Social Entrepreneurship: What It Is and Why Everyone’s Talking About It

Social Entrepreneurship: What It Is and Why Everyone’s Talking About It

Entrepreneurs used to be those who had an idea, started a company, and made money. They wrote a business plan , circulated the document to a bank for capital, and worked tirelessly to scale their company and drive profits for themselves and their investors. But, now, we’re a startup nation. Actually, we’re a startup world. Entrepreneurs have different motivations for starting a business, just as consumers have different motivations to buy.

I’ve noticed a significant uptick and interest in companies that have a basic alignment in social responsibility, meaning the mission is not just to grow and make money, but to do good in the universe. Enter, social entrepreneurship. 

In this post, we’ll discuss social entrepreneurship, outline how it’s different from entrepreneurship, and give examples of businesses, organizations, and people that exemplify social entrepreneurship.

While socialpreneurs still practice the core entrepreneurial principle of starting a business, there are key differences between the two groups. 

Socialpreneur vs. Entrepreneur

The most significant difference between a socialpreneur and an entrepreneur is the end goal. The former is less interested in defining their successes through high profit margins, but instead by how their operations benefit communities of interest.

In addition, some social enterprises may not follow the typical organizational structure — they can be run entirely by volunteers who do not receive a paycheck or individual contributors that participate on their own accord. For example, mutual aid funds are community organized. These funds exist to meet a social need and began from an entrepreneurial idea, but are run by community members that participate as they please. 

While social entrepreneurship is typically a standalone venture, entrepreneurs can start for-profit businesses that fund programs to support social issues. Let’s go over some real-life examples of small business social entrepreneurship, as well as larger enterprise businesses that engage in social ventures. 

Small Business Socialpreneurship

Some businesses are founded for and dedicated to contributing to social good, and we’ll discuss some of them below. 

1. TranSanta

TranSanta is a unique social entrepreneurship venture that is community-led. It runs an Instagram account that features and highlights stories from transgender youth in need. These individuals create Target wish-lists of items that they need, and interested community members can anonymously purchase and send them what they need. 

2. Books to Prisoners  

Books to Prisoners is a traditional non-profit organization in Seattle, Washington, that aims to end the cycle of recidivism in the prison system. They accept book donations from community members and established bookstores that are then re-packaged and sent to incarcerated individuals. Monetary donations are used to support operational costs, like renting office space, and purchasing supplies necessary to mail books. 

3. Cracked It

This business is a smartphone repair service in London that is staffed by ‘at risk’ and formerly incarcerated youth. They teach life skills and provide employment and income opportunities to community members that are generally looked down upon and dismissed by greater society. 

4. 734 Coffee  

734 Coffee is a social venture dedicated to supporting Sudanese refugees. The business works with local co-op farms in Gambella to grow and harvest coffee, sells products to U.S. retailers, and uses a portion of profits to fund scholarships for Sudanese refugees. 

5. Belu

Based in the U.K., Belu sources and provides water with the lowest possible carbon footprint to hotels, restaurants, and catering businesses. 100% of net profits are donated to WaterAid , a business that provides clean water solutions to underserved communities. 

6. Tranquiliti  

Since 2018, Tranquiliti has worked with teachers, students, and mental health professionals to provide mental health services in schools. They aim to support mental wellbeing and improve educational performance by creating a positive, supportive learning environment. 

7. Surfrider Foundation

Surfrider Foundation is dedicated to environmental stewardship and is led by a community of volunteers and activists that launch campaigns to raise awareness for pollution, marine life protection, clean water, and coastal preservation. They currently have chapters in communities across the U.S.

8. SOIL  

Sustainable, Organic, Integrated Livelihoods (SOIL) is a nonprofit research and development organization that works to implement sustainable, low-cost solutions to the sanitation crisis in Haiti. They employ locally, and 92% of every dollar donated is used to support and enact their environmental programs.

Large Business Socialpreneurship

Below we’ll go over some examples of large for-profit enterprises that commit to using funds to support social causes. 

9. TOMS

TOMS arguably put social entrepreneurship on the map. It started as a one-for-one model; Buy a pair of shoes, and TOMS would give a pair to a child in need. Today, buying a pair of TOMS shoes or sunglasses provides shoes, sight, water, safe birth, and bullying prevention services to people across the globe.

10. Ben & Jerry’s

Ben & Jerry’s, a business primarily known for its ice cream, is also dedicated to using profits to contribute to social good. Their stated mission is “to create linked prosperity for everyone that’s connected to our business: suppliers, employees, farmers, franchises, customers, and neighbors alike,” and they’ve certainly committed to the cause. 

The business supports positive change in environmentally friendly farming and manufacturing processes, racial justice, and LGBTQ+ issues, to name a few, and they really put their money where their mouth is. For example, their ice cream is priced significantly higher than other brands, but they do so in order to pay their workers a livable wage of $18.13 an hour.

11. Warby Parker

In 2019, this eyewear company had donated over 5 million pairs of glasses to those in need through their “Buy a Pair, Give a Pair” program. They’ve also disrupted the eyewear industry and spawned countless copycat organizations.

12. Good Eggs

Good Eggs is an online grocery and meal kit delivery service that sets itself apart with fresh, local produce and meal kits for a variety of occasions. Their mission: over 70% of their food, wine, and spirits are locally sourced, and every item must meet a strict list of sourcing standards.

All employees also have a stake in the business, promoting transparent business practices and reinforcing their commitment to the health and safety of the businesses and communities they work with.

13. Lush

This cosmetics company cites environmental awareness and ethical consumerism as its bedrocks. All Lush cosmetics are free of packaging, and the company gives millions to environmental causes each year.

14. Uncommon Goods

Independent makers are the backbone of this company. They offer a marketplace for creatives to sell their goods with the aim of having a positive impact on people and the planet. They work to minimize their environmental impact and work with artists to use sustainable or recycled materials when possible.

15. GoldieBlox

GoldieBlox is a multimedia company committed to disrupting the “pink aisle in toy stores” by using storytelling to make the Science, Technology, Engineering, and Mathematics (STEM) field fun and engaging for young women, a demographic that is systematically underrepresented and underserved in the industry. They create toys, books, apps, videos, animations, and other merchandise to empower girls to build confident, empowered futures.

16. Pipeline Angels

In 2017, only 30% of U.S. angel investors were women and only 12% were minorities. Pipeline Angels aims to disrupt that statistic and commits to creating capital and investment opportunities for trans women, cis women, nonbinary, two-spirit, agender, and gender-nonconforming founders. 

They run a signature boot camp that educates investors, offer mentoring opportunities, and even host a pitch-summit for entrepreneurs seeking funding.

17. United By Blue

This is not your ordinary outdoor apparel store, as United By Blue commits to removing one pound of trash from the world’s oceans and waterways per every product purchased. At the time of publication, they’ve removed over three million pounds of trash . 

18. Shea Radiance

Co-founder Funlayo Alabi and her husband started making soap to solve their family’s dry skin problems. What started as an experiment to heal their sons’ eczema prone skin morphed into a clean and effective product line for hair, skin, and body. Alabi sources all Shea Butter directly from women-run cooperatives in West Africa, which ensures revenue ends up “in the hands of the women who have earned it.”

19. Werk

Werk believes the future of work is not unchangeable, it’s adaptive to each employee’s skills, motivations, and needs. By helping people find their Flextype, Werk believes they can make work flexible for everyone.

20. Oliberté

This shoe manufacturer is a sustainable brand supporting workers’ rights in sub-Saharan Africa. They launched their own factory in 2012 and make every pair of Oliberté shoes from this factory in Addis Ababa, Ethiopia. In 2013, they also became the world’s first Fair Trade Certified™ footwear manufacturing factory.

21. LSTN Sound Co.

Proceeds from the sales of LSTN speakers and headphones go towards giving hearing aids to people in need through their partner, Starkey Hearing Foundation.

22. FIGS

FIGS creates super-comfortable, ethically responsible scrubs. They create a high-quality product and donate hundreds of thousands of scrubs to healthcare providers in over 35 countries.

23. Love Your Melon

This apparel brand supports and donates to nonprofit organizations dedicated to battling pediatric cancer. 50% of net profits from all products help to create therapeutic experiences and create charitable programming initiatives for families affected by childhood cancer. 

Social Entrepreneurship Ideas

So, you want to do some good, but you’re not quite sure where to start? Here are a few social entrepreneurship ideas and some guidelines for how to develop an idea that’s all your own:

  1. Crowdfunding
  2. Baking for a cause
  3. Electricity or technology projects for the developing world
  4. Conflict-free or fair-trade goods
  5. Educational travel
  6. Employment services
  7. Crafting for a cause
  8. Micro-lending
  9. Facilitating exercise among disadvantaged communities
  10. Sustainability housing and development
  11. Mentorship or funding for entrepreneurs in developing countries
  12. Diversity and inclusion initiatives in the classroom
  13. A cooperative marketplace

How to Pick a Social Entrepreneurship Idea

Define your passions and areas of interest.

Do you firmly believe every child in America should have a pillow? Do you volunteer at a food pantry on the weekends? Are you an activist for certain local charities? Define what you’re passionate about and proceed to step two…

Identify existing market the gaps.

Once you know what you’re passionate about, it’s time to decide what the gaps are in existing products/services and determine how you can fill those gaps. If the food pantry you volunteer at can’t disseminate fresh, donated produce before it spoils, think about how you could provide a service that makes it faster and easier to get fresh produce to the underserved communities in your area.

Identify your key strengths and skills.

Are you an excellent writer or a salesperson extraordinaire? List your strengths and skills, and define how they can serve your mission. This is also an excellent time to identify your weaknesses, so you know who to call upon for help.

Decide on a business model.

Being a social entrepreneur is not always the same as starting a nonprofit. Determine whether you’ll monetize your idea, how you’ll monetize your idea, and decide on a business model. Whether you’re interested in a cross-compensation model like TOMS and Warby Parker or complete stewardship like Books to Prisoners, it’s important to understand how your business will be structured. 

If you’re still feeling stumped, don’t worry. Starting a business is a tedious, involved process, but there are various, successful social entrepreneurs that you can refer to as inspiration. 

Social Entrepreneurs

1. Jazzmine Raine

Raine is the founder of Hara House, the first zero waste guest house in Bikaner, Rajasthan, India. The area is a tourist destination with a vibrant environmental scene. Of the house’s profits, 20% go to helping local youth get involved in economic opportunities, social justice, and environmental education. The youth help run the guest house, tours, and a community center.

2. Muhammad Yunus

Yunus is the founder of Grameen Bank. This Bangladesh-based institution provides small loans to those living in poverty. 97% of their borrowers are women — and these women pay their loans back at a rate of 97%. The bank has managed a net income of $10 million, has 2,568 branches, and covers 93% of total villages in Bangladesh. His work has also earned Yunus a Nobel Prize. See his Talks at Google session on “The New Economics of Zero Poverty” below.

3. Scott Harrison

Charity: water CEO and INBOUND speaker Scott Harrison founded his nonprofit to bring clean, safe drinking water to people in developing countries. They track every dollar raised to the project it funds, and private donors cover their operating costs to 100% of the money they raise can fund their water projects. To date they’ve funded 38,113 water projects, helped almost 10 million people get clean water, and partnered with 37 local partners in 27 countries. Check out Harrison’s INBOUND 2018 keynote below.

4. Vava Angwenyi

Kenyan coffee entrepreneur Vava Angwenyi started with one small coffee bar in her town, but she was soon helping farmers improve the quality of their coffee, their brand, and their sales. Soon, Vava Coffee was born. Angwenyi’s company now serves as an exporter, roaster, and consultative partner working with more than 30,000 smallholder farmers who earn 18% more by working with Vava. Angwenyi’s first company has been so successful, it inspired her to start Gente Del Futuro, a cross-cultural coffee training program in Tanzania, Kenya, and Columbia. Hear more about Vava’s work in her recent presentation at the Re:co Symposium.

5. Durell Coleman

Coleman is the founder and CEO of DC Design, a social impact design firm putting design thinking to use solving some of the world’s biggest problems. His firm has addressed challenges in the criminal justice and foster care systems in the United States. They’ve also designed solutions for refugee camps, and they’ve worked with executives at global enterprise organizations like Sony, Oracle, and Santander.

6. Emily Kirsch

Kirsch started Powerhouse after working with solar startup Mosaic to put solar panels on houses in Oakland, California. Today, Powerhouse supports clean energy entrepreneurship through a network of energy-focused co-working spaces. It also offers venture backing for early-stage energy startups. Powerhouse also facilitates a series of signature events, from the Suncode hackathon to Powerhouse Circle and even a monthly podcast called “Watt it Takes.”

7. Tony Weaver Jr.

Weaver is founder and CEO of Weird Enough Productions, a media company focused on creating stories that inspire positive media images of black men and other minority groups. With every piece of content they create, they also produce a lesson plan for teachers to introduce media literacy to their students. Check out Weaver’s recent TEDx Talk below.

Social Entrepreneurship Is Here To Stay

When we were researching our book, Inbound Organization: How to Build and Strengthen Your Company’s Future Using Inbound Principles , my co-author Todd Hockenberry and I called out several examples of how social responsibility is an important component of having a competitive advantage in today’s marketplace.

In the age of heightened competition, social responsibility is a differentiating factor that allows many companies to appeal to specific buyer demographics. The idea of “Conscious Capitalism” gained mainstream attention when Whole Foods founder John Mackey published a book by the same name.

In addition, consumers, now more than ever, put their trust in brands that they believe are committed to taking action. For example, consumers are 80% more likely to trust a business that they believe is committed to solving societal issues, especially when it comes to racial justice. 

So, if you’re still interested in becoming a social entrepreneur — you couldn’t pick a better time. Formulate your plan today and make the world a better place.

 

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