An entrepreneur is someone who seeks and recognizes opportunities then goes ahead to invest private resources in the venture to generate value. Social entrepreneurs identify problems within the society and using the same framework or principles of generating value, they come up with an activity, venture or undertaking that is geared towards creating or enhancing a social change (Dees, Emerson, & Economy, 2002). Many a times this is confusing with regards to the business entrepreneurship process because businesses are associated with social entrepreneurship and therefore, a keen eye is needed to scrutinize and separate the two aspects. The main objective and value targeted in business entrepreneurship is profits and returns on investments while social entrepreneurship main objective is to generate social capital. Social capital is the strength of connections and links of interaction within a society that enhances productive benefit for the majority (Doherty & Thompson, 2006). A social entrepreneur therefore lives to pursue social objectives as well as goals that address environmental issues. This tends to be out of the good of humanity and so associated with nonprofit making or voluntary services which have been coined in the language of large enterprises or successful wealthy individuals as Philanthropy. This however must not be misconstrued to mean profits or gains are excluded. Therefore a social enterprise is an entity that employs business plans and policies in order to accomplish its philanthropic objectives (Dees, Emerson, & Economy, 2002). By an organization having set up social objectives does not automatically qualify them to be social entrepreneurs. If by any chance they have the slightest perception that such objectives will improve their financial worth then their ventures remain social objectives. This can however be looked from a different perspective if the long run intention of the financial gains is to meet more philanthropic objectives aimed at generating and creating more social capital. Therefore, social enterprise is important because it creates social capital which is the backbone of each and every development or benefit to the larger human society as opposed to individual benefits.
Importance of social entrepreneurship
Social entrepreneurship is important because it clearly depicts a mode of change that is earnestly needed globally. At a time defined by increasing globalization activities and massive technological advancements, the welfare of the society is no longer contained within small cells of communities but is moving beyond administrative and geographical boundaries (Doherty & Thompson, 2006). Social entrepreneurship is a key factor that is integral in emphasizing collective responsibility and mutual distribution of benefits based on benefits to the society and the world at large. It controls the levels of individual investment based on humanitarian grounds and general uplift of the communities. This is of utmost importance because it encourages private citizens that are willing to participate in various roles of the government to identify their boundaries and various measures of support that are constitutionally recognized. In some ventures, the respective governments have incentives and additional support that would help the voluntary entrepreneurs minimize the expenses associated with their work. This is in line with governmental and economic provision and distribution of public goods (Nicholls, 2006). This however should not erase the fact that there is a certain limit to accessibility of government funds for such initiatives. The regulators would like to fully run governmental projects and programs and therefore it makes sense in giving secondary priority to private enterprises where public projects exist. This forms another challenge to social entrepreneurship. Social enterprise empowers stakeholders through defining and voicing their business operations.
The growing global acknowledgement of social entrepreneurship is at its most critical stage especially through the fact people are embracing it despite the majority not having a clear understanding of how it works. Most people cannot define the difference between business and social entrepreneurship and some who basically begin on this mission end up being overcome by either the greed for money/profits or existing tough economic situations (Nicholls, 2006). Without proper guidance on how to stay focused on social capital creation, individuals/ organizations can easily shift to profit making under the disguise of generating funds to support social activities. Proponents and advocates for development of social capital are faced with the challenge of ensuring social capital developers survive this temptation and maintain the noble act for a positive and long term impact. Success in this mission calls for establishment of a powerful base for practice, information and understanding that would strengthen an environment that sustains and guides voluntary practitioners (Praszkier & Nowak, 2011).
The global hype and excitement is fueled through the ambiguity surrounding the activities and projects by nonprofit making organizations which generate income. Many business entrepreneurs are seeking alliances with nongovernmental and nonprofit making organizations to seek an increase in financial status and worth. This is normally achieved through the publicity that comes with the noble activities of the nonprofit generating organization which is an excellent marketing strategy (Praszkier & Nowak, 2011). The other important aspect is the financial gains from the subcontracted activities in form of tenders for service or products provision. Some businesses are learning the ways of operation in nonprofit making organization and absorbing them into their profit generation strategies. This to some extent creates confusion and makes the distinction between the policies and non policies of the nonprofit making organization difficult o interpret (Nicholls, 2006). Once the internal perception is confused, then the society cannot in anyway enjoy the good intentions without subjectively analyzing and debating on the outcomes. This therefore beats the purpose and if not properly regulated, it might tarnish the global image of voluntary social capital creation. Most of the business entrepreneurs who will incur losses in the process may grow bitter and blame the idea of social entrepreneurship on their personal failure due to misconceptions about this phenomenon. One is therefore not left to guess about where the resistance and sabotage in social initiatives aimed at generating social capital arise.
The challenges facing social entrepreneurship have led to establishment of organizations which aim at educating the society at large on philanthropy. Further guidance and support is offered to individuals who intend to follow this path so as to ensure a successful outcome that is both satisfactory to the individual and the general society around them (Perrini, 2006). The organizations are based on specific interests that stem from a common background and a good example is the Association for Research on Nonprofit Organization and Voluntary Action (ARNOVA).
Case Study- ARNOVA
Entrepreneurs in their daily activities of businesses targeting profits often participate in charity events thus expecting a loss. If their intentions are not mainly social, the activities cannot qualify them to be social enterprises. To clearly define this phenomenon we can say that the aim should be to take part in charity work through running a business and not doing charity while engaging in one’s business (Lindahl, 2010). This can however be slackened to include any organization which dedicates most of its gains to charity work or one that participates more in charity giving than it is stipulated or allowed by its the original policies and principles. Such is the Association for Research on Nonprofit Organization and Voluntary Action (ARNOVA). This entails voluntary grouping and assembly of scholars based on their actions that was established in 1971 (Lindahl, 2010). Its activities and ventures are aimed at objectively strengthening the act of philanthropy. It is an unbiased and free to join forum that is dedicated to empower research in creation of social capital to individuals and other organization with mutual interests. ARNOVA merges theories and practices in studies of interest which assists scholars develop an in-depth understanding of the daily activities in charity oriented organizations (ARNOVA Web). At the same time, they make available guidelines based on research to professionals in the nonprofit making field which they can apply in enhancing the quality of the lives of individuals and the society at large. Their main activities include:
- Annual conference- this provides stakeholders with an opportunity of reviewing performance of objectives set during the previous conferences and other symposia held. However, the most important aspect is evaluation of emerging trends in development of social capital. This is done to ensure that future policies are established and are consistent with the evaluated or forecasted happenings and developments in the individuals and societal lives.
- Publications- This are written documents which are meant to update stakeholders and interested parties on various issues and emerging trends so as to make every effort and thought in line with creation of global social capital synchronize without misunderstandings and misconception.
- Electronic discussions are a much more convenient way of sharing ideas and documentations in real time. This serves the same purpose as publications only that they are more specific and are efficient in addressing both short term and long term issues of interest.
- Special interest groups are unions of fewer members of ARNOVA which have a certain focus on isolated or specific tasks that are of major influence on the overall organization’s goal. This tends to customize the needs and interests of both researchers and general parties of interest from the public.
ARNOVA in its quests to achieve a higher level of human capital has specifically set up the Social Entrepreneurship/Enterprise Section (SEES). According to the ARNOVA website, the mission is to provide a forum for interaction among stakeholders especially scholars who envision development and enhancement of research, discussions and general conceptualization of the intended projects geared towards social entrepreneurship. The specific objectives are:
- Identify and interpret the variations and similarities in how SEES policies are defined and applied in different environments, situations and times. This is in a bid to provide a standard or common approach and analysis of challenging situations.
- Facilitate discussions within the member body on changing trends and how they affect variations in policies, their application and general theory of change in the target environment.In order to highlight SEE or its main attributes, constantly come up with and examine theories that address the SEE phenomenon. Further application is in the use of segments within existing theories in disciplines related to social entrepreneurship.Encourage global evaluation and practice of the SEE field and assemble scholars and practitioners for common interactions within the field.
The benefits of the SEES project to the organization and the members are replicated globally on issues related to Social Capital creation. Some of the direct benefits to members which reflect greatly in their individual and private pursuits away from ARNOVA are:
- Networking- various members have been able to interact with likeminded individuals and run their private ventures in a more efficient manner and based on the global attraction, provided services or products with world class touch. This means that their ventures have now entirely grown in terms of global perspective as opposed to restricted zones of operation. Through sharing, the member practices and ideas have been transferred to various parts of the world.
- Discounts have been enjoyed by members in conferences and correspondence with updates have been free of charge thus members have been able to gain fresh and current knowledge almost freely.
- Various discounts on advertisement and exhibitions at major ARNOVA conferences and symposia which boosts the members financial balances as they seek to further their social enterprises in performance and delivery.
The organization has been able to generate income from membership, advertisements, exhibition and events registration fees that has made it possible to meet and sustain its financial obligations and therefore continued support of the SEES projects and objectives. This is a major step in supporting the financial independence aspect which makes it possible for ARNOVA as well as other social enterprises break of the temptations of being biased in their activities that result from reciprocating the actions of private sponsors and the government.
The relevance of Social Entrepreneurship has seen it regarded as an important aspect in the formal business sector. Gradual acceptance of public relations and social responsibilities by both governmental and private organizations is a positive trend in the world. This is well defined through infiltration of the phenomenon into educational circles and major universities worldwide have established curriculum to educate and encourage research in theories and practices that should boost and encourage informed application of the same in ventures intended to be of Social entrepreneurial nature. The Duke University through its Center for the Advancement of Social Entrepreneurship (CASE) in the year 2006, embarked on a 2 year program intended to analyse important questions aimed at developing capacity in social entrepreneurship. This was done in conjunction with the Skroll Foundation (London & Morfopoulos, 2009).
Just as the excitement around social entrepreneurship has grown and its development is studied keenly by both the social and business entrepreneurs, there is a growing concern about how business entrepreneurs are taking every advantage in this field to further their profit gaining intentions. The future of social enterprises now relies on reciprocating the act by picking best policies and strategies from the business world to achieve the social goals. The major setback lies with the difficult act of convincing many philanthropists/ social entrepreneurs on adapting common business practices like maintaining proper books of account and running every activity with constant evaluation of outcomes. There has always been a more casual approach as far as social entrepreneurship is concerned as compared to business entrepreneurship. Perhaps this stems from knowledge that failure to attain set targets cannot necessarily cause a collapse of the business as the same situation in business entrepreneurship (London & Morfopoulos, 2009). The outcomes should be evaluated frequently and measured for success so as to promote the growth and valuation of the social enterprise.