Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
Lecture Notes
Chapter 4: Supporting Social Entrepreneurship
Learning Objectives
• Describe what social entrepreneurship is and the role it plays.
• 2. Explain how social entrepreneurship can help resolve wicked problems around the
world.
• 3. Identify the different types of social entrepreneurship.
Notable Quote
• “The life purpose of the true social entrepreneur is to change the world.”
• -Bill Drayton, founder of Ashoka
The Role of Social Entrepreneurship
• “The life purpose of the true social entrepreneur is to change the world.”
Traditional and Social Entrepreneur Similarities
• Found new organization
• Find information and resources
• Form connections
• Create marketing initiative
• Promote offerings
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
Notes:
What’s the difference between social entrepreneurs and traditional entrepreneurs? Social
entrepreneurs and business entrepreneurs share some similarities: both types found new
organizations, identify opportunities, create and implement innovation solutions or services,
find information and resources, form connections, and create marketing initiatives to promote
offerings.
Differences in Traditional and Social Entrepreneur
• Traditional
• Create ventures with a goal of making a profit.
• Measure performance by profits.
Examples of Wicked World Problems
• Environment
• Poverty
• Sustainability
Conklin’s Characteristics of Wicked Problems
• The problem is not understood until after the formulation of a solution.
• 2. Wicked problems have no stopping rule.
• 3. Solutions to wicked problems are not right or wrong.
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
• 4. Every wicked problem is essentially novel and unique.
Example of Social Entrepreneurship Solving Wicked Problems
• Kickstart—Hunger in Africa
• Dr. G. Venkataswamy—Eradicate avoidable blindness in India
Typology of Ventures
Notes:
The aim of social purpose ventures is to resolve a social problem and make a profit. Organic
clothing company PACT is a good example of a social venture: it designs, manufactures and
distributes premium cotton underwear, without using pesticides, fertilizers or chemicals. As a
participant in the Fair Trade movement, PACT uses family farms in India and pays a higher price
on the cotton to help sustain the farms and the local communities.
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
Jeff Denby, founder of PACT, says, “By focusing on the people who make our products,
from the farmers who grow the organic cotton to the workers who stitch the garments, PACT is
Social Purpose Ventures
• Resolve a social problem
• Make a profit
Notes:
Social consequence entrepreneurship describes a for-profit venture whose primary market
impact is social. A good example of a for-profit venture with a social impact is Sword and
Plough, a startup founded by sisters Emily and Betsy Nunez and named after the biblical quote
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
Social Consequence Entrepreneurship
• Make a social impact
• Make a profit
Critical Thinking Questions
• Should entrepreneurs exist to make money? Solve social problems? Or both? Explain
your answer.
• What entrepreneurial ideas do you have that would benefit society?
Notes:
Enterprising Nonprofits
• Venture mission and market impact are for social purposes
Facts on Nonprofits in the U.S.
• 1,548,644 tax-exempt organizations
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
• 1,076,208 public charities
• 103,356 private foundations
• 369,080 other types of nonprofit organizations, including chambers of commerce,
Facts on Traditional Nonprofit Entrepreneurs
• 50% survival rate of business for first five years
• 41% women/ 59% men
Facts on Enterprising Nonprofit Entrepreneurs
• 84% survival rate of business for first five years
• 60% women/ 40% men
• Average age: 53
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
There is also the question whether distributing free goods fosters dependency. For
example, in 2012, Bruce Wydick, economics professor at the University of San Francisco, and
two colleagues studied the effect of the Toms Shoes giveaways in El Salvador. Their research
Mycoskie has since listened to critics and has created employment for people in Haiti by
hiring local artisans to paint limited classics. It has also created partnerships with the Clinton
Foundation and the Wildlife Conservation Society to produce shoes and donate the profits
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
Example of Unintended Consequences of Social Entrepreneurism
• Toms Shoes
• “Buy One Give One”
Capital Markets for Social Entrepreneurs
• Social Venture Capitalists
• “Community” funds
• Microfinance
Critical Thinking Questions
• To what extent do good intentions make an entrepreneurial venture ethical? Do you
agree that the Buy One Give One business model may have unintended consequences?
Social Entrepreneurs and Stakeholders
• Employees
• Volunteers
• Investors
• Customers
Notes:
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
Building relationships with key stakeholders is an important way to gain support, but you must
Stakeholder Map
Notes:
In the 1990s, Ronald K. Mitchell and colleagues proposed a model of seven different types of
stakeholders (see Figure 4.6). The model is based on the three factors of power, legitimacy, and
urgency; note that each type of stakeholder occupies a position relative to these three
overlapping circles. Let’s examine each of these seven types using the example of nonprofit
Types of Stakeholders
• See Figure 4.6: Mitchell Stakeholder Typology
Notes:
Remember that stakeholders are not static – they can evolve, and through that evolution, they
may either gain or lose attributes. Social entrepreneurs must continuously monitor the internal
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
Types of Stakeholders
• Dormant
• Discretionary
• Demanding
• Definitive
Notes:
Corporate social responsibility (CSR) describes the efforts taken by corporations to address the
company’s effects on environmental and social wellbeing in order to promote positive change.
While social entrepreneurship may sound similar to the corporate social responsibility (CSR)
Social Entrepreneurship vs. Corporate Social Responsibility
Notes:
Social entrepreneurs are working all over the world to include people on the margins of society
to give those new opportunities and hope. For example, in Mexico, 50% of the prison
population released from prison end up incarcerated again.
In an effort to fix this problem, social entrepreneur Saskia Nino de Rivera founded
nonprofit organization Reinserta un Mexicano to change the Mexican penitentiary system by
working with mothers of children born in prison. Over 130 babies are born in Mexico City’s
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
Social Inclusion and Social Entrepreneurship
• Confronts inequity that creates marginalization
• Creates similar opportunity
• Breaks down social issues
• Encourages hope
Notes:
Critical Thinking Question
• To what extent do you feel you are already “other–centered” in your life? Give some