At Compass Partners, we strive to empower young social entrepreneurs. People often ask us what we believe social entrepreneurship is and how we think social entrepreneurship differs from entrepreneurship. Those are great questions. Undoubtedly, entrepreneurship creates jobs, improves people’s quality of life, and moves resources into more productive parts of the economy. These benefits are valuable and surely produce social good.
So why do we emphasize social entrepreneurship? Isn’t conventional entrepreneurship good enough? Social entrepreneurship recognizes how the power of entrepreneurship can be harnessed to innovate solutions to social problems. Whereas traditional entrepreneurship focuses on developing an idea and maximizing profit, social entrepreneurship emphasizes the intention of the entrepreneur to solve some social problem directly through his or her work.
One important feature of social entrepreneurship is that it makes use of both financial and social capital. This practice makes it especially useful because social entrepreneurship is most needed in many places where financial capital is least available. It should come as no surprise that communities around the world with limited financial resources are identifying the social and human capital assets they already have and creating change with these resources. In both developing and developed countries, social entrepreneurs who have relatively little access to financial capital are tapping the social capital all around them to drive change. As part of this asset mapping process, social entrepreneurs insist that every individual has the capacity to create social change.
We believe in social entrepreneurship because it is suited well for the challenges we face in this century. The traditional division between for-profit entrepreneurship and non-profit work is outdated. Most people recognize that business has remarkable power to change the world. They also realize that the traditional work of nonprofits could be improved by integrating some practices from the for-profit world.
Our ideas about what for-profit and nonprofit corporations are capable of aren’t the only views we need to revise. We need a paradigm shift that properly views individual activists, intrapreneurs, and innovative social enterprises as powerful agents of change. Fitting somewhere in between conventional entrepreneurs and traditional nonprofit leaders, social entrepreneurs create lasting and financially sustainable change. With governments around the world slashing budgets for public programs, social entrepreneurs are delivering public value with the resources they already have. In a world with scarce resources, traditional entrepreneurs who mobilize resources for more economically productive uses are definitely doing something positive. But in a world with no scarcity of social ills, we need social entrepreneurs to tackle these difficult problems head on.
We have found that young people are particularly interested in social entrepreneurship. Often underrepresented in the traditional halls of power, young people want to contribute to social good in every aspect of their lives. Regardless of whether they work for large corporations or tiny nonprofits, young people want to work somewhere that innovates, makes a difference, and remains sustainable. Work is not “just a job,” divorced from one’s life outside the office. Our generation demands more coherence among the different roles we all have as workers, volunteers, siblings, neighbors, etc. Social entrepreneurship is open to anyone who wants to develop sustainable solutions to the world’s biggest problems using the lessons from the business and nonprofit worlds.
One of our four core values is to live consciously. We believe that one of the practices that separates social entrepreneurs from traditional ones is that social entrepreneurs live consciously in all aspects of their lives, including their ventures. Their social enterprises are manifestations of their commitment to reflect, develop personally and professionally, be humble about success and honest about failure, and acknowledge their responsibility to give back. This gratitude for one’s gifts and the duty to contribute to a better world are crucial aspects of being a social entrepreneur. The world would be a better place if more people—not just social entrepreneurs—lived consciously. The power of social entrepreneurship is that it is a more conscious and sustainable way of changing the world.
We want to hear what you think about why social entrepreneurship matters. Milton Friedman wrote that a business’s only social responsibility is to increase its profits. Was he right or does a business have responsibilities to people who are not shareholders in the company?
And if people are unhappy that large corporations rarely have missions other than profits, what options are out there for social businesses to scale? Are B-Corps and Benefit Corporations the only logical way to scale social businesses across the country?