In the face of major global challenges, the world needs new leaders who can provide innovative and creative solutions driven by strong values and vision. Social entrepreneurship has emerged as a powerful force for positive change, addressing social issues and making a difference in society. Despite its significance, the term “social entrepreneurship” is often misunderstood and lacks a clear-cut definition. In this blog post, we will explore the meaning of social entrepreneurship, its various interpretations, and its potential to create meaningful impact.
→ Want to sit back and hear more on this topic? Listen to Episode 145 of The Finance Business & Purpose Podcast: “What is Social Entrepreneurship?” here.
Defining Social Entrepreneurship
According to the Stanford Social Innovation Review, “the definition of social entrepreneurship today is anything but clear.”
Although there is no one-size-fits-all definition, common threads of existing definitions of social entrepreneurship revolve around the entrepreneurial and strategic use of limited resources for the purpose of social change. Social entrepreneurs are purpose-driven individuals who strive to change the world by creating innovative solutions and new systems aligned with their values.
Unlike traditional profit-driven business models, social entrepreneurship is not solely about making money. Instead, it is focused on leveraging resources to make a significant impact on critical social needs.
A classic example of a social entrepreneur is Nobel Peace Prize laureate Muhammad Yunus, who founded the micro-lending institution Grameen Bank, providing small loans to help the poor access credit.
Examining Different Perspectives
Investopedia defines a social entrepreneur as “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.” What I appreciate about this definition is the acknowledgment of risk that is involved. Like traditional entrepreneurs in the private sector, social entrepreneurs often have to take on risks in order to create change, for example through making investments with their time, energy, and money to pursue certain opportunities, obtain education and training that will advance their mission, and build teams.
Pointing specifically to opportunities in the business world for social change, the U.S. Chamber of Commerce describes social entrepreneurship as “the process by which individuals, startups and entrepreneurs develop and fund solutions that directly address social issues. A social entrepreneur, therefore, is a person who explores business opportunities that have a positive impact on their community, in society or the world.” While not all social entrepreneurs operate in the context of business and may instead function as non-profits or other types of structures, this definition highlights the entrepreneurial aspect of social entrepreneurship.
Highlighting the resources aspect of social entrepreneurship, Duke University’s Fuqua School of Business Center for the Advancement of Social Entrepreneurship identifies that “recognizing and resourcefully pursuing opportunities to create social value” is central to social entrepreneurship. As we dig into further below, resources are a central element when it comes to bringing about social change.
Embracing an Expansive Approach
A significant challenge in defining social entrepreneurship is the diverse range of strategies and resources involved in making social change. It can encompass various structures, including for-profit businesses, non-profits, community organizing, advocacy, and even government initiatives.
The core of social entrepreneurship lies in being purpose-driven and mission-based for social impact while leveraging resources effectively. What I love most about social entrepreneurs is that they are visionary leaders who can see how the world could be better. They are willing to reimagine existing institutions, systems, and structures and envision how entirely new ones could be created. From my perspective at least, all social change leaders who fit this description should be considered social entrepreneurs, regardless of the structure in which they choose to operate.
Breaking Taboos: Money and Social Entrepreneurship
For some, talking about money in the context of social justice can be uncomfortable. I get it. As someone who has worked in the nonprofit space for over 15 years and as a public interest lawyer since 2015, I was really uncomfortable talking about money – and acknowledging the need for it – for a long, long time.
This all changed when life gave me no choice but to have to finally figure out how money works after my husband Mauricio and I struggled a lot with personal finances when he immigrated to the U.S. from Ecuador in 2013. We didn’t know what he could and couldn’t do in the financial system as an immigrant. Could he open a bank account, credit card, invest, take out a mortgage, get health insurance, plan for retirement…? There were no books, podcasts, or blogs about finances for immigrants. To learn more about our experience, listen to Episode 1: “Our Immigrant Finance Story” here.
Seeing the need others had in this area as well and the lack of guidance and resources available to help the immigrant community navigate the financial and immigration systems, this experience eventually led my husband and I to create our own social impact business to empower other immigrant families with financial education, Immigrant Finance. I also became an Accredited Financial Counselor® and financial coach.
I have also learned the importance of resources as a public interest immigration attorney and program director building a sustainable team to improve legal precedent for broad groups of immigrants. This lesson became quite real in particular during the Trump Administration when the need to fight back for immigrants’ rights on a national level was higher than ever and the ability to do so came down to successfully securing funding grants in order to grow a bigger team of attorneys.
Through my own personal finance and online business journeys, and my experience in the legal system, I have learned that acknowledging the importance of resources, including financial ones, is crucial in being able to make actual significant change in the world.
I have learned that having or wanting money doesn’t make you a bad person – it just accentuates what kind of person you are. Good people can do more good things with more resources, and bad people can do more bad things with more resources. (By the way, if you’re someone who has struggled with wanting more, listen to Episode 153: “How to Stop Feeling Guilty Wanting Profit” here).
Mother Teresa’s statement, “it takes a checkbook to change the world,” emphasizes the need for substantial resources to create substantial impact. Money, time, and support are all essential resources that social entrepreneurs must leverage to bring their visions to life.
As I always say, “it takes massive resources to make massive change.”
Making an Impact with Limited Resources
In particular, social entrepreneurship involves creativity and innovation when resources are scarce. Aspiring social impact leaders who see the need for change but lack the necessary resources must be entrepreneurial in their approach. Bringing attention, awareness, and cultivating financial support are essential steps in building a self-sustaining endeavor.
One of the most common questions I get from others interested in social entrepreneurship is: “How can I get started when there are no jobs or resources available in the area I want to make an impact in?”
My answer is this: learn to be the one create those resources over time.
If you are super passionate about a social issue and feel called to help address it, there’s a reason for that. Most people don’t feel the way you do about that issue, and you feel that way for a reason. When you are embarking on the path of leading social change, there is rarely a clear roadmap or set of instructions waiting on how to be a social change champion. If it was easy or straightforward, the issue would have been addressed already by someone else, and you wouldn’t feel that burning passion to do something about it.
Learn to think, act, and make decisions like an entrepreneur and start asking creative questions like:
- How can I find those resources?
- Who can help me bring attention to this issue?
- What steps can I get started on now with the resources I do have, i.e. my time and energy, even if they are not financial?
- What relationships do I have already or can I cultivate to develop financial support for this issue in the future long-term?
- What next experience/opportunity can I pursue that could help me get to the next baby step in this journey, even if I’m not sure what that looks like exactly?
And if you’re serious about making a bigger social impact, I recommend getting started working on the below key elements of social entrepreneurship, which I cover in the proprietary 4P framework of my signature Illuminate Digital® online social impact business coaching program:
- Purpose – uncover your unique purpose personally and professionally so you can have crystal clarity to focus on your mission and the problem you are meant to help solve, while setting up boundaries and creating more balance in your work and personal life to have the space to prioritize becoming a social impact leader
- People – clarify who exactly you’re meant to help so you can serve the people whose lives you’re meant to change and create a greater impact, faster, and learn to increase visibility online so you can share your message with the world
- Profits – create a one-of-a-kind solution for the problem you help address that leverages your unique talents and learn to develop secure income streams so you can have financial peace of mind and focus on making a bigger impact
- Processes – build sustainably so you have the right tax, finance, and legal foundations and internal systems in place to lay the groundwork for long-term growth
Social entrepreneurship is a powerful pathway that strives to address the world’s most pressing problems through innovative and purpose-driven initiatives. It encompasses a broad spectrum of strategies and resources, from for-profit businesses to non-profits and government efforts. Embracing the importance of resources, including financial ones, is essential in making a substantial positive impact. As the world continues to face serious challenges, social entrepreneurs are at the forefront, leading innovations to create a better, more equitable and sustainable future for all.
→ FREE guide: How to Start a Successful Socially Impactful Online Business (Without Quitting Your Day Job!) – internationalempowerment.ac-page.com/dayjob
→ Want to hear a little about my own social entrepreneurship story in the social impact legal and online business spaces? Listen to Episode 145 of The Finance Business & Purpose Podcast: “What is Social Entrepreneurship?” here.
→ Ready to step into becoming the social change champion you’re meant to be? Apply to join the Illuminate Digital® Social Impact Business Accelerator here. I’m currently offering private 1:1 coaching in this program for a limited time.