ABSTRACT
This report deals with the concept of Social Entrepreneurship and the work that a social entrepreneur does. The Report is a guide to learn Social Entrepreneurship through Handson experience. The Report covers my experience in starting a Social Enterprise, difficulties I encountered during the time and how to make a Social Enterprise a Viable option. This report covers everything from rise of this term Social Entrepreneur, to work done by Social Entrepreneurs, to the Entrepreneurial theories and approaches they follow or must follow. This report also describes several Social Ventures and the people behind those ventures who have brought about a positive social change. Social Entrepreneurship is a relatively new phenomenon and the excitement it has created throughout the world because of the impact it has had is tremendous. This report thus describes what learning social entrepreneurship through hands-on experience is. The Report also lists the various people I contacted for Sponsorship and the manner in which they supported the project.
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TABLE OF CONTENTS
ACKNOWLEDGEMENTS 03
ABSTRACT 04
1. SKILL DEVELOPMENT AND SOCIAL ENTREPRENEURSHIP 06
1.1 INTRODUCTION
1.2 OBJECTIVES
1.3 METHODOLOGY
1.4 DATA COLLECTION
1.5 CHAPTER SCHEME
2. LITERATURE REVIEW 11
3. HISTORY 17
4. MODERN SOCIAL ENTREPRENEURSHIP 22
5. SOME OUTSTANDING EXAMPLES 27
6. THEORIES OF ENTREPRENEURSHIP 33
7. CONCLUSION 38
8. BIBILIOGRAPHY 39
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CHAPTER-1
SOCIAL ENTREPRENEURSHIP
1.1 INTRODUCTION:
Social entrepreneurship is the work of Social Entrepreneurs. A social entrepreneur recognizes a social problem and uses entrepreneurial principles to organize, create and manage a venture to achieve social change (a social venture). While a business entrepreneur typically measures performance in profit and return, a social entrepreneur focuses on creating social capital. Thus, the main aim of social entrepreneurship is to further social and environmental goals. Social entrepreneurs are most commonly associated with the voluntary and not-for-profit sectors, but this need not preclude making a profit.
Social entrepreneurs are individuals with innovative solutions to society’s most pressing social problems. They are ambitious and persistent, tackling major social issues and offering new ideas for wide-scale change. Rather than leaving societal needs to the government or business sectors, social entrepreneurs find what is not working and solve the problem by changing the system, spreading the solution, and persuading entire societies to take new leaps.
Social entrepreneurs often seem to be possessed by their ideas, committing their lives to changing the direction of their field. They are both visionaries and ultimate realists, concerned with the practical implementation of their vision above all else.
Each social entrepreneur presents ideas that are user-friendly, understandable, ethical, and engage widespread support in order to maximize the number of local people that will stand up, seize their idea, and implement with it. In other words, every leading social entrepreneur is a mass recruiter of local changemakers—a role model proving that citizens who channel their passion into action can do almost anything.
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1.2 OBJECTIVES:
1. To develop skill development programmes in the field of Social
Entrepreneurship.
A Proper Skill Development Program was formed and started in Farahnagar
Village. The program has been named “Abhilasha”. The program offers the following key activities
a. Tutoring – This is for all the students who are still in School. It is mostly so that they can prepare for their exams better. This basically covers students from class 1 to class 12.This covers their basic subjects like English, Maths,
Hindi.
b. Computer Learning – This is for students who have already dropped out or are in higher standards. Typing, MS Word and MS Power point and other very important soft skills will be taught. This aims to make the students
Independent. This is the most important point in the Learning Program.
c. Higher Learning – This is for the students who know the basic soft skills.
Computer Software like Tally will be taught. The students will also be taught advanced courses like Robotics if they are really interested.
2. Understanding Social Entrepreneurship through hands-on experience.
Entrepreneurship is all about making a Model that people have trust on and more importantly are confident enough to invest in. This becomes particularly more important in the case of Social Entrepreneurship because the Investment model is not a profit earning one. But during the course of the project I made several contacts most of who received the project positively and helped me with the project as well as shaping its future. I think to understand Social Entrepreneurship; the most important aspect is to make a model that can be sustained in the future and not only for the time being. The organizations that were supported the project were: 8
a. Nirmaan: Nirmaan has helped in all the phases of the project, from the initiation. They helped me during the finalization of the village as well as helped me when I went there to teach. Nirmaan also sponsored the visits to the village as well as the events.
b. Journeys for Change: The mentors from Journeys for change contacted me about the project and were very keen on helping out. They invited me to a journey they conduct for 18 days and asked me to present the project to different people who are already Social Entrepreneurs or who have been an asset to the Society is some way. Even though I could not make it to the journey they were ready to support it in any way they can.
c. Valonia: I have collaborated with a Campus Based Start-up Valonia for the
“Abhilasha” Project. All the Formal details of the project have been finalized with Valonia and they are ready to sponsor the project until it self sustains it through other mediums.
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1.3 METHODOLOGY:
1. Identify the village where people are interested to learn and participate in a skill development program.
I began working on this project from the month of January and the first and foremost objective to be completed was the selection of a village, which had a number of dropouts and in which the native language of the people was one I was comfortable with. After some searching, I found that Farahnagar matched all the criteria I was looking for a perfect target group. Farahnagar is a sparsely populated village with a two-room school. The children of Farahnagar mostly attend schools outside the village but during weekends they come to the school to study or learn new things. The school is an Initiative of Ms. Arifa, a resident of the village who wanted the students to study and complete their Education instead of dropping out after primary education.
2. Frame a proper program/handout for students interested in the Program.
After searching for the Target Group, I began my work in the village by mid-
February and started teaching students. The number of students coming to study was approximately 10 each weekend. There were some other people, mostly drop outs, who came just out of Interest, to study or learn something new. 10
3. A boot camp would be set up in that village for Computer Education.
One among these people was Suleman, a first year degree student who wanted to learn Tally but to teach him that I first had to cover the basics.
I started by teaching him MS Word, MS Power point and basic things like typing. Along with him another girl, Nazin, currently in her 10th Standard who had dropped out but later admitted herself back into school, came to learn MS
Word.
In the next few weeks I taught the both of them basic typing skills and the basic features of MS Word and MS power point. The topics covered in MS
Word were writing a paragraph, writing a formal letter, editing a document and using other basic features. The topics covered in MS Power point were making a Presentation, using templates, editing and formatting a presentation.
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1.4 DATA COLLECTION:
Data is collected through social media, websites of organizations who have already been a part of such activities and other such relevant sources.
1.5 CHAPTER SCHEME
Chapter-1: Social Entrepreneurship
Chapter-2: Review of Literature
Chapter-3: History
Chapter-4: Modern Social Entrepreneurship
Chapter-5: Some Outstanding Examples
Chatpter-6: Theories of Entrepreneurship
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CHAPTER-2
LITERATURE REVIEW
2.1 Burkett, I & Langdon, D. 2005. ‘Social enterprise and social tendering: a guide for
Government departments, large social welfare organizations and corporations’.
It has been widely recognized that social enterprises need the support of governments and
Corporations in order to start-up and develop into strong, viable and sustainable businesses. This publication looks at the various experiences of social enterprises in south-east
Queensland, Australia. It details real policy solutions that the governments and corporations can adapt to support social enterprises to reach their social goals and achieve positive Outcomes.
2.2 Cramer, J., 2006. ‘Corporate social responsibility and globalization: an action plan for
Businesses’
This book reports on the findings of 20 diverse companies that participated in a three year
Program in incorporate corporate social responsibility into business practices, and offers
Strategies for other companies interested in starting down this path. The studies and
Guidelines are detailed, clear and concise.
2.3 Frances, Nic. 2009. ‘The end of charity: time for social enterprise’
This is a thought provoking exploration of why the idea of charity needs to be rethought in Order to properly address the problems of poverty, inequality, and environmental
Sustainability. The author argues that we need to become social entrepreneurs with real
Values at the core of the operations. This book looks at the authors own principles of social Entrepreneurship, based on the idea that the market can be a tool for delivering many Values other than profit.
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2.4 Hopkins, M. 2007. ‘Corporate social responsibility and international development: is
Business the solution?’
This book attempts to answer the question of ‘what is the potential of the private sector to
Foster development?’ It examines what corporations are currently doing on development,
What they could and should be doing, and also how corporate social responsibility can be a Useful tool for corporations to promote economic development.
2.5 Kasturi Rangan, V., 2005. ‘Business solutions for the global poor: creating social and
Economic value’ Conference on Global Poverty: Business Solutions and Approaches,
Harvard University.
This book has been based on research presented at the Harvard Business School’s first ever Conference on business approaches to poverty alleviation, and shines light on the various Perspectives of leading academics and corporate, non-profit, and public sector managers. The contributors draw on practical and inspirational insights from over twenty countries around the world.
2.6 Langdon, D. 2004. ‘Defining social enterprise: enterprising ways to address longterm
Unemployment.’
This publication looks at the experiences of social enterprises in south-east Queensland.
It looks at the ways in which the enterprises can address long term unemployment in both theory and practice. It is the first book in a series by The New Mutualism Group.
2.7 Lodge, G. & Wilson, C. 2006. ‘A Corporate Solution to Global Poverty.’ Princeton
University Press. “World leaders have given the reduction of global poverty top priority.
And yet it persists.
Indeed, in many countries whose governments lack either the desire or the ability to act,
Poverty has worsened. This book, a joint venture of a Harvard professor and an economist with the International Finance Corporation, argues that the solution lies in the creation of a New institution, the World Development Corporation (WDC), a partnership of multinational Corporations (MNCs), international development agencies, and nongovernmental Organizations (NGOs).
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In A Corporate Solution to Global Poverty, George Lodge and Craig Wilson assert that
MNCs have the critical combination of capabilities required to build investment, grow economies, and create jobs in poor countries, and thus to reduce poverty. Furthermore, they can do so profitably and thus sustainably. But they lack legitimacy and risk can be high, and so a collective approach is better than one in which an individual company proceeds alone. Thus a UN-sponsored WDC, owned and managed by a dozen or so
MNCs with NGO support, will make a marked difference. At a time when big business has been demonized for destroying the environment, enjoying one-sided benefits from globalization, and deceiving investors, the book argues, MNCs have much to gain from becoming more effective in reducing global poverty. This is not a call for philanthropy. Lodge and Wilson believe that corporate support for the World
Development Corporation will benefit not only the world's poor but also company shareholders as a result of improved MNC legitimacy and stronger markets and profitability.” 2.8 T J Joseph, V Nagi Reddy in their article “FDI spillovers and export performance of Indian manufacturing firms after Liberalization” opines that the spillovers from foreign direct investment through multinational enterprises have attracted considerable attention in recent times. Existing empirical studies on FDI spillovers largely look at the productivity enhancing effects and horizontal spillovers of foreign firms in the same industry sector ignoring the possibility of spillovers through buyer-supplier or backward linkages. The present study examines the impact of horizontal as well as backward spillovers from the presence of foreign firms, on the export performance of domestic firms in the Indian manufacturing industry during 1993-2008. Increased competition in the domestic market postliberalization through sales of foreign firms is forcing domestic firms to look for export markets. The results indicate that domestic firms are not benefited in improving their export performance through any buyer-supplier linkages with the mines. 15
2.9 Nicholls, A., 2006. ‘Social entrepreneurship: new models of sustainable social change’ Oxford; Melbourne.
This book presents a detailed multi-disciplinary view of the emerging area of social entrepreneurship. It provides exposure to many of the ideas currently within the movement, by combining visions of leading minds with academic commentary.
2.10 Yunus, M., 2007. ‘Creating a world without poverty: social business and the future of capitalism’
This book was written by the famous Dr Mohammad Yunus, an economics professor and founder of the Grameen Bank. This is quite a readable book, and examines the ways in which traditional capitalism cannot solve problems like inequality and poverty, due to human nature and the drive for profit. He states that this is not the case and humans are also driving by other passions, the spiritual, the social and the altruistic. This book tells stories of some of the earliest examples of social businesses, and reveals what Yunus sees as the next phase in the economic and social revolution which involves the worldwide effort of every human being to eliminate poverty.
2.11 Wilson, C. & Wilson, P. 2006. ‘Make Poverty Business’. Greenleaf Publishing, UK
“Poor people in developing countries could make excellent suppliers, employees and customers but are often ignored by major businesses. This omission leads to increased risk, higher costs and lower sales. Meanwhile, businesses are asked by governments and poverty activists to do more for economic development, but their exhortations are rarely based on a proper business case. It bridges the gap by constructing a rigorous profitmaking argument for multinational corporations to do more business with the poor. It takes economic development out of the corporate social responsibility ghetto and places it firmly in the core business interests of the corporation, and argues that to see the poor only as potential consumers misses half of the story. The book should be read by international business managers seeking to increase profits and decrease risk in developing countries, and by development advocates who seek to harness the profit motive to reduce poverty. The book makes numerous low-risk, low-cost
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recommendations for businesses and donors, all of which are rooted in a rigorous discussion of the underlying strategic and economic issues.
This book sees the poor as more than mere consumers at C K Prahalad's “bottom of the pyramid” and instead takes a strategic view of all the ways in which a multinational company can interact with and influence the lives of the poor. The poor face poverty traps when they seek to deal with an international company. Based on sound economic theory and emerging good business practice the book recommends low-cost ways to overcome these traps and gain access to a larger and cheaper pool of employees and suppliers. The poor can also become a threat – to reputation and security – if relationships are badly managed. The book integrates concerns over political risk, legal failure and physical security into a business case for reducing poverty. It argues that country risk is something that can be actively reduced through economic development rather than passively managed with lawyers and guards.
‘Make Poverty Business’ argues that doing business with the poor can be profitably integrated into the core operations of all multinational companies, not only in those consumer manufacturers who see a marketing opportunity or those major corporations who feel under PR pressure to do some cosmetic corporate social responsibility. The book examines the successes, failures and missed opportunities of a wide range of global companies including Wal-Mart, BP, Unilever, Shell and HSBC when dealing with the poor and with development advocates in the media, NGOs, governments and international organisations. It includes a discussion on how to use a poverty perspective to provoke profitable innovation – not only to create new products and services but also to find new sources of competitive advantage in the supply chain and to develop more sustainable, lower-cost business models in developing countries.”
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REFERENCES:
1. Burkett, I & Langdon, D. 2005. ‘Social enterprise and social tendering: a guide for government departments, large social welfare organisations and corporations’
2. Cramer, J., 2006. ‘Corporate social responsibility and globalisation: an action plan for business’
3. Frances, Nic. 2009. ‘The end of charity: time for social enterprise’
4. Hopkins, M. 2007. ‘Corporate social responsibility and international development: is business the solution?’
5. Kasturi Rangan, V., 2005. ‘Business solutions for the global poor: creating social and economic value’ Conference on Global Poverty: Business Solutions and
Approaches, Harvard University.
6. Langdon, D. 2004. ‘Defining social enterprise: enterprising ways to address longterm unemployment.’ 7. Lodge, G. & Wilson, C. 2006. ‘A Corporate Solution to Global Poverty’.
Princeton University Press.
8. “FDI Spillovers And Export Performance Of Indian Manufacturing Firms After
Liberalization” by T J Joseph, V Nagi Reddy
9. Nicholls, A., 2006. ‘Social entrepreneurship: new models of sustainable social change’ Oxford; Melbourne.
10. Yunus, M., 2007. ‘Creating a world without poverty: social business and the future of capitalism’
11. Wilson, C. & Wilson, P. 2006. ‘Make Poverty Business’. Greenleaf Publishing,
UK
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CHAPTER 3
HISTORY:
The terms social entrepreneur and social entrepreneurship were used first in the literature on social change in the 1960s and 1970s. The terms came into widespread use in the
1980s and 1990s, promoted by Bill Drayton the founder of Ashoka: Innovators for the
Public, and others such as Charles Leadbeater. From the 1950s to the 1990s Michael
Young was a leading promoter of social enterprise and in the 1980s was described by
Professor Daniel Bell at Harvard as 'the world's most successful entrepreneur of social enterprises' because of his role in creating more than sixty new organizations worldwide, including the School for Social Entrepreneurs (SSE) which exists in the UK, Australia and Canada and which supports individuals to realise their potential and to establish, scale and sustain, social enterprises and social businesses. Another British social entrepreneur is Lord Mawson OBE. Andrew Mawson was given a peerage in 2007 because of his pioneering regeneration work. This includes the creation of the renowned
Bromley by Bow Centre in East London. He has recorded these experiences in his book
"The Social Entrepreneur: Making Communities Work" and currently runs Andrew
Mawson Partnerships to help promote his regeneration work. The National Center for
Social Entrepreneurs was founded in 1985 by Judson Bemis and Robert M. Price, and Jerr Boschee served as its president and CEO from 1991 to 1999.
During the nineteenth and twentieth centuries some of the most successful social entrepreneurs successfully straddled the civic, governmental, and business worlds - promoting ideas that were taken up by mainstream public services in welfare, schools, and health care.
Although Drayton’s Ashoka is just 25 years old, the concept of social entrepreneurship is centuries old.
The pioneers of social entrepreneurship in the 19th Century include many renowned personalities in history.
1. Robert Owen (1771-1858) - This mill owner was a pioneer in improving working conditions at factories. He laid the foundation of the cooperative movement by opening a store for factory workers to buy goods of sound quality at little more than wholesale cost and restricting the sale of alcohol. He was also the founder of infant childcare in Great Britain
2. Florence Nightingale (1820-1910) - Perhaps the most famous social entrepreneur in history, she founded the world’s first nursing school and developed modern nursing practices.
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3. Henry Durant (1829-1910) - This French businessman, who witnessed first-hand the suffering of soldiers in the Austro-Sardinian War of 1859, lobbied for national voluntary relief organizations to help nurse wounded soldiers during war and for development of international treaties to guarantee protection of medicos and those wounded on the battlefield. His efforts led to the establishment of the International
Red Cross.
4. William Booth (1829-1912) - William and his wife Catherine established the East
London Christian Mission in 1865 to perform evangelical, social, and charitable work and to bring the Christian message to the poor, destitute, and hungry by meeting both their physical and spiritual needs. In 1878, he reorganized the mission along military lines and called it “The Salvation Army,” open to all regardless of race, color, or creed.
5. Frederick Law Olmstead (1822-1903) - He espoused the "City Beautiful" movement aimed at transforming cities with open space, and developed many famous urban parks such as Rock Creek Park in Washington D.C. and Boston's
Emerald Necklace. His efforts were instrumental in changing the very concept of cities from primary centers of commerce to “nice places to live and work.”
Social Entrepreneurship in the Early 20th Century
Social Entrepreneurship in the early 20th Century remained more or less a continuation of the movement that started in the 18th Century. Some of the leading luminaries of social entrepreneurship in the early 20th Century include:
1. Dr. Maria Montessori (1870-1952) - She established the “Casa dei Bambini”
(Children's House) in Rome to further her idea of education reform based on the premise that children teach themselves, unassisted by adults. Her methods evolved into the famous Montessori method of early childhood education.
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2. William "Bill" Drayton(1943-present) – He is a social entrepreneur. Born in
1943 in New York City, U.S. Drayton was named by US News & World Report as one of America's 25 Best Leaders in 2005. He is responsible for the rise of the phrase "social entrepreneur",[citation needed] a concept first found in print in
1972.Drayton is the founder and current Chair of Ashoka: Innovators for the
Public, a nonprofit organization dedicated to finding and fostering social entrepreneurs worldwide. Drayton also chairs the Community Greens, Youth
Venture. Drayton's philosophy of social entrepreneurs is Individuals with innovative solutions to society's most pressing social problems. To quote Drayton,
"Social entrepreneurs are not content just to give a fish or teach how to fish. They will not rest until they have revolutionized the fishing industry."
3. John Muir (1838-1914) - This naturalist, conservationist, inventor, and writer established the Sierra Club and worked with President Roosevelt to establish the
U.S. national park system, lobbying against the devastation of the Sierra Nevada caused by ranching. Muir personally involved himself in the establishment of
Sequoia, Mount Rainier, Petrified Forest, and Grand Canyon national parks.
4. Franklin Delano Roosevelt (1882-1945) - This US President passes as a social entrepreneur for his role in establishing the Tennessee Valley Authority to overcome the effects of the Great Depression. The Tennessee Valley Authority revitalized local economy by harnessing the power of the local rivers to create cheaper energy.
5. Michael Young (9 August 1915 – 14 January 2002)- He was a British sociologist, social activist and politician who coined the term "meritocracy".
During an active life he was instrumental in shaping Labour Party thinking, when secretary of the policy committee of the Labour party was responsible for drafting
"Let Us Face the Future", Labour's manifesto for the 1945 general election, was a leading protagonist on social reform, and founded or helped found a number of socially useful organizations. These include the Consumers' Association, Which? magazine, the National Consumer Council, the Open University, the National
Extension College, the Open College of the Arts and Language Line, a telephoneinterpreting business. 21
6. Andrew Mawson (born 1954)- He is an English social entrepreneur. He is best known for his pioneering work at the Bromley by Bow Centre in East London, which became the UK's first Healthy Living Centre. The Bromley by Bow Centre is a community organization which encompasses an array of integrated social enterprises based around art, health, education and an array of practical skills.
Mawson received an OBE in the Millennium New Year Honours List for his work there since 1984. In 1998 he co-founded the Community Action Network, a UK national charity, and remained its President until 2010.[2] He was also a founder board member of Poplar HARCA. In 2006 he launched the Water City initiative for East London with Richard Rogers, aiming to revitalize the neglected waterways of East London, making use of their potential as transport links.
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CHAPTER-4
MODERN SOCIAL ENTREPRENEURSHIP
Trends from the preceding two decades show that social entrepreneurs have moved from their traditional philanthropic and charitable moorings to find more effective and sustainable solutions to social problems using the tools from the world of business.
One of the earliest such modern day social entrepreneurship initiative is Oxfam or Oxford
Committee for Famine Relief established in 1942 by a group of social activists, and
Oxford academics.
The modern form of corporate based social entrepreneurship, however, starts with
Michael Young, who between the 1950s and 1990s created more than sixty new organizations worldwide, including a series of Schools for Social Entrepreneurs in the
UK.
Jeff Skoll, a noted philanthropist and eBay’s first president established the Skoll
Foundation in 1999 to help people continue or expand their work for social change in various parts of the world. The Skoll Centre for Social Entrepreneurship at the Said
Business School at Oxford University supports social entrepreneurship.
Well-knowncontemporary social entrepreneur includes Muhammad Yunus, founder and manager of Grameen Bank and its growing family of social venture businesses, who was awarded a Nobel Peace Prize in 2006. The work of Yunus and Grameen echoes a theme among modern day social entrepreneurs that emphasizes the enormous synergies and benefits when business principles are unified with social ventures. In some countries - including Bangladesh and to a lesser extent, the USA - social entrepreneurs have filled the spaces left by a relatively small state. In other countries - particularly in Europe and
South America - they have tended to work more closely with public organizations at both the national and local level.
In India, a social entrepreneur can be a person, who is the founder, co-founder or a chief functionary (may be president, secretary, treasurer, chief executive officer (CEO), or chairman) of a social enterprise, which primarily is a NGO, which raises funds through some services (often fund raising events and community activities) and occasionally products. Rippan Kapur of Child Rights and You and Jyotindra Nath of Youth United,
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are such examples of social entrepreneurs, who are the founders of the respective organizations. Today, nonprofits and non-governmental organizations, foundations, governments, and individuals also play the role to promote, fund, and advise social entrepreneurs around the planet. A growing number of colleges and universities are establishing programs focused on educating and training social entrepreneurs. Wittenberg University in
Springfield, OH recently established a partnership between the entrepreneurship department and Village Markets of Africa, allowing students hands-on experience with an organization working directly with producers.
In the UK in 2002 seven leading nonprofit organisations established UnLtd - The
Foundation for Social Entrepreneurs. It holds a £100 million endowment especially to invest in social entrepreneurs in the UK. Un Ltd provides individuals with cash awards and practical support that includes coaching, training, and networking opportunities to help develop community projects. UnLtd Ventures is the in-house consultancy division of
UnLtd and focuses on a number of outstanding social entrepreneurs, providing them with business support and helping them to scale up or replicate their organisations or get investment ready. Another of their operations, UnLtd Research, is becoming the world's primary source of evidence and thinking around social entrepreneurship. Its central purpose is to lead the global business, public policy, and academic debates about the role of social entrepreneurship in community regeneration, employment, and growth strategies. The George Foundation's Women's Empowerment program empowers women by providing education, cooperative farming, vocational training, savings planning, and business development. In 2006 the cooperative farming program, Baldev Farms, was the second largest banana grower in South India with 250 acres (1.0 km2) under cultivation.
Profits from the farm are used for improving the economic status of the workers and for running the other charitable activities of the foundation.
Some have created for-profit and for-a-difference organizations. A recent example is
Vikram Akula, the McKinsey alumnus who started a microlending venture, SKS
Microfinance, in villages of Indian state of Andhra Pradesh. Although this venture is for profit, it has initiated a sharp social change amongst poor women from villages. A great
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example is the activity of Brent Freeman, Norma LaRosa, and Nick Reder the cofounders of Roozt.com a new e-commerce site in the United States that connects online shoppers with socially responsible, social entrepreneur vendors through a daily deal format. Each customer's purchase also donates to a monthly cause. This online shopping site aims to empower everyday online shoppers to make a difference in the world through everyday purchases and is committed to providing double bottom line value with every sale. There are continuing arguments over precisely who counts as a social entrepreneur. The lack of consensus on the definition of social entrepreneurship means that other disciplines are often confused with and mistakenly associated with social entrepreneurship.
Philanthropists, social activists, environmentalists, and other socially-oriented practitioners are referred to as social entrepreneurs. It is important to set the function of social entrepreneurship apart from other socially oriented activities and identify the boundaries within which social entrepreneurs operate. Some have advocated restricting the term to founders of organizations that primarily rely on earned income – meaning income earned directly from paying consumers. Others have extended this to include contracted work for public authorities, while still others include grants and donations.
This argument is unlikely to be resolved soon. Peter Drucker, for example, once wrote that there was nothing so entrepreneurial as creating a new university: yet in most developed countries the majority of university funding comes from the state.
Organizations such as Ashoka: Innovators for the Public, the Skoll Foundation, the
Omidyar Network, the Schwab Foundation for Social Entrepreneurship, Athgo, Root
Cause, the Canadian Social Entrepreneurship Foundation, NESsT, New Profit Inc.,
National Social Entrepreneurship Forum, and Echoing Green among others, focus on highlighting these hidden change-makers who are scattered throughout the world.
Ashoka's Changemakers "open sourcing social solutions" initiative Changemakers uses an online platform for what it calls collaborative competitions to build communities of practice around pressing issues.
The North American organizations tend to have a strongly individualistic stance focused on a handful of exceptional leaders, while others in Asia and Europe emphasize more how social entrepreneurs work within teams, networks, and movements for change. The
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Skoll Foundation, created by eBay's first president, Jeff Skoll, makes capacity-building
"mezzanine level" grants to social entrepreneurial organizations that already have reached a certain level of impact, connects them through the annual Skoll World Forum and
Social Edge, the Foundation's online community, and highlights their work through partnerships with the Sundance Institute, Frontline World, NewsHour with Jim Lehrer, and other film and broadcast outlets. Skoll also supports the field of social entrepreneurship, including through Skoll's founding of the Skoll Centre for Social
Entrepreneurship at the Said Business School at Oxford University. Examples of social entrepreneurial business in the USA include NIKA Water Company, which sells bottled water in the USA and uses 100% of its profits to bring clean water to those in the developing world, as well as Newman's Own which donates 100% of its profits to support various educational charities.
Youth social entrepreneurship is an increasingly common approach to engaging youth voice in solving social problems. Youth organizations and programs promote these efforts through a variety of incentives to young people. One such program is Young
Social Pioneers, which invests in the power and promise of Australia's young leaders.
The program, which is an initiative of The Foundation for Young Australians, strengthens, supports and celebrates the role of young people in creating positive change in their communities. About Face International has a program that promotes youth social entrepreneurship amongst middle school, high school, and college students by providing interest-free loans, grants, and mentorship. They also help middle schools, high schools, and colleges form youth social entrepreneurship after-school clubs on site. Roozt's business model parallels such an approach by "paying it forward" with their commitment to help educate today's youth about the fundamentals of socially responsible businesses so that they may become progressive leaders of tomorrow. National Social
Entrepreneurship Forum, founded by Yashveer Singh is support organisation for promoting social entrepreneurship amongst Indian Universities and youth.
Istanbul Bilgi University launched the BİLGİ Young Social Entrepreneur Awards project in May 2010 to identify, educate, and provide financial support for young social entrepreneurs in Turkey. Cooperating with International Youth Foundation,
Sylvan/Laureate Foundation and TEGV, through this comprehensive strategy, İstanbul
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Bilgi University seeks to contribute to the development of a new generation of socially conscious citizens leading change in their communities.
Another youth social entrepreneurship organization is rooted in Turkey, the organization named SOGLA (The Academy of Young Social Entrepreneurs). SOGLA provides young entrepreneur candidates (named SOGLA pioneers) with a high quality of education, and supports pioneers to develop, start-up, and sustain their social entrepreneurship projects.
The internet and social networking websites have been pivotal resources for the success and collaboration of many Social Entrepreneurs. These media allow ideas to be heard by broader audiences, help networks and investors to develop globally, and achieve their goals with little or no start-up capital. For example, starting with no capital and just an interesting idea, three Australian students (1egg1world) are in the process of raising
AUS$1million for Charity starting out with just one egg, an excellent example of the growing opportunities brought by the internet to people with good ideas.The US-based nonprofit Zidisha leverages the recent spread of internet and mobile technologies in developing technologies to provide an eBay-style microlending platform where disadvantaged individuals in developing countries can interact directly with individual
"peer-to-peer" lenders worldwide, sourcing small business loans at lower cost than has ever before been possible in most developing countries.
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CHAPTER-5
SOME OUTSTANDING EXAMPLES
a. Ashoka: Innovators for the Public
Ashoka: Innovators for the Public is a nonprofit organization based in Arlington, VA, supporting the field of social entrepreneurship. Ashoka was founded by Bill Drayton, who has been called "the godfather of social entrepreneurship", in 1981 to identify and support leading social entrepreneurs through a Social Venture Capital approach with the goal of elevating the citizen sector to a competitive level equal to the business sector. The organization currently operates in over 70 countries and supports the work of over 2,000 social entrepreneurs, elected as Ashoka Fellows. Ashoka also creates what it calls
"mosaics" of best practices that map the commonalities and intersections of key principles that guide Fellows’ individual solutions. Ashoka’s initiatives include
Changemakers, Youth Venture, and Full Economic Citizenship.
The following are Ashoka’s Programs:
1. Changemakers
Changemakers sponsors collaborative competitions intended to develop innovative solutions to social problems. The open sourcing social solutions model aims to challenge the traditional focus of issues like human trafficking and conflict resolution with a broader, more complete set of stakeholders. Participants include individuals, nonprofits, nongovernmental organizations, public corporations, private companies, and government agencies. Social entrepreneurs can post their project information on the Changemakers.com website. Any visitor to the website can view these projects and registered users can communicate with participants to help refine and improve their project up until the competition deadline. The website also serves as a library resource for social entrepreneurs, with information on a variety of topics such as aging, health, and rural development. 28
Changemakers was founded in 1994 by Sushmita Ghosh, the president emerita of
Ashoka, and originally started as a magazine based in Calcutta, India. The project was placed online in 1998.
Changemaker Campus Initiative
Ashoka is working to develop new models for higher education, envisioning a day when universities everywhere serve as an enabling environment in which every individual has access to the resources, learning opportunities, role models, and peer community needed to actualize their full potential as changemakers. Through the Changemaker Campus partnership, Ashoka U works with teams of entrepreneurial students, faculty, and staff from across campus to transform select universities into hubs for social innovation. Now in its second year, the Changemaker Campus Consortium includes Babson College,
College of the Atlantic, Cornell University, George Mason University, Johns Hopkins
University, The New School, Tulane University, the University of Colorado at Boulder, and the University of Maryland–all chosen specifically on their ability and readiness effect cross-campus change.
2. Youth Venture
Youth Venture invests in teams of young people to start and lead their own social ventures. The concept for Youth Venture emerged following an Ashoka Fellow collaboration around youth and civic participation. Currently, Youth Venture operates in the US, Mexico, Argentina, Brazil, India, South Africa, Thailand, and across Europe.
Ashoka Youth Venture works with "iCivics", Sandra Day O'Connor's civics-education initiative, to encourage youth activism through Impact Projects.
b. Schwab Foundation for Social Entrepreneurship
The Schwab Foundation for Social Entrepreneurship provides platforms at the country, regional and global levels to promote social entrepreneurship.
Professor Klaus Schwab created the World Economic Forum as an independent not-forprofit foundation in 1971.
In 1998, Klaus Schwab and his wife Hilde decided to create a second complementary foundation, the Schwab Foundation for Social Entrepreneurship, with the purpose to promote social innovation.
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Pamela Hartigan, who joined in October 2000, was its first managing director.
c. Grameen Bank
The Grameen Bank is a microfinance organization and community development bank started in Bangladesh that makes small loans (known as microcredit or "grameencredit") to the impoverished without requiring collateral. The name Grameen is derived from the word gram which means "rural" or "village" in the Bengali language.
The system of this bank is based on the idea that the poor have skills that are underutilized.
A group-based credit approach is applied which utilizes the peer-pressure within the group to ensure the borrowers follow through and use caution in conducting their financial affairs with strict discipline, ensuring repayment eventually and allowing the borrowers to develop good credit standing. The bank also accepts deposits, provides other services, and runs several development-oriented businesses including fabric, telephone and energy companies. Another distinctive feature of the bank's credit program is that the overwhelming majority (98%) of its borrowers are women.
The origin of Grameen Bank can be traced back to 1976 when Professor Muhammad
Yunus, a Fulbright scholar at Vanderbilt University and Professor at University of
Chittagong, launched a research project to examine the possibility of designing a credit delivery system to provide banking services targeted to the rural poor. In October 1983, the Grameen Bank Project was transformed into an independent bank by government legislation. The organization and its founder, Muhammad Yunus, were jointly awarded the Nobel Peace Prize in 2006; the organization's Low-cost Housing Program won a
World Habitat Award in 1998.
The Grameen Bank (literally, "Bank of the Villages", in Bengali) is the outgrowth of
Yunus' ideas. The bank began as a research project by Yunus and the Rural Economics
Project at Bangladesh's University of Chittagong to test his method for providing credit and banking services to the rural poor. In 1976, the village of Jobra and other villages surrounding the University of Chittagong became the first areas eligible for service from
Grameen Bank. The Bank was immensely successful and the project, with support from the central Bangladesh Bank, was introduced in 1979 to the Tangail District (to the north of the capital, Dhaka). The bank's success continued and it soon spread to various other
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districts of Bangladesh. By a Bangladeshi government ordinance on October 2, 1983, the project was transformed into an independent bank. Bankers Ron Grzywinski and Mary
Houghton of Shore Bank, a community development bank in Chicago, helped Yunus with the official incorporation of the bank under a grant from the Ford Foundation. The bank's repayment rate was hit following the 1998 flood of Bangladesh before recovering again in subsequent years. By the beginning of 2005, the bank had loaned over USD 4.7 billion and by the end of 2008, USD 7.6 billion to the poor.
The Bank today continues to expand across the nation and still provides small loans to the rural poor. By 2006, Grameen Bank branches numbered over 2,100. Its success has inspired similar projects in more than 40 countries around the world and has made World
Bank to take an initiative to finance Grameen-type schemes.
The bank gets its funding from different sources, and the main contributors have shifted over time. In the initial years, donor agencies used to provide the bulk of capital at very cheap rates. In the mid-1990s, the bank started to get most of its funding from the central bank of Bangladesh. More recently, Grameen has started bond sales as a source of finance. The bonds are implicitly subsidised as they are guaranteed by the Government of
Bangladesh and still they are sold above the bank rate.
d. SKS Microfinance
SKS Microfinance Limited (SKS) is a non-banking finance company (NBFC), regulated by the Reserve Bank of India. SKS claims its mission is to eradicate poverty by providing financial services to the poor. The company operates across these 19 states of India:
Andhra Pradesh, Karnataka, Maharashtra, Orissa, Madhya Pradesh, Bihar, Uttar Pradesh,
Rajasthan, Uttaranchal, Himachal Pradesh, Haryana, West Bengal, Jharkhand,
Chhattisgarh, Gujarat, Kerala, Tamil Nadu, Punjab and Delhi.
According to a CRISIL Report on Top 50 Indian Microfinance Institutions (MFIs), SKS
Microfinance is the largest MFI in India in terms of number of borrowers, number of branches and total loans as of September 30, 2008. Founded in 1997 by current chairperson Vikram Akula, SKS as of December 31, 2010, has 7.7 million clients (2010) in 2,403 branches in the 19 states across India. SKS charges an annual effective interest rate between 26.7% and 31.4% for core loan products. At the end of 2010's financial year
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on 31 March 2011, the company listed a gross loan portfolio of US$925,844,433 with
6,242,266 female active borrowers.
SKS hopes "to serve 50 million households across India and other parts of the world and also to create a commercial microfinance model that delivers high value to our customers". The hope is that much poverty can be alleviated by providing financial services to low-income households.
SKS practices a standardised processes of delivering and recovering loans, which enables them to reach out to the most customers cost effectively. They are able to expand the business to reach further villages by charging a small interest rate, one that clients are willing to pay in order to avoid starvation, poor money management, or government loan sharks. An in-depth Associated Press report on February 24, 2012, implicated SKS in a number of suicides linked to the company's loan collection policies. Company officials denied the claim, but the Associated Press said internal documents, as well as interviews with more than a dozen current and former employees, independent researchers and videotaped testimony from the families of the dead, showed top SKS officials had information implicating company employees in some of the suicides.
SKS Microfinance follows the Joint Liability Group (JLG) model. The methodology involves lending to individual women, utilising five member groups where groups serve as the ultimate guarantor for each member. Through the innovation of group lending, situations of adverse selection and moral hazard due to asymmetric information are better managed. Social collateral replaces asset collateral (which is lacking in the poorer segments of society), and such a system works because India is still a highly communitycentric society. The concept of honour and respect within society is deeply rooted in the
Indian psyche and willful default may invite condescending glances, humiliation and even ostracism.
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e. National Social Entrepreneurship Forum
National Social Entrepreneurship Forum (NSEF) is an award winning non-profit organization supporting youth-driven social innovations & entrepreneurship in India.
National Social Entrepreneurship Forum (NSEF) founded by Yashveer Singh and
Srikumar Murthy G in the year 2009 at Bangalore, India. Since its inception, NSEF has undertaken social entrepreneurial activities in several academic institutes and cities across
India and has worked in collaboration with various organizations such as Villgro,
Samhita Social Ventures, NASSCOM Social Innovation Honours Ashoka: Innovators for the Public #Changemakers, and Sankalp Forum to enable youth-driven social innovations and young social entrepreneurs. NSEF has successfully trained and inspired thousands of students through its programs across India.
Programs by NSEF include:
NSEF Idea Conferences-A platform to educate students about social innovations and to provide them with a launch pad for their social entrepreneurial ideas.
NSEF Authors of Change Program - A solutions delivery program for key challenges that social organizations are facing, by connecting them to student talent from across the country through internships.
NSEF Fellowship - A support program for students who start social ventures after completing college, to connect them with the resources and network they would need to grow their ventures.
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CHAPTER-6
THEORIES OF ENTREPRENEURSHIP
Theory is not merely bookish. Theory helps us to comprehend phenomena better.
Understanding theory one can apply the same in practice more effectively. Various theories of Entrepreneurship have been propounded by thinkers. These can be classified mainly in three categories:
1. Sociological
2. Economic
3. Cultural
1. Sociological Theories of Entrepreneurship:
• Entrepreneurship is likely to get a boost in a particular social culture
• Society’s values, religious beliefs, customs, taboos influence the behavior of individuals in a society
• The entrepreneur is a role performer according to the role expectations by the society a) Max Weber’s Theory
Salient features of his theory are:
Spirit of Capitalism is highlighted
Adventurous spirit facilitate taking risk
Protestant ethic embodying rebellion is conducive
Inducement of profit is the criterion
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b) E.E. Hagen’s Theory
1. Reveals general model of the social- interrelationship among physical environment, social structure, personality and culture.
2. Thinks economic theories are inadequate
3. Political & social change – catalyst for entrepreneurs.
4. Rejects follower’s syndrome imitating western technology. Technology is an integral part of socio- cultural complex.
5. Historic shift as a factor initiates change
2. Economic Theories of Entrepreneurship:
• Entrepreneurship and economic growth take place when the economic conditions are Favorable
• Economic incentives are the main motivators for entrepreneurial activities
• Economic incentives include taxation policy, industrial policy, sources of finance and raw material, infrastructure availability, investment and marketing opportunities, access to information about market conditions, technology
a) Schumpeter’s Theory of innovation
Joseph Schumpeter believes that entrepreneur helps the process of development in an economy. He says that an entrepreneur is the one who is innovative, creative and has a foresight Development implies carrying one of new combinations of entrepreneurship.
‘Entrepreneur’ is an innovator – who carries new combination of:
a. New goods/ services.
b. New methods of production.
c. New Market.
d. New source of supply of raw materials.
e. New organization.
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b) HBS (Harvard Business School) consider entrepreneurship is the outcome of the combination of internal and external Forces.
Internal forces – Individual’s traits and qualities viz:
a. Intelligence
b. Skill
c. Knowledge
d. Intuition
e. Exposure & Experience
External forces – Surrounding’s conditions viz:
a. Economic
b. Political
c. Social & Cultural
d. Legal frame-work
e. Stable Government External security, law & order and legal process are the influencing factors.
3. Cultural Theories of Entrepreneurship
•Entrepreneurship gets a boost when society has sufficient supply of individuals with necessary psychological characteristics
•The psychological characteristics include need for high achievement, a vision or foresight, ability to face opposition
•These characteristics are formed during the individual’s upbringing which stress on standards of excellence, self-reliance and low father dominance.
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a) Hoselitzs Theory
He explains that the supply of Entrepreneurship is governed by cultural factors & culturally minority groups are the spark – plugs of entrepreneurial economic development. i) Marginal men - Reservoir of entrepreneurial development . Ambiguous positions from a cultural or social statement make them creative. ii) Emphasis on skills – Who possess extra-ordinary skills. Function of managerial additional personal traits & leadership skills. Additional personal traits. Exportation of profit Ability to lend. iii) Contribution of Social Classes - Socio-economic economic background of specific classes make them entrepreneurs. Family patterns in France, Protestants in UK/USA &
Parsees in India.
b) Peter F Drucker on Entrepreneurship
“An entrepreneur is one who always searches for change, rapidness to it and exploits it as an opportunity.”
He emphasizes on:
a. Innovation
b. Resource
A thing is regarded as resource when its economic value is recognized. Example- Fixed salary can also be an opportunity. Thus installment purchase was introduced.
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c) ECO Model
i. Entrepreneurship ii. Creativity iii. Organization
Theory of High Achievement/Theory of Achievement Motivation
McClelland identified 2 characteristics of entrepreneurship
The first was Doing things in a new and better way and the second was Decision making under uncertainty.
He stressed that people with high achievement orientation (need to succeed) were more likely to become entrepreneurs. Such people are not influenced by money or external incentives. They consider profit to be a measure of success and competency.
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CONCLUSION
According to all the theories of Entrepreneurship and the work done by different social enterprises on different social issues, I have started to work on my own Social Enterprise which focuses on Providing Skill Development to Under-Privileged students in villages.
Currently It is in collaboration with Valonia, a campus based start-up under the project
Abhilasha and I hope that in some time it’ll become a self-sustaining project.
Providing Education to people is one thing but I think that making them Skilled in a certain area is a completely different aspect to teaching. When we make them skilled in a certain field of work, they can earn a living which is a very important thing to do because to raise everyone above the poverty line should be the main aim of this nation.
I have selected Farahnagar as the village to initiate the project. Farahnagar is a small
Hindi speaking village in Andhra Pradesh where the dropout rate in schools is very high.
I am teaching people some basic computer skills so that they not only learn something new but also earn a decent living after the program. At the end of the project this semester I taught two of the student’s basic computer software like Microsoft Word and
Microsoft power point. I also taught the students there in primary classes, how to study different subjects beyond the books and gain knowledge. From August onwards I am planning to teach them more complex computer software which will enable them to do something on their own.
This has been a very kind and giving experience and I hope that I am able to continue it for the years to come.
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