Social entrepreneurship

A comprehensive guide introducing social entrepreneurship and guiding your first steps in this area.

Social entrepreneurship is a dynamic process that incorporates a viable business model with a sound social mission. It generally focuses more on adding social value than economic value.

This statement provides a guide on starting or developing as a social entrepreneur. It also provides a unique insight into this recent phenomenon which is capturing the interest and talents of a new generation of MBA students, both in Europe and in North America, as well as in emerging economies such as India.

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Social entrepreneurship

1. An introduction to Social Entrepreneurship

2. Links to selected organisations operating in this field

3. A guide to starting your own social enterprise

4. Careers in this area

5. Additional resources on a Career in social enterprise

6. Bibliography on the subject

7. Other articles of interest

1. AN INTRODUCTION TO SOCIAL ENTREPRENEURSHIP A social entrepreneur identifies and solves social problems on a large scale. Just as business entrepreneurs create and transform whole industries, social entrepreneurs act as the change agents for society, seizing opportunities others miss in order to improve systems, invent and disseminate new approaches and advance sustainable solutions that create social value. Unlike traditional business entrepreneurs, social entrepreneurs primarily seek to generate “social value” rather than just profits. The job of a social entrepreneur is to recognize when a part of society is stuck and to provide new ways to get it unstuck. He or she finds what is not working and solves the problem by changing the system, spreading the solution and persuading entire societies to take new leaps. 2. LINKS TO SELECTED RELEVANT ORGANISATIONS ebbf has selected for you a few of the most credible and active organisations where you will be able to deepen your research into this topic.

• School for Social Entrepreneurship

• Harvard Social Enterprise Program

• Skoll Center for Social Entrepreneurship at Oxford Business School

• Social Enterprise Coalition

• Stanford Business School – Social Innovation

• Columbia Business School – Social Enterprise

• Ashoka

• Schwab Foundation for Social Entrepreneurship

• The Hub

3. START A NON PROFIT OR SOCIAL ENTERPRISE We have also selected for you a useful practical guide containing resources on how to start your own Social enterprise, with suggestions and ideas including the all important section for grants and financial assistance.

• HBS Business Plan Contest, Social Enterprise Track Harvard Business School A venue for HBS students interested in developing plans for social-purpose ventures.

• How to Form a Nonprofit Corporation Anthony Mancuso – Nolo Press, 2002 Step-by-step instructions on forming a nonprofit corporation. Focus is on legal and tax considerations.

• Social Entrepreneurship and Commercial Entrepreneurship: Same, Different, or Both? Harvard Business School, 2003 – James Austin, Howard Stevenson, Jane Wei-Skillern Working Paper

• Starting Your Business Small Business Administration Start-up basics, including planning, finance, marketing, and legal.

• Venture Capital-Associations and Organizations Harvard Business School Resources to identify funding and investment sources.

BOOKS AND ARTICLES ON STARTING A SOCIAL ENTERPRISE

• Sources of Financing for New Nonprofit Ventures (Harvard Business School case #9-391-097)

• John Simon, “The Tax Treatment of Nonprofit Organizations: A Review of Federal and State Policies,” The Nonprofit Sector: A Research Handbook, edited by Walter W. Powell (New Haven: Yale University Press, 1987).

• Starting and Running a Nonprofit Organization, by Joan M. Hummel. A “how to” on starting-up a nonprofit.

• Financial Management for Nonprofits: The Complete Guide to Maximizing Resources and Managing Assets, by Joel G. Siegel and Jae K. Shim. A practical guide for financial managers in a variety of nonprofit organizations.

• The Law of Tax-Exempt Organizations (7th edition), by Bruce R. Hopkins.

• How to Form a Nonprofit Corporation (4th Ed), by Anthony Mancuso. From Nolo Press.

• The Complete Guide to Nonprofit Corporations/Step-By-Step Guidelines, Procedures and Forms to Maintain a Nonprofit Corporation, by Ted Nicholas. Keeping your nonprofit “legal.”

• Street smart Financial Basics for Nonprofit Managers/Book and Disk, by Thomas A. McLaughlin. Financial management for nonprofits.

SITES FOR ADDITIONAL RESOURCES AND IDEAS

• Internet Nonprofit Center (INC)

• Nonprofit Resource Center

• Changemakers

• Blended Value Map

• Boston Community Capital

• Calvert Social Venture Capital

• Commons Capital

• Columbia University’s RISE Directory

• Investors’ Circle

• Roberts Enterprise Development Fund

• Ashoka: Innovators for the Public

• BoardSource (formerly The National Center for Nonprofit Boards)

• Brody, Weiser, Burns

• Community Development Venture Capital Alliance

FOUNDATIONS AND GRANTS

• Annual Register of Grant Support:

• A Directory of Funding SourcesBowker, published annually Ref. AS 911 .A2 A67

• Organizations ranging from the humanities to technology and industry. Includes contact information, areas of interest, type of funding, geographic restrictions, eligibility, amount of award, number of applicants and awards given.

• Council on Foundations

• Association of grantmaking foundations and corporations. Web site features the history of foundations, information for potential donors, and links to foundations.

• The Foundation Center

• Organization that collects, organizes, and publishes information on U.S. philanthropy. Provides education, training, and a variety of helpful resources on their Web site.

• The Foundation Directory

• Foundation Center, published annually Ref. AS 911 .A2 F65 Private and community grant-making foundations in the U.S. that meet financial criteria of at least $2 million in assets and $200,000 in annual giving. Includes management names, types of support, fields of interest, activities, publications, officers, trustees, and selected grant awards.

• Echoing green foundation

• Entrepreneurs Foundation

• Ewing Marion Kauffman Foundation

• Haas Social Venture Business Plan Competition

• Investors Circle

• Morino Institute

• National Gathering for Social Entrepreneurs

• Nonprofit Enterprise and Self-sustainability Team

• Northland Institute

• Social Venture Network

• Society for Nonprofit Organizations (Nonprofit World)

• The School for Social Entrepreneurs (London, England)

• W. K. Kellogg Foundation

4. IDEAS FOR A CAREER IN THIS AREA The following is a list of some of the organisations where you may be able to find your path in this area

• Idealist

• The Chronicle of Philanthropy job openings

• The Nonprofit career network

• Opportunity NOCs

• International Career Employment Center

• ExecSearches.com

• Interaction

• Several key resources which are useful to people seeking paid or volunteer positions — in the US and abroad — with international relief and development agencies

• America’s Promise jobs

• Charity Channel

• Council on Foundations

• Foundation Center

• Dot Org Jobs

• 5. More Social Enterprise business guides

• Here you will find additional books and resources guiding you in your career as a social enterpreneur.

5. MORE SOCIAL ENTERPRISE BUSINESS GUIDES Here you will find additional books and resources guiding you in your career as a social enterpreneur.

• Careers in Non-profits and Government Agencies WetFeet, published irregularlyCareer HD2769.2.U6 W466 Guide provides profiles and background information on the top companies and agencies, job opportunities, and information on the recruiting process.

• The Chronicle of Philanthropy Job ListingsIndustry trade journal. Includes many executive-level jobs, news, and advice.

• National Directory of Nonprofit Organizations The Taft Group, published annuallyLocate leads for positions at nonprofit organizations.

• The NonProfit Times Source for salary surveys, lists of top nonprofits, and special industry reports.

• Print journal available in library.

CREATING AN ENTREPRENEURIAL BUSINESS PLAN: (Information on a wide-range of entrepreneurial topics)

• Small Business Administration(Information on legal issues, business planning, software, and other resources.)Timmons, New Venture Creation: Entrepreneurship for the 21st century, 4th ed. Irwin, 1994Merrill, Raising Money: Venture funding and how to get it. AMA 1990Roberts, Entrepreneurs in High Technology: Lessons from MIT and Beyond, Oxford, 1991Venture Capital Journal, Entrepreneurship Theory and Practice, Red Herring, Upside (Periodical)See other resources on the Business Plan Contest web site Getting Started

• HBS EntrepreneursBaker LibraryHB615 .H339 2003A video collection of 27 HBS alumnae sharing their experiences and insights on entrepreneurial strategy, opportunities, and leadership.Also available online

• Small Business Profiles: A Guide to Today’s Top Opportunities for EntrepreneursGale Research, published annuallyRef. HD2346.U5 S65A two-volume set of general business and specific topic profiles, state listings, and federal assistance available for small companies based primarily in the U.S. and Canada.

• StartupJournalWall Street Journal published dailyFeatures articles by columnists advising how to start and run a business.

• U.S. Small Business AdministrationU.S. Small Business AdministrationAccess to government information and services on areas such as financial assistance, laws and regulations, taxes, international trade, and workplace issues.

• SBA Office of Advocacypublishes research studies on growth, financing, and management for Minorities in Business and Women in Business.

SETTING UP:

• See also the “Property Types” section of the Real Estate Guide for additional resources on commercial space, and the “Negotiate” section of the Careers Guide for hiring employees and forecasting salaries.

• Business.govU.S. Small Business AdministrationLegal and regulatory information for America’s small businesses.

• CCH Small Business GuideBusiness Owner’s ToolkitAdvice on the costs involved for office and equipment and the issues surrounding the people who work for you

• OfficeFinderUseful tools for calculating office or industrial space needs. Real estate services offered.

• Salary.comSalary Wizard tool calculates compensation ranges for a broad range of positions.

• Starting a Business and Keeping RecordsInternal Revenue ServiceRecommended reading from the IRS on taxes and accounting, there is also tax information for charities and nonprofits

• IRS Web siteprovides additional tax information for small businesses and the self-employed.

GROWING AND MANAGING YOUR COMPANY:

• Directory of Operating Small Business Investment CompaniesU.S. Small Business Administration, published annually – Ref. HG 3729 .U5 D56Arranged by state, gives contact information, preferred investment size, investment type, and geographic preference. Also available online

• http://www.sba.gov/gopher/Local-Information/Small-Business-Investment-Companies/EntreWorld – Kauffman FoundationSearchable database of articles, tools, events, and audio clips on entrepreneurship.

• Entrepreneur MagazineEntrepreneur Media, Inc. published monthlyAdvice, tools, and articles on how to grow and manage your business.

• Inc. MagazineUnited Marine Publications, published monthlyArticles and columns on many aspects and tasks for business management including the Internet, IT, taxation, regulation, and going global.Tip: Their Web site has helpful sections on funding, on growth strategies.

• Family Business ReviewABI/InformScholarly articles and case studies on the challenges and issues surrounding family-run businesses.

• The Three Components of Family GovernancePart three in a series of articles by HBS senior lecturer John Davis on the challenges of governing family-run businesses.Tip: See related articles Governing the Family-Run Business

• Organizing the Family-Run Business

HAVING AN EXIT STRATEGY:

• Closing a BusinessInternal Revenue ServiceCovers tax procedures involved with closing or selling a business.

• Getting Out of Your BusinessProvides options and practical advice on how to pass on to family, sell, or close.

• What’s Your Exit Strategy?Peter H. Engel, Prima Publications, 1999 – HD30.28 .E54 1999Explains how to have the right departure plan in place to protect both your business wealth and financial security.Corporate Social Responsibility

• Business & Human Rights Resource CentreMaterials published by companies, NGOs, governments, intergovernmental organizations, journalists, and academics. Reports of corporate misconduct, as well as positive examples of best practices.Tip: Partners with Harvard’s

• Francois-Xavier Bagnoud Center for Health and Human RightsNational Directory of Corporate GivingThe Foundation Center, 2003Detailed portraits of corporate foundations and direct giving programs. Includes application guidelines, key personnel, types of support awarded, giving limitations, and financial data.Tip: Search for corporate foundations on publisher’s Web site

• Nonprofit and Business Sector CollaborationEdited by Walter W. Wymer Jr. and Sridhar SamuExplores types of collaborations, social enterprises, cause-related marketing, sponsorships, and other corporate-nonprofit dealings.

MEASURING SUCCESS

• Managing and Measuring Social EnterprisesRob Paton – SAGE, 2003A range of performance measurements and improvement methods, including balanced scorecards, process benchmarking, and externally accredited standards.

• The New Nonprofit Almanac and Desk ReferenceMurray S. Weitzman – Jossey-Bass, 2002Facts and figures. Includes number of organizations in the sector, income, value of volunteers, number of people employed, wages/salaries, and employment trends. Analyzes current giving trends and the effect of tax laws.

• Innovation Network, Inc.This nonprofit organization offers evaluation consulting, training, Web-based tools, and outreach for other nonprofits.

• Measuring What Matters in NonprofitsMcKinsey & CompanySeveral pragmatic approaches to quantifying success. Free registration is required to read the full text.Tip: See more nonprofit articles from McKinsey Quarterly Academic Research & Publications

• Frontiers of Entrepreneurial ResearchBabson College Center for Entrepreneurial StudiesA browsable list of papers from the annual Conference on Entrepreneurship. The archives go back to 1981, full-text available from 1994.

• International Journal of Entrepreneurial Behaviour & ResearchMCB University Press, published monthly(Harvard users only)Covers the impact and contributions entrepreneurship and small businesses make in society and economics.

• Journal of Business VenturingElsevier, published bimonthly

• eJournalCovers international entrepreneurship, new business development, and innovation.

6. BIBLIOGRAPHY The following is a list of some of the most relevant publications on this subject. (Source: The Institute for Social Entrepreneurs) www.socialent.org/resources Alter, Sutia Kim. Managing the Double Bottom Line: A Business Planning Guide for Social Enterprises. Washington, D.C.: Save The Children, 2000 Andreasen, Alan R. “Profits for Nonprofits: Find a Corporate Partner. It Takes a Strategist to Survive a Marketing Alliance,” Harvard Business Review, November-December 1996, pp. 47-59 Austin, James E. The Collaboration Challenge: How Nonprofits and Businesses Succeed Through Strategic Alliances. San Francisco: Jossey-Bass Publishers, 2000 Barker, Joel Arthur. Paradigms: The Business of Discovering the Future. New York: HarperBusiness, A Division of HarperCollins Publishers, 1992 Billitteri, Thomas J. “Venturing a Bet on Giving,” The Chronicle of Philanthropy, June 1, 2000, pp. 1, 7-12 Blazek, Jody. “Unrelated Business Income ­ A Primer,” Board Member (published by the National Center for Nonprofit Boards), July/August 1999 Boschee, Jerr. “Eight basic principles for nonprofit entrepreneurs,” Nonprofit World, July-August 2001, pp. 15-18. Boschee, Jerr. “Entrepreneurial strategic planning and the organized abandonment process” (to be published in Nonprofit World magazine in 2003): Please click on both items Boschee, Jerr. Merging Mission and Money: A Board Member’s Guide to Social Entrepreneurship. Washington, D.C.: National Center for Nonprofit Boards, 1998 Boschee, Jerr. The Social Enterprise Sourcebook. Minneapolis: Northland Institute, 2001 Boschee, Jerr. “Social Entrepreneurship: Some Nonprofits are Not Only Thinking about the Unthinkable, They’re Doing It – Running a Profit,” Across the Board (Conference Board magazine), March 1995, pp. 20-25 Brown, Peter C. The Complete Guide to Money Making Ventures for Nonprofit Organizations. Washington, DC: Taft Publishing Group, 1986 Bygrave, William D. The Portable MBA in Entrepreneurship. New York: John Wiley & Sons, Inc., 1994 The Changemakers Review. Ashoka: Innovators for the Public, 1700 North Moore Street, Suite 2000, Arlington, VA 22209, 1-703-527-8300 Collins, James C., and Jerry I. Porras. Built to Last: Successful Habits of Visionary Companies. New York: HarperCollins Publishers, Inc., 1994 Community Wealth Ventures Incorporated. Venture Philanthropy 2001: The Changing Landscape. Washington, D.C.: Morino Institute, 2001 Davis, Lee, and Nicole Etchart. Profits for Nonprofits: An Assessment of the Challenges in NGO Self-Financing. Providencia, Santiago, Chile: Nonprofit Enterprise and Self-sustainability Team (NESsT), 1999 Dees, J. Gregory, Jed Emerson and Peter Economy. Enterprising Nonprofits: A Toolkit for Social Entrepreneurs. New York: John Wiley & Sons, Inc., 2001 Dees, J. Gregory. “Enterprising Non-Profits: What Do You Do When Traditional Sources of Funding Fall Short?” Harvard Business Review, January-February 1998, pp. 5-15. DuRand, John. The Affirmative Enterprise. St. Paul, MN: MDI Press, 1990 Emerson, Jed, and Fay Twersky. New Social Entrepreneurs: The Success, Challenge and Lessons of Non-profit Enterprise Creation. San Francisco: Roberts Foundation, Homeless Economic Development Fund, 1996 Firstenberg, Paul B. Managing for Profit in the Nonprofit World. New York: The Foundation Center, 1986 Hawken, Paul. Growing a Business. New York: Simon & Schuster, 1987 Inc., The Magazine for Growing Companies. P.O. Box 54129, Boulder, CO 80322-4129 Kotler, Philip and Alan R. Andreasen. Strategic Marketing for Nonprofit Organizations (Fifth Edition). New York: Prentice-Hall, Inc., 1995 Larson, Rolfe. Venture Forth! The Essential Guide to Starting a Moneymaking Business in Your Nonprofit Organization. St. Paul, Minnesota: Amherst H. Wilder Foundation, 2002 Letts, Christine W., William P. Ryan and Allen Grossman. “Virtuous Capital: What Foundations Can Learn from Venture Capitalists,” Harvard Business Review, March-April 1997, pp. 36-44 McKinsey & Company. Effective Capacity Building in Nonprofit Organizations. Reston, Virginia: Venture Philanthropy Partners, 2001 McLaughlin, Thomas A. Nonprofit Mergers and Alliances: A Strategic Planning Guide. New York: John Wiley & Sons, Inc., 1998 Nonprofit World, The National Nonprofit Leadership and Management Journal. The Society for Nonprofit Organizations, 5820 Canton Center Road, Suite 165, Canton, Michigan 48187, 1-800-424-7367 Reis, Thomas K. and Stephanie J. Clohesy. Unleashing New Resources and Entrepreneurship for the Common Good: A Scan, Synthesis and Scenario for Action. Battle Creek, Michigan: The W. K. Kellogg Foundation, 1999 Roberts Enterprise Development Fund. Social Return on Investment: SROI. Ryan, William P. “The New Landscape for Nonprofits,” Harvard Business Review, Jan-Feb 1999, pp. 127-136 Robinson, Andy. Selling Social Change (Without Selling Out). San Francisco: Jossey-Bass, 2002 Shore, Bill. Revolution of the Heart: A New Strategy for Creating Wealth and Meaningful Change. New York: Riverhead Books, published by The Berkeley Publishing Group, 1995 Shore, Bill. The Cathedral Within: Transforming Your Life by Giving Something Back. New York: Random House, 1999 Skloot, Edward (editor). The Nonprofit Entrepreneur: Creating Ventures to Earn Income. New York: The Foundation Center, 1988 Steckel, Dr. Richard, with Robin Simons and Peter Lengsfelder. Filthy Rich & Other Nonprofit Fantasies: Changing the Way Nonprofits Do Business in the ’90s. Berkeley, CA: Ten Speed Press, 1989 Steckel, Dr. Richard, Robin Simons, Jeffrey Simons and Norman Tanen. Making Money While Making a Difference: How to Profit with a Nonprofit Partner. Homewood, Illinois: High Tide Press, Inc., 1999 Stehle, Vince. “Putting Charities in Business,” The Chronicle of Philanthropy, October 3, 1996, pp. 1 et al Trout, Jack, and Al Reis. The 22 Immutable Laws of Marketing. New York: HarperCollins Publishers, Inc., 1993 Tuan, Melinda and Jed Emerson. “The Roberts Enterprise Development Fund: A Case Study on Venture Philanthropy,” Social Purpose Enterprises and Venture Philanthropy in the New Millennium, Volume II. San Francisco: Roberts Enterprise Development Fund, 1999 “A New Guard Emerges,” The Chronicle of Philanthropy, January 14, 1999, pp. 1 et al 7. OTHER ARTICLES AND DOCUMENTS Here you have access to a number of articles and documents produced by EBBF members and friends of EBBF. These are offered as supporting materials but views expressed in these papers are the authors’ own and do not necessarily reflect those of EBBF. A growing but relatively new segment of business which clearly puts purpose before profit is that of social entrepreneurship. A species in the genus “entrepreneur”, these enterprises combine two features: a social purpose and an entrepreneurial strategy. Usually the identification of a social need, opportunity and purpose precede the business plan and consideration for the potential economic value added for investors. These initiatives offer innovative approaches for dealing with complex social needs and often blur the traditional boundaries between the private, public and non-profit sectors in emphasizing hybrid models of for-profit and non-profit activities. In effect, we find a new generation of ‘social entrepreneurs’ driven by innovators using market-based approaches to solve social problems. In addition to innovative not-for-profit ventures, such as Centrica, which has developed a viable work-placement scheme for disadvantaged people, social entrepreneurs may create and run profit-making enterprises such as for-profit community development banks. Whatever the mixture of private, public and non-profit interests, such enterprises incorporate viable business models and a social purpose. Here is a wonderful example: GrameenPhone is a nation-wide cellular network in Bangledesh that provides telephone access to all, including the rural poor, by adding cellular telephony to village-based micro-enterprise organized by Grameen Bank. It is a consortium of Grameen Bank, Telenor, Marubeni Capital and Genofone. Social entrepreneurs are important sources of innovation and creativity. They identify new or unmet social needs and then find underutilized resources to meet these needs. They tend to be driven, ambitious leaders with great skills in networking and communicating the purpose and inspiring staffs, users and partners. Social entrepreneurship is capturing the hearts of a new generation of MBA students both in Europe and North America. Harvard Business School, the cradle of traditional practices in large companies, now has a distinct faculty for social enterprise and teaches a number of courses. Its Social Enterprise Club is the largest and most active on campus. The Global Social Venture Competition (GSVC) is a partnership of the University of California at Berkeley, Columbia Business School, London Business School and the Goldman Sacks Foundation. Its mission is to promote entrepreneurial businesses that have clear and quantifiable social objectives and are financially sustainable. This year, 225 MBA students from 55 business schools in 11 countries, submitted 129 proposals. McKinsey & Company has a network of over 1,400 alumni in 50 countries interested in social enterprise and development.