APS1015H Class 1 - Definitions and Motivations for Social Entrepreneurship


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This introductory class provides an overview of social enterprise and social entrepreneurship, the motivations for wanting to be a social entrepreneur, and some of the key tensions that social entrepreneurs encounter.


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APS1015H Class 1 - Definitions and Motivations for Social Entrepreneurship

  1. 1. APS 1015H: Social Entrepreneurship Class 1: Definitions and Motivations for Social Entrepreneurship Wednesday, September 14, 2011Instructors:Norm Tasevski (norm@socialentrepreneurship.ca)Karim Harji (karim@socialentrepreneurship.ca) 1
  2. 2. © Norm Tasevski & Karim Harji 2
  3. 3. © Norm Tasevski & Karim HarjiBefore we begin… This course is designed for those that want to start a social venture, and/or work in social enterprise 3
  4. 4. © Norm Tasevski & Karim HarjiCourse Director – Norm Tasevski 4
  5. 5. © Norm Tasevski & Karim HarjiCourse Director – Karim Harji 5
  6. 6. © Norm Tasevski & Karim HarjiWhat Makes YOUa (Social)Entrepreneur??? 6
  7. 7. © Norm Tasevski & Karim HarjiAgenda• Class Intros• Syllabus and Class Structure• Ground Rules• Defining Social Entrepreneurship• What motivates the social entrepreneur?• What did we learn?• Next week 7
  8. 8. © Norm Tasevski & Karim HarjiSyllabus 8
  9. 9. © Norm Tasevski & Karim HarjiClass Rules – Participation - quality, not quantity! – No stupid questions (only stupid answers) – Respect your classmates – attend and be punctual! 9
  10. 10. Defining Social Entrepreneurship… 10
  11. 11. © Norm Tasevski & Karim HarjiFirst, we need to understandentrepreneurship... 11
  12. 12. © Norm Tasevski & Karim HarjiEntrepreneurs… …are motivated 12
  13. 13. © Norm Tasevski & Karim HarjiEntrepreneurs… …are innovative 13
  14. 14. © Norm Tasevski & Karim HarjiEntrepreneurs… …are resourceful 14
  15. 15. © Norm Tasevski & Karim HarjiEntrepreneurs… …take chances 15
  16. 16. How is Social EntrepreneurshipDifferent? 16
  17. 17. © Norm Tasevski & Karim Harji Entrepreneurs……are motivated …are innovative …are resourceful …are risk takers 17
  18. 18. © Norm Tasevski & Karim HarjiBut, for the social entrepreneur……motivations are different 18
  19. 19. © Norm Tasevski & Karim HarjiAnd……innovation is different 19
  20. 20. © Norm Tasevski & Karim HarjiAnd……resourcefulness is different 20
  21. 21. © Norm Tasevski & Karim HarjiAnd……risk taking is different 21
  22. 22. © Norm Tasevski & Karim HarjiAn Example – “Civic Engagement, ScaledUp” 22
  23. 23. © Norm Tasevski & Karim Harji Other Differences “Social entrepreneurs are not content just to give a fish or Focus on “systems how to teach fish. They will not rest until they have thinking” and revolutionized the fishing industry” “systems change”: Bill Drayton “(Social entrepreneurs) work in areas where there is partial or total market failure…what distinguishes them is that they are Seek “profit” in prepared to strike a very different balance when it comes to traditionallyunprofitable pursuits: creating value for those who would not normally be able to afford it” John Elkington David Bornstein: “Why do you work on the kinds of projects you do? Why don’t you just want to make a lot of money?” Possess a strong “ethical impetus”: Fabio Rosa: “I am trying to build a little part of the world in which I would like to make people live. A project only makes sense to me when it proves useful to happier and the environment more respected, and when it represents a hope for a better future. This is the soul of my projects.” 23
  24. 24. © Norm Tasevski & Karim HarjiSome Definitions• “Social entrepreneurs identify resources where people only see problems. They view the villagers as the solution, not the passive beneficiary. They begin with the assumption of competence and unleash resources in the communities they are serving” David Bornstein• “A social entrepreneur is someone who recognizes a social problem and uses entrepreneurial principles to organize, create and manage a venture to make social change” Wikipedia 24
  25. 25. Break 25
  26. 26. Defining Social Enterprise… 26
  27. 27. © Norm Tasevski & Karim Harji 27
  28. 28. © Norm Tasevski & Karim HarjiWhat is a Social Enterprise?• Organizations (non-profit or for-profit) that imbed both social purpose and business purpose into their organization• Returns are both Social (i.e. impact) & Financial (i.e. profit)• Key distinguishing factor: How deep social & business purpose is imbedded 28
  29. 29. © Norm Tasevski & Karim HarjiA Question… What makes a business a business? 29
  30. 30. © Norm Tasevski & Karim HarjiComponents of a Business A transaction A product/service A goal A legal form 30
  31. 31. How is Social Enterprise Different? 31
  32. 32. © Norm Tasevski & Karim HarjiSocial Enterprise has… Yep Absolutely A transaction A product/service This one’s complicated Yeah, but A goal A legal form 32
  33. 33. © Norm Tasevski & Karim HarjiThe SE Product/Service It’s still…But…• “Social benefit” is added somewhere on the value chain 33
  34. 34. © Norm Tasevski & Karim HarjiWhat is Social Benefit?• For our purposes, social benefit may arise when one attempts to overcome an injustice or inequity in society that the market, on its own, cannot respond to – E.g. creating employment opportunities for individuals that may not otherwise be employable in the marketplace• A similar concept – “environmental benefit” 34
  35. 35. © Norm Tasevski & Karim HarjiExercise• Add social benefit to: 35
  36. 36. © Norm Tasevski & Karim HarjiThe SE TransactionTraditional Business Social Enterprise Customers Customers “Clients” 36
  37. 37. © Norm Tasevski & Karim HarjiThe SE Goal - Social vs. Financial PurposeSocial Purpose – Creating a “social return” by making positive change within an inequitable social system • Examples: Reduced Poverty, Improved LiteracyFinancial Purpose – Creating a “financial return”, usually through the sale of products/services in the marketplaceBlended Purpose – Effecting social change by combining social and financial return – Also called “Blended Value” 37
  38. 38. © Norm Tasevski & Karim HarjiViewing SE Through a “business lens”• How you think about cost – Additional costs borne on business that achieves a social benefit (how do you incorporate? Valuate it?)• How you think about investment – Opportunities to get investment through traditional models, but because your business is hybrid, the investment needs to be hybrid (i.e. layering of different financing mechanisms)• How you think about success – Part of the social enterprise motivation is social, so you need to consider success in a dual lens. How do you articulate success in both of these spheres? 38
  39. 39. © Norm Tasevski & Karim Harji The Legal Form • No clearly defined legal form for social enterprise in Canada • “Form follows function” Spectrum of Social and Financial Returns Nonprofit Structure For-profit Structure Emphasi Nonprofit Business Emphasi s on Conventi with Social with Conventi s on Social onal some Enterpris social onal Financial Return Nonprofit earned e responsi Business Return income bility Philanthropic Capital Commercial CapitalSource: Stanford Social Innovation Review, Spring 2008; Jed Emerson cited as contributor 39
  40. 40. © Norm Tasevski & Karim HarjiA test…I am:• A retailer Facts:• Sells goods at rates affordable by low- • $115M raised for charity since 1995 income individuals ($18M in 2009)• Employs individuals with barriers to employment • Over 1,000 environmentally-• Goals: approved products on sale – 92% of imported goods from green • 1700 new jobs created in Canada in factories 2009 – 95% of waste redirected from landfill – Desire to be supplied 100% by renewable energy by 2015 Social Enterprise or Not? 40
  41. 41. © Norm Tasevski & Karim HarjiA test…I am:• A café• 84% of all coffee ethically sourced (goal of 100% by 2015)• Supports farmers by a) selling fair trade coffee, and b) providing loans to coffee growers• Purchase carbon credits to offset production• Goals: – 100% of cups to be reusable/recyclable – Use recycled/renewable materials in café construction – Organize a “month of service” (employees act as “change makers” in their communities) Social Enterprise or Not?Facts:• Sells approx. 10% of all Fair Trade coffee globally• Almost 200,000 volunteer hours made by employees worldwide• Over 53,000 youth supported and engaged in community events 41
  42. 42. © Norm Tasevski & Karim HarjiWhat does this mean? Social CSR Enterprise Social Complexity Enterprise 42
  43. 43. © Norm Tasevski & Karim HarjiWhat SE is and is NotSocial Enterprise Is Not… Social Enterprise Is…• A fundraising strategy (i.e. a “give” • A business line (i.e. a “sales” mentality)mentality)• Solely focused on either “customers” • Focused on both “customers” andor “clients” “clients”• Dependent on restricted funds for • Sustainable (ideally “self-sufficient”)operations (i.e. not sustainable)• An event or one-off activity (e.g. • A continuous, market-driven activityconferences, bake sales)• Providing value to clients only • Providing value to both “clients” and “customers” (and distinguishing between both!)• Quick • A venture that may take several years to become profitable/sustainable 43
  44. 44. © Norm Tasevski & Karim HarjiSome Definitions• “An organization or venture that achieves its primary social or environmental mission using business methods.” Social Enterprise Alliance• “Business ventures operated by non-profits, whether they are societies, charities, or co-operatives.” Enterprising Non-Profits (enp)• “… social mission driven organizations which apply market-based strategies to achieve a social purpose. The movement includes both non-profits that use business models to pursue their mission and for-profits whose primary purposes are social.” Wikipedia 44
  45. 45. Motivators for Social Entrepreneurs… 45
  46. 46. © Norm Tasevski & Karim HarjiA Question… What motivates you?? 46
  47. 47. © Norm Tasevski & Karim HarjiSome Definitions• Internal and external factors that stimulate desire and energy in people to be continually interested in and committed to a job, role or subject, and to exert persistent effort in attaining a goal. Motivation is the energizer of behaviour and mother of all action. It results from the interactions among conscious and unconscious factors such as the (1) intensity of desire or need, (2) incentive or reward value of the goal, and (3) expectations of the individual and of his or her significant others.” BusinessDictionary.com• “Motivation is the activation or energization of goal-orientated behavior. Motivation may be rooted in the basic need to minimize physical pain and maximize pleasure, or it may include specific needs such as eating and resting, or a desired object, hobby, goal, state of being, ideal, or it may be attributed to less-apparent reasons such as altruism, selfishness, morality, or avoiding morality. Conceptually, motivation should not be confused with either volition or optimism. Motivation is related to, but distinct from, emotion.” Wikipedia 47
  48. 48. © Norm Tasevski & Karim HarjiIn response towhy people arenot giving tothe Pakistaniflood in thesame way asthey did forHaiti, onewoman said:“It’s a roguestate, if theycan afford thenuclear bombthey can lookafter their own” 48
  49. 49. © Norm Tasevski & Karim HarjiCostin Militaru, anoutreachworker has metaddicts as young as9 years old. "Hisfamily had no moneyfor food. He washungry and keptcrying, so they fedhim heroin," Militarusays. "If youre high,you dont need food.” 49
  50. 50. © Norm Tasevski & Karim Harji“On March 24, 1989,the Exxon Valdez ranaground in northernPrince WilliamSound, spilling 42million liters of crudeoil and contaminating1,990 kilometers ofshoreline. Some2,000 sea otters,302 harborseals and about250,000seabirds died inthe days immediatelyfollowing the spill.” 50
  51. 51. A total of Tasevski & Karim Harji © Norm 32,700different peoplestayed in Torontosemergency sheltersin 2005. 4,600 werechildren.Over half a millionToronto householdslive below thepoverty line1 in 10 homelessreport attemptedsuicide in 2006 51
  52. 52. © Norm Tasevski & Karim Harji 52
  53. 53. © Norm Tasevski & Karim HarjiSo What Motivates TheSocial/Environmental Entrepreneur? “…it was an epiphanal experience…” Ray Anderson, Interface Carpets
  54. 54. © Norm Tasevski & Karim HarjiSo What Motivates TheSocial/Environmental Entrepreneur? “I heard the same story again and again. Someone had experienced an intense kind of pain that branded There was them in some way. They said, ‘I had’ to do this. nothing else I could do.” Jody Jensen, Ashoka
  55. 55. © Norm Tasevski & Karim HarjiSo What Motivates TheSocial/Environmental Entrepreneur? “…that made a real impression on me…” Jeff Skoll, eBay, Skoll Foundation, etc.
  56. 56. © Norm Tasevski & Karim HarjiSo What Motivates TheSocial/Environmental Entrepreneur? “I was teaching in one of the universities while the country was suffering from a severe famine. People were dying of hunger, and I felt very helpless. As an economist, I had no tool in my toolbox to fix that kind of situation.” Mohammed Yunus, Grameen Bank
  57. 57. © Norm Tasevski & Karim Harji So What Motivates The Social/Environmental Entrepreneur?“…powerful moments of inspiration…”Jacqueline Novogratz, Acumen Fund
  58. 58. © Norm Tasevski & Karim HarjiWhat about…
  59. 59. © Norm Tasevski & Karim HarjiWhat did we learn? 59
  60. 60. © Norm Tasevski & Karim HarjiNext Week• 1st deliverable: – Pick a social/environmental issue (international or Canadian), and… – Pick a group of 4 (we will finalize groups next week based on final class numbers)• Readings 60