1 Social Entrepreneurship

2 Leaders, Managers, Entrepreneurs LeadersManagersEntrepreneurs Key area of focus VisionExecutionOpportunity Leaders, managers, and entrepreneurs are usually not the same people

3 Outline Introduction to social entrepreneurship Entrepreneurial people and organizations The process of social entrepreneurship Discussion case

4 What Is Entrepreneurship? Entreprendre = “to undertake” The process of pursuing opportunities without limitation by resources currently in hand Five parts –Opportunity recognition –Concept development –Resource determination and acquisition –Launch and venture growth –Harvest the venture

5 Social Entrepreneurship: Definition 1 Profit-making ventures designed to provide revenues to nonprofits Examples –Affinity credit cards –Cause-related marketing –Use of nonprofit facilities for commercial activities

6 Social Entrepreneurship: Definition 2 The process of pursuing opportunities in pursuit of high social returns Three key elements –Social entrepreneurship addresses social problems or needs that are unmet by private markets or governments –Social entrepreneurship is motivated primarily by social benefit –Social entrepreneurship works with—not against—market forces

7 The Process of Social Entrepreneurship

8 Sources of Opportunity for Social Entrepreneurship Demographic changes –Neighborhoods in decline Public policy shifts –Faith-based initiatives Public opinion –Public interest in “reinventing government” Social entrepreneurs are always scanning the horizon for opportunities Opportunities for entrepreneurs look like threats and tragedies to others

9 Outline Introduction to social entrepreneurship Entrepreneurial people and organizations The process of social entrepreneurship Discussion case

10 Who Are Social Entrepreneurs? Agency Director High-initiative staff member Super-volunteer –Catalyzes a community Active trustee –Guides a large funding jump Venture philanthropist Ref. Frumkin ch

11 Effective Social Entrepreneurs Can “see” a venture through to its end stages Adopt a mission to create and sustain social value Identify and pursue opportunities to serve mission Engage a process of continuous innovation, adaptation, and learning Act without being limited to resources currently in hand Exhibit accountability to constituents and outcomes Ref. Dees, et al.

12 Risk and Innovation Risk-averseOpen to risk Highly innovative DreamerEntrepreneur Not innovativeStuckGambler Ref. Morris p. 44

13 Risk Is Real Ref. Cordes et al

14 Case 1: Housing Opportunities Made Equal (H.O.M.E.) Services –Core services in housing disputes and fair housing advocacy in Virginia –Special projects and lawsuits Opportunity: Educate people on fair housing before-the-fact, instead of fixing situations after-the-fact Enterprise: Start fair housing training Institute

15 Case 2: Boaz & Ruth Services –Revitalizing a blighted neighborhood in Richmond, VA –Skills training for residents Opportunity: Underutilized physical and human capital Enterprise: Turn a local fire station into retail space and training restaurant

16 Case 3: James River Association Services –Education and advocacy to preserve the James River in Virginia Opportunity: Raise funds by “selling name” through co- branding Enterprise: Find more cause- related marketing opportunities

17 What Do Entrepreneurial Organizations Look Like? Entrepreneurship is measured with respect to degree and frequency –Organizations don’t have to entrepreneurial all the time Degree Frequency Lots of small, new ideas One big splash Ref. Morris p. 19

18 Threats to Social Entrepreneurship Institutional adversity to risk Institutional intolerance to innovation Social entrepreneurs are often attracted to nonprofits, because there is usually less institutional rigidity

19 Outline Introduction to social entrepreneurship Entrepreneurial people and organizations The process of social entrepreneurship Discussion case

20 Characteristics of a Feasible Social Enterprise Business Plan Vision –Clear concept of social value Mission –Focuses on creating and sustaining social value Execution –Gives specifics on how to serve mission –Outlines how the organization will innovate, adapt, and learn –Exhibits a concrete timeline –Deliverable products are produced in a progression of successes, if possible Constraints –Goes beyond resources currently in hand –Demonstrates plan to acquire resources –Demonstrates plan to manage risk Accountability –Plans for accountability to constituencies –Plans for measuring outcomes Ref. Dees 2001

21 What to Measure: Social Return on Investment Criterion 1: The organization can measure its economic and social payoffs Criterion 2: A dollar of value invested in a social mission today generates economic and social returns in excess of the dollar Ref. Emerson et al

22 Positive Economic Value Market output value > input value plus production costs Market output value –Fees paid for services –Donations received Count returns for this period Don’t count investment grants for next period Input value and costs –Resources spent Ref. Emerson et al

23 Positive Social Value Value of output to individual lives or society (not valued by markets) > social inputs Social output value –Willingness-to-pay for services –Multiplier effects Social inputs –Donated resources –Subsidized resources Ref. Emerson et al Young and Steinberg

24 Risk Measurement Economic risk: volatility in economic returns Social risk: number and complexity of barriers to functioning by target population

25 Outline Introduction to social entrepreneurship Entrepreneurial people and organizations The process of social entrepreneurship Discussion case

26 Case: A Cultural District for Syracuse Syracuse arts and culture district proposal Make the Mayor smarter on this enterprise Elements –Value –Mission –Execution –Constraints –Accountability –Next steps