Social Entrepreneurship: What Everyone Needs to Know; Social Entrepreneurship For Dummies

The term social entrepreneurship (or SE) began to find its way into the lexicon in the 1980s, thanks to the efforts of Bill Drayton, the founder of Ashoka, and a number of leaders in corporate and academic life who advocated for the systematic application of entrepreneurial practices to social ills and problems. Ashoka fellowships, first awarded in 1981, and similar support and recognition elsewhere allowed individuals with innovative strategies for treating these problems to begin to make a mark. Eventually Muhammad Yunus, an early Ashoka fellow, and others started organizations to address specific social problems with strategies and techniques borrowed from business. Against a backdrop of government failure to address many of the same problems that social entrepreneurs were tackling, SE began to look to many people like a silver bullet. Additional funding and publicity followed, and in a short time a vast institutional structure had been developed, allowing SE to become well entrenched in the world of nonprofits, the academy, and elsewhere.

But while SE has become a powerful movement, its proponents are eager to spread its message further so that it becomes an even greater force for social change. If and when this happens, they say, we stand a fighting chance of overcoming the many social ills that beset us.

Something along these lines is described at the outset of David Bornstein's and Susan Davis' Social Entrepreneurship: What Everyone Needs to Know. Bornstein, author of the acclaimed How to Change the World, and Davis, founding president and CEO of BRAC USA, divide the history of SE into three stages: SE "1.0," which was all about the task of identifying, publicizing, and funding social entrepreneurs and their ideas; SE "2.0," which involved the development of organizational and infrastructural competency so that social enterprises could become fully viable and attractive to those in the for-profit world; and SE "3.0," the current environment, in which the activities of social entrepreneurs have become so extensive and the SE mindset so pervasive that growing numbers of us, given interest and means, are looking for ways to harness entrepreneurialism in the service of change. Indeed, one of the authors' goals is to describe what social entrepreneurs are like and what they have accomplished, in an effort to stir readers to action. In contrast, Mark Durieux's and Robert Stebbins' excellent Social Entrepreneurship For Dummies confines itself to organizational basics as well as the skills and knowledge needed to enter the field.

Despite its Oxford University Press imprimatur, Social Entrepreneurship is a work of popularization: brief, chatty, and chock-full of examples and references to other works, its tour of the SE universe consists of three chapters bracketed by a short introduction and a concluding list of one-sentence "Thoughts for Changemakers." Chapter one, "Defining Social Entrepreneurship," attempts less a definition of SE (indeed, the authors express comfort with the idea that there isn't a widely accepted one) than a précis of what social entrepreneurs do, comparing and contrasting them with political activists and business and government actors, and offering a concise history of SE's emergence as a global movement. Chapter two examines some of the critical challenges and constraints faced by social entrepreneurs — from raising funds and recruiting and retaining personnel, to measuring impact and overcoming the problems caused by hyper-specialization. And chapter three looks at how SE could become even more important, with significant influence in domains such as business and philanthropy; the problems that often arise when social entrepreneurs work alongside government; and the steps that interested individuals can take to get involved.

Bornstein/Davis are at their best when they write about the possibilities for new ideas in the field, the generation of new data relevant to "outside the box" solutions, and the systematic social progress that could be realized through a large-scale commitment to SE. They are less successful at the level of analysis, where a number of shortcomings diminish the book's usefulness (see below). Overall, though, they succeed in packing a lot of information and ideas into a small, well-organized volume, and the obvious passion they bring to the material surely will pique the interest of readers hoping to learn more about the field.

 

For those so persuaded, Social Entrepreneurship For Dummies would be a good next item to pull off the shelf. A worthy addition to the deservedly famous series, the book shares the "user-friendly" style and graphic devices of its brethren. Potential readers shouldn't be fooled by appearances, however: in fact, SE for Dummies offers a degree of depth beyond that of the typical introductory text.

Durieux/Stebbins begin with a wide-ranging description of the field that includes discussions of compassion, social distance, and what motivates people to help others. The authors then turn to the main event: a three-part "how-to" guide (establishing, building, and sustaining) for creating a viable socially-focused enterprise. Each part is broken down into a series of concise tutorials on the basic skills involved. The authors include examples, charts, warnings, and helpful hints designed to illuminate the finer points of things like mission statements, incorporation, media management, leadership styles, and bureaucracy, all the while keeping the reader on a clearly defined track. The book concludes with two lists, one of areas the authors believe are most in need of social entrepreneurial energy, and the other outlining the common mistakes that potential social entrepreneurs should do their best to avoid.

As a primer dedicated to small businesses with a social purpose, SE for Dummies is clear, concise, and thorough. Durieux/Stebbins present a large amount of material in a way that is manageable, and they are especially good at getting across where the crucial decision points lie. The book can even be of use to those not looking for hands-on help. While largely a high-altitude survey of the SE landscape — anyone relying on it as a main source of information will at some point need to turn elsewhere for supplementary material — it skillfully addresses a number of underlying social and ethical issues that arise when considering SE.

In general both writing teams present SE in remarkably optimistic terms and display no doubt that society should celebrate and do its utmost to support the field. They may be right, but readers who have not drunk deeply of the Kool-Aid might be more inclined to agree if both books, strengths notwithstanding, had done a better job of explaining the nature and worth of SE. Here, for example, are a few questions I had as I was reading.

Are all the instances of laudable behavior mentioned really examples of SE in action, or are they just examples of good old-fashioned humanitarianism, philanthropy, and/or activism? The account offered by Bornstein/Davis paints a picture of SE that is so inclusive, distinguishing between social entrepreneurs and other actors in the social change arena is tough. For example, the authors explicitly endorse the idea that figures such as Gandhi and Florence Nightingale were social entrepreneurs. Durieux/Stebbins go a step further by suggesting there's no reason not to include entities such as Operation Rescue in the ambit of SE. In the absence of even provisional definitional lines, how can SE ever become a unified and cohesive movement for change?

A similar issue arises when we try to distinguish social from business entrepreneurs. Bornstein/Davis state that the former seek to "maximize" the social benefit of their enterprises — a test that many, if not most, social enterprises would fail. Durieux/Stebbins posit a far weaker claim, stating that the social entrepreneur is one for whom the "bottom line" is not confined to profit and loss but includes the social and environmental benefits generated by the enterprise. At the same time, they acknowledge that some people dismiss this "triple bottom line" approach as unrealistic. Profit as traditionally understood is clearly distinct from social or environmental benefit and, indeed, often is a competing rather than a complementary aim. So an expanded bottom line makes sense only on the condition that "profit" encompass not just the "money left over after expenses have been covered" but other, less tangible things as well. Without such a re-conceptualization, profit will remain in competition with less tangible benefits, in which case the issue becomes which of these bottom-line elements takes precedence and in what context. Is a social entrepreneur someone who always privileges social or environmental benefit over profit, or someone who only does so on occasion? And can one be a social entrepreneur if she favors profit over social/environmental benefit but manages to generate a significant amount of the latter? (This is hardly an academic exercise, as the recent troubles in the South Asian microfinance industry make clear.)

Both works praise the utility of the traditional entrepreneurial emphasis on hardheaded business considerations such as accountability to investors, efficiency, weeding out poor performers, etc. At the same time, they credit SE with a fundamental and overriding concern for the grassroots, the local, and the empowerment of those to be helped. But why should we believe there's any real link between these, especially since the latter set of concerns has in the past been rather removed from entrepreneurial interests? Durieux/Stebbins, as part of their suggestion that the best way to define SE is to describe its characteristic "mindset," simply include such concerns within their description. While this solves the problem of linkage, it does so at the cost of plausibility, since it isn't obvious why they are specifically "entrepreneurial" in nature rather than, say, an expression of commitment to democracy or a rejection of what some have called "philanthropic colonialism."

Concerns like these could have been addressed by paying more attention to two key, interconnected concepts largely missing in both books: social justice and legitimacy. Consider, for example, the concluding list of suggestions for fledgling social entrepreneurs offered by Bornstein/Davis. First on the list is "Begin with an end in mind." Nowhere, however, is critical scrutiny of this end recommended. But unless an end is subjected to (and survives) such scrutiny, it is hard to see its appeal to anyone other than those already convinced. In addition, the authors repeatedly state that social entrepreneurs should collaborate with or pick up activities currently performed by government. This seems practical, however, only to the extent that SE acquires a measure of legitimacy typically accorded democratically elected governments. Working to achieve social justice in a particular domain might be a way to secure such legitimacy, but neither book really pursues the idea.

Moreover, while the failure of government to come up with solutions to the serious problems with which SE typically is concerned is enough to make any reasonable person cast about for alternatives, partisans of SE still need to explain why the collective energies and resources of society are better directed by social entrepreneurs than by their elected officials. Again, neither book addresses this tension, even though both are well aware of the disparity between the amount of money private philanthropy spends on social benefits and the amount available to the public sector. (The war in Afghanistan costs the U.S. government upwards of $100 billion/year; the Gates Foundation, the largest foundation in the United States by a factor of ten, gave away $3.5 billion in 2009.)

If both books seem overconfident about SE's capacity to address all manner of social ills at times, the reader will understand. The problems of the world are great, and the ability of government and the private sector alone to solve them are limited. That said, it would be useful for those currently engaged in or attracted to SE to look more closely at the achievements and successes of their predecessors, with an eye to figuring out who and/or what was responsible for those successes. Indeed, only through such rigorous analysis will the field develop a better understanding of the kinds of problems SE is particularly well suited to address, as well those it should leave to others. And that is in everyone's best interest.

Paul Spohr
Executive Assistant to the President
Foundation Center
New York, New York