INDEV308 Class 1 - Introduction to Social Entrepreneurship and Social Enterprise

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This introductory class provides an overview of social enterprise and social entrepreneurship, and some of the key tensions that social entrepreneurs encounter.
Theory: What is social entrepreneurship? What distinguishes social entrepreneurship from traditional entrepreneurship?
Practice: What is social enterprise? How is it different from social entrepreneurship? How does it differ from traditional business?

http://www.socialentrepreneurship.ca/indev308

Published in: Business

INDEV308 Class 1 - Introduction to Social Entrepreneurship and Social Enterprise

  1. 1. INDEV 308: Introduction to Social Entrepreneurship Class 1: Introduction to Social Entrepreneurship and Social Enterprise Monday, May 2, 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 HarjiTA – Jespal Panesar 6
  7. 7. © Norm Tasevski & Karim HarjiWhat Makes YOUa (Social)Entrepreneur??? 7
  8. 8. © Norm Tasevski & Karim HarjiAgenda•  Class Intros•  Syllabus and Class Structure•  Ground Rules•  Defining Social Entrepreneurship•  Defining Social Enterprise•  What did we learn?•  Next week 8
  9. 9. © Norm Tasevski & Karim HarjiINDEV 308: Syllabus 9
  10. 10. © Norm Tasevski & Karim HarjiClass Rules –  Participation - quality, not quantity! –  No stupid questions (only stupid answers) –  Respect your classmates – attend and be punctual! 10
  11. 11. Defining Social Entrepreneurship… 11
  12. 12. © Norm Tasevski & Karim HarjiFirst, we need to understandentrepreneurship... 12
  13. 13. © Norm Tasevski & Karim HarjiEntrepreneurs… …are motivated 13
  14. 14. © Norm Tasevski & Karim HarjiEntrepreneurs… …are innovative 14
  15. 15. © Norm Tasevski & Karim HarjiEntrepreneurs… …are resourceful 15
  16. 16. © Norm Tasevski & Karim HarjiEntrepreneurs… …take chances 16
  17. 17. How is Social EntrepreneurshipDifferent? 17
  18. 18. © Norm Tasevski & Karim HarjiHow is Social Entrepreneurship Different?Motivation Innovation Resourcefulness Risk Taking 18
  19. 19. © Norm Tasevski & Karim HarjiBut……motivations are different 19
  20. 20. © Norm Tasevski & Karim HarjiBarefoot College 20
  21. 21. © Norm Tasevski & Karim HarjiBut……innovation is different 21
  22. 22. © Norm Tasevski & Karim HarjiRegistered Disability Savings Program 22
  23. 23. © Norm Tasevski & Karim HarjiBut……resourcefulness is different 23
  24. 24. © Norm Tasevski & Karim Harji“Civic Engagement, Scaled Up” 24
  25. 25. © Norm Tasevski & Karim HarjiBut……risk taking is different 25
  26. 26. © Norm Tasevski & Karim Harji“Banking for the Poor” 26
  27. 27. © 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 prepared Seek “profit” in traditionally to strike a very different balance when it comes to creatingunprofitable pursuits: 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 live. A project only makes sense to me when it proves useful to make people happier and the environment more respected, and when it represents a hope for a better future. This is the soul of my projects.” 27
  28. 28. © 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 28
  29. 29. Break 29
  30. 30. Defining Social Enterprise… 30
  31. 31. © Norm Tasevski & Karim Harji 31
  32. 32. © 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 32
  33. 33. © Norm Tasevski & Karim HarjiA Question… What makes a business a business? 33
  34. 34. © Norm Tasevski & Karim HarjiComponents of a Business A transaction A product/service A goal A legal form 34
  35. 35. How is Social Enterprise Different? 35
  36. 36. © Norm Tasevski & Karim HarjiSocial Enterprise has… Yep Absolutely A transaction A product/service This one’s complicated Yeah, but… A goal A legal form 36
  37. 37. © Norm Tasevski & Karim HarjiThe SE Product/Service It’s still…But…•  “Social benefit” is added somewhere on the value chain 37
  38. 38. © 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” 38
  39. 39. © Norm Tasevski & Karim HarjiExercise•  Add social benefit to: 39
  40. 40. © Norm Tasevski & Karim HarjiThe SE TransactionTraditional Business Social Enterprise Customers Customers “Clients” 40
  41. 41. © Norm Tasevski & Karim HarjiTurnAround Couriers 41
  42. 42. © 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” 42
  43. 43. © Norm Tasevski & Karim HarjiA Common Dilemma •  Usual: Social enterprises feel they need to sacrifice social purpose for financial gain, or vice versa •  Ideal: Financial returns depend on social mission (and vice versa) 43
  44. 44. © 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? 44
  45. 45. © 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 Emphasis on Emphasis on Nonprofit with Business with Conventional Social Conventional Financial Social Return some earned social Nonprofit Enterprise Business Return income responsibility Philanthropic Capital Commercial CapitalSource: Stanford Social Innovation Review, Spring 2008; Jed Emerson cited as contributor 45
  46. 46. © 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? 46
  47. 47. © 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 47
  48. 48. © Norm Tasevski & Karim HarjiWhat does this mean? Social CSR Enterprise Social Complexity Enterprise 48
  49. 49. © 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 49
  50. 50. © 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 50
  51. 51. © Norm Tasevski & Karim HarjiWhat did we learn? 51
  52. 52. © Norm Tasevski & Karim HarjiNext Week•  Complete Survey Monkey – guaranteed participation grade!•  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 52

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