

Non-profit social entrepreneurs are the more common type of social entrepreneur where the entity
has a broadly stated goal that benefits someone but not necessarily their direct community. With the
introduction of remote or online social entrepreneurship, it is now easier to create entities with broader
mission-driven purposes.

Non-profit social enterprises usually operate very similarly to a business. The primary difference is
that the net profits of the non-profit enterprise are often returned back to the entity for further development
of the program. Instead of there being investors to make money, a non-profit social entrepreneur strives to
spend as much money as it can towards its mission.

Transformational Social Entrepreneur

As a start-up non-profit social enterprise grows, it often shifts into becoming a transformational
social entrepreneur. As local non-profits grow, so can their mission. A transformational social entrepreneur
looks to scale an operation from a single program to benefit various areas. For example, consider the broad
reach of Goodwill; what started as a small non-profit social enterprise transformed into a much richer,
broader entity with many more rules and regulations.
Global Social Entrepreneur

Sometimes, social entrepreneur endeavors aren't limited by borders or geography. Sometimes,

people may try to solve overarching social concepts such as poverty, depression, or lack of living
conditions.

Usually, the social entrepreneur may try to solve an issue in a specific region. However, these deep-rooted
issues are often not specific to a region. Many of the solutions discovered in one area may be attributable
to another.

These types of organizations easily have the greatest reach. For example, consider the breadth of the Bill &
Melinda Gates Foundation. Their endeavors to find vaccinations for various diseases impacting those
around the world are a clear example of global social enterprises.

Social entrepreneurship continually evolves; what may be a local communal non-profit one year may model
into a global social enterprise the next.

6 P's of Social Entrepreneurial Enterprises

As social entrepreneurs embark on turning their ideas into successes, they often work through the
following six areas. Each of these categories has different resources, roadblocks, or stages a social
entrepreneur must often encounter.

People

Most social entrepreneurs start their endeavors by identifying what people they want to benefit.
Sometimes, this is the people in their specific geographical region. Other times, this is people within a
certain demographic (i.e. people with low income). Without a clear definition of who the social entrepreneur
wants to serve, they will face difficulty in appropriately defining the scope of their enterprise. This puts the
yet-to-be-created entity at risk of not having a clear vision.

Problem

Social entrepreneurs try to fix problems. More specifically, social entrepreneurs identify a problem
that the people in the previous section face. Usually, during the brainstorming phase of an entity, the social
entrepreneur will link the two together. For example, social entrepreneurs may try to defeat homelessness
in their region. A social entrepreneur in this situation tries to help certain people (low-income individuals)
with a problem (lack of available housing).

Plan

With the people and problems identified, a social entrepreneur must devise a plan to solve the
problem. Social entrepreneurs not only strive to create a business plan to operate an entity, but they must
also determine how this type of entity will receive funding and remain financially sustainable. The social
entrepreneur must also evaluate how external parties can help it achieve its social goals.

Prioritize

One of the largest challenges for a social entrepreneur is a lack of available resources to tackle the
problem they wish to solve. Whether that means not enough money, not enough specialized knowledge, or
external forces that cannot be controlled, social entrepreneurs face many constraints. This means they
must prioritize what they try to solve, how they go about operating, and what expansion looks like.
Prototype

Because resources are limited, social entrepreneurs often test out solutions in small markets before
expanding. This means creating prototype products, services, or processes. It also tests out how different
funding and resources can help it achieve its goals. Though this stage may not foster trust in those who
have provided an upfront investment with the social entrepreneur, other upfront investors may appreciate
seeing a minimum viable product or prototype.

Pursue

With the test case down, social entrepreneurs identify what went well and what didn't go well. It
often surveys those who helped put the solution together as well as those receiving the benefit. This last
step closes the full loop of activity, though a social entrepreneur should periodically evaluate each aspect
and continually monitor for ways to better make their social change.

Social Entrepreneur vs. Other Social Concepts

Social entrepreneurship is related to socially responsible investing (SRI) and environmental, social,
and governance (ESG) investing. SRI is the practice of investing money in companies and funds that have
positive social impacts. SRI has also grown in popularity in recent years.

Socially responsible investors will often eschew investments in companies that produce or sell
addictive substances (like alcohol, gambling, and tobacco). They may also seek out companies that are
engaged in social justice, environmental sustainability, and alternative energy or clean technology efforts.

Socially conscious investors screen potential new investments for environmental, social, and
governance (ESG) criteria. This set of standards considers how a company performs as a steward of nature,
how it manages relationships with employees, suppliers, customers, and the communities where it
operates, and how it treats its company’s leadership, compensates its executives, and approaches audits,
internal controls, and shareholder rights.

Examples of Social Entrepreneurship

The introduction of freshwater services through the construction of new wells is another example of
social entrepreneurship. A social entrepreneur may have the goal of providing access to communities that
lack stable utilities of their own.

In the modern era, social entrepreneurship is often combined with technology assets: for example, bringing
high-speed internet connectivity to remote communities so that school-age children have more access to
information and knowledge resources. Another example is microfinance institutions that provide banking
services to unemployed or low-income individuals or groups who otherwise would have no other access to
financial services.

The development of mobile apps that speak to the needs of a particular community is another way social
entrepreneurship is expressed. This can include giving individuals ways to alert their city administrations to
problems such as burst water mains, downed power lines, or patterns of repeated traffic accidents. There
are also apps created to report infractions committed by city officials or even law enforcement that can
help give a voice to the community through technology.

Other examples of social entrepreneurship include educational programs and helping children orphaned by
epidemic disease. All of these efforts are intended to address unmet needs within communities that have
been overlooked or not granted access to services, products, or basic essentials available in more
developed communities.

How Do You Become a Social Entrepreneur?

You can become a social entrepreneur by considering who you want to help and what problem you
want to solve. Once you have a targeted idea, it's often best to gather resources, understand where your
limitations are, and decide what external parties you want to help craft the enterprise.

How Do Social Entrepreneurs Make Money?

Social entrepreneurs raise capital for their enterprises by connecting with other members of the
community. "Community" does not necessarily need to mean physical location, as some enterprises may
collaborate around the world for a common social cause. A social entrepreneur may collect grants, upfront
donations from major donors (in exchange for public recognition), or use personal capital.
Do Social Entrepreneurs Pay Taxes?

It depends. Social entrepreneurs are usually not personally exempt from paying taxes. This means
that almost all individuals are taxed on the income they make, regardless of whether or not the enterprise

they work for is a social enterprise. On the other hand, most social entrepreneurs incorporate their
enterprises as non-profit entities so their enterprises can operate tax-free.

Conclusion

Some people craft a business to make a lot of money. Other times, people start an enterprise for social
good. The latter type of individual is called a social entrepreneur, and they often start by identifying the
people and problems they want to help. Though there are many similarities between a social venture and a
full-for-profit enterprise, the core difference is that a social entrepreneur prioritizes the good it creates for
its community or recipient base.