Ten years ago, as the excitement about social
entrepreneurship began to take off, I decided to do a little field work. I
compared the syllabi at major research universities where both classes on
nonprofit management and social entrepreneurship were taught and looked for
differences and similarities between the two. There turned out to be a lot of
overlap, from defining mission and establishing a defensible competitive
position, to marketing and stakeholder management, and encompassing such things
as building boards and measuring performance. In other words the differences
between the conceptualization of the two fields were small, at least in terms
of what was being taught to students. It was easy thus to dismiss the whole
social entrepreneurship movement as a fad grounded largely in a few clever new
terms and phrases that simply obscured ideas rooted in the old and familiar
field of nonprofit management. This early judgment proved false.
Over time, the concept of social entrepreneurship grew,
became more distinctive, and spawned a vast new literature, teaching programs
and degrees. Harvard anchored its work in the concept of ‘social enterprise,’
Stanford opted for ‘social innovation,’ Wharton branded around ‘social impact’,
and Duke latched on to ‘social entrepreneurship.’ Whatever they call it, these
programs, centers, and initiatives have grown stronger and more defined. It is
useful to think of these related concepts as part of a continuum. Social
entrepreneurs are the actors who do the work, social enterprises are the
organizational forms that are used, social innovation is the theory of change
that guides the process, and social impact is the end result that is achieved.
But what is social entrepreneurship really and how is it
different from nonprofit management? I have concluded through my own teaching
and research that the essence of the special identity of social
entrepreneurship lies in three necessary elements.
For something to be a manifestation of social
entrepreneurship, it must first involve a new and innovative way of solving a
public problem. Innovation is at the core of the work of a social entrepreneur
who looks at the world, identifies a problem, and then advances a new solution.
Social entrepreneurship cannot simply involve dutiful replication or adaptation
of models already in use and accepted as mainstream practice. It must represent
a new combination of ideas and initiatives that promise to address a pressing
problem by bringing something new to the table, be it fresh technology, a new
theory of change, or an insight transferred from an allied field.
The second element of social entrepreneurship requires that
any solution be designed from the outset to be part of a financially and
organizationally sustainable model. Social entrepreneurs do not write concept
papers and endless foundation proposals, and then sit around waiting for
someone to authorize them to act. Instead, they design their enterprises so
that are capable of running on their own engine and surviving in a turbulent
sea. Whether it be through a stream of related or unrelated earned income or
built on volunteer labor, social entrepreneurs are designing and building
organizations that are financially and institutionally viable from the start
and over the long haul. They take
seriously the challenge of ensuring that the organizational design and
financial model are not second thoughts, but part of the core calculus of
pursuing lasting social change.
The third and last essential element of social
entrepreneurship is scale. Social change may start locally, but ambitious
social entrepreneurs think through and know how their ideas and programs can
spread broadly. They design their operations in a way that they can be grown or
replicated so as to reach more and more people.
This focus on scale differentiates the social entrepreneur because they
know that the scale of complex and enduring problems is such that no
small-scale solution is enough. The essence of change requires a commitment of
scale.
Innovation, sustainability and scalability can be achieved
using both nonprofit and for-profit organizational forms. In fact, social
entrepreneurs are agnostic on sector and view it as a contingent decision that
is dependent on the problem that is being addressed and the best auspice for
supporting innovation, financial sustainability and scale. In some cases,
nonprofit forms may be best, while in other contexts for-profit forms may be
most appropriate. No matter the sector, social entrepreneurship demands a
value-seeking imagination, a high degree of comfort with risk and uncertainty,
and a willingness of adapt and iterate over time.
Social entrepreneurs and nonprofit managers
start with very different assumptions and work through different means, albeit
in the same general direction of social impact. At Penn School of Social Policy
and Practice, we teach both social entrepreneurship and nonprofit management,
and on top of that we add the third paradigm of nonprofit leadership. The field
of practice that Penn seeks to shape is, I believe, rendered richer by virtue
of the open battle of ideas between these fields, the way they complement and
challenge one another, and the special skills and tools that all three fields
contribute to the challenge of creating social impact.
