A lot has been written about Social Entrepreneurship as a new form of organization that uses market based methods to address some urging social needs (Vanderbilt). Some authors have even researched the ethical dilemmas Social Entrepreneurs face to balance this supposedly conflicting goals (Journal of Business Venturing). To me this is a non-issue. Why is it that we tend to see Social Value and Profit as two opposing concepts?
I know I am not alone, a growing number of Social Entrepreneurs are finding these seemingly opposing goals to be their driving force to create more social good. The social ventures they create are challenging this fallacy day in and day out.
In fact they are creating social ventures that do not care at all of measuring the triple bottom line. For them profits are a requirement in order to be self-sustainable, therefore they keep track of their financial records only to be able to continue to deliver social value. Actually their ventures are purpose driven: they aim to create social value which translates into addressing some seemingly intractable social issues, but they do not stop there the push the envelope and aim to instil transformational change to current social institutions (Kingston University).
To do so they use market based method like innovative business models. The create their unique Social Value Proposition and assume that if something has value there is no reason why society would not pay for such benefits a price that enables sustainability.
One of the main differences will be that Social Ventures will not accrue benefits to the owners or funders but to society instead. The goal is not to make money but to make social good, yet the social entrepreneurs behind this ventures don’t see money as evil but as a mean to achieve their goal which is creating social value. This of course does not inhibit the people who provide the funding to be remunerated for the capital provided, but to the social venture this is just another operating cost not a goal to be optimized, what they seek to optimize is the social value they create. In this sense the spread of social entrepreneurship has given birth to the growing impact investing industry which is at the same time supporting and hindering the crystallization of this vision, nevertheless I remain confident a new paradigm is emerging, I think social entrepreneurs still aim to change the system so they will not rest until they succeed in making impact investing an institution of the new society instead of letting current banking institutions overtake the social venture market place. The current landscape is plenty of mixed and blended examples but some business schools (ESSEC) are inadvertently helping separate the wheat from the chaff. Time will tell us what will prevail.
Lastly I haven’t really expanded on the third bottom line, but I can only say that being environmentally aware and practicing best in class resource and energy consumption or waste management is not a goal but an operating principle which cannot be dissociated from the core mission creating social value. Damaging the environment is destroying social value therefore we are once again creating an oxymoron if we think of this as an independent goal.
As a concluding thought I would say that Social Entrepreneurship is transforming the business landscape, it is playing with current models and innovating to get rid of what is not serving the social good to create new sustainable business models (including its own financial systems). There challenge will be to create a new currency that everyone trusts (Yuval Harari).
Mauro Locarnini
