What is Social Entrepreneurship: History, Ideas and Examples

what is social entrepreneurship
Social entrepreneurship can be said to be the setting up commercial ventures chiefly to solve a societal problem. Social entrepreneurs seek to blend business and social issues to change the lives of the people involved for the better.

Their metric for success lies not in profit alone, but also in the improvement they have been able to make in their world. While non-profit organizations strive to help society with grants and donations, businesses running on this model still earn a profit, but their major focus is on the benefits or environmental changes wrought while the profit is earned.

Nevertheless, it’s not easy to reach a consensus on what constitutes social entrepreneurship. Some experts believe that this business model refers solely to businesses who make money and attempt to solve a societal problem by selling services or products to consumers. While others believe the term should be expanded to include those who work to improve humanity or solve a societal problem using grants or funding from the government.

Also known as the “earned income” model, the first definition involves the entrepreneur is making money by selling something.

The customer is happy to patronize them because they know their purchase will go towards supporting a cause they are passionate about – whether it’s providing credit for poor market women or footwear for less-privileged children somewhere in Africa.

People love to do business with companies running these model because they feel good about helping solve a problem while spending money on stuff they need.


This concept and practice have long been in existence before the term came into being – and quite fashionable recently. Throughout history, there have been several enterprises that existed to solve some of the problems of the times or change their world positively.

A few that readily come to mind include the cooperative movement founded by Robert Owen, India’s land Gift Movement founded by Vinoba Bhave and establishment of the first nursing school by Florence Nightingale who also developed modern nursing practices.

There were several other individuals, organizations, and foundations who in the 19th and 20th century identified social problems and tried to address them: groups that advocated for child rights, environmental protection, women empowerment, etc.

In more recent times, the impact of entrepreneurs such as Muhammed Yunus of Grameen Bank, Jyotindra Nath of Youth United and Nick Reder, Norma La Rosa and Brent Freeman of Roozt has brought the concept of social entrepreneurship into mainstream consciousness and made the term popular.

An increasing number of big companies and brands are copying this approach and have successfully helped drive change in several areas all over the world.

Whether it’s making family planning more affordable for indigent women, reducing the spread of infectious diseases, increasing the literacy levels of the girl child, empowering traders and farmers with access to low-interest micro-credit or supporting environmental sustainability, corporate giants like Shell, eBay and Intel have lent their support financially and logistically.

There are programs that are being offered in universities across the world using this model which then helped to drive interest among young professionals who are eager to play a role in addressing social issues.


What makes a business owner a social entrepreneur?

As the concept of entrepreneurship continues to evolve, there are core characteristics that generally define what it means to be one. According to the Schwab Foundation for Social Entrepreneurship, social entrepreneurs have the following features:

  • They seek massive social change.
  • They concentrate their resources on their desired social or ecological change and at the same time earning money required to support the change.
  • They creatively find solutions to social problems.
  • The grow by listening to feedback and adjusting accordingly.


To give you further insight into what social entrepreneurship looks like, I’ve profiled a few noteworthy businesses running on the popular altruistic model. These include:

Warby Parker: it’s a New York-based eyewear company that sells prescription glasses and sunglasses. As well as disrupting the eyewear industry with their innovative approach, they have given away over 4 million pairs of glasses under their “Buy a Pair, Give a Pair” program.

Grameen Bank: they help provide small loans to the impoverished population to support them start-up businesses and become self-sufficient. The founder Muhammad Yunus, regarded as the father of micro-finance, was awarded the Nobel prize for his work in 2006.

Shea Radiance: This line of skin-care products was Co-founded by Funlayo Alabi and her husband. While looking for an effective cure for their son’s eczema, they stumbled upon a recipe that gradually grew into a robust product line for skin, hair, and body. This start-up sources their shea butter from cooperatives run by women in Ghana and Nigeria. The idea is to support hard-working women who are often at the lower end of the economic pecking order.

Badala.org: an e-commerce site that creates jobs for African women by selling items made by them. It was founded by Joelle McNamara while she was still in high school. Their range of products includes wooden kitchen utensils, bath products, and jewelry.

How to Become a Social Entrepreneur

In today’s, world, there are so many problems which adversely affects the more vulnerable members of society. You probably have come across a few businesses who try to solve these societal challenges during their operations.

On several occasions, you may have been moved to contribute in a more significant way than say, patronizing a shop that sends shoes to needy kids anytime you buy a pair.

Do you want to become a social entrepreneur? However, the big question is: how do you go about it?

Social Entrepreneur

Here are a few social entrepreneurship ideas to guide you:

Find what lights your fire

Start by identifying the thing that matter most to you. Are you bothered whenever you come across some homeless man shivering in the cold? Do you see yourself compelled to donate to a particular charity? Do you have the unwavering conviction that no child should go without proper nutrition?

Determine what needs to be done

When you have defined what you’re passionate about, you then have to figure out the gaps in the existing products/services that cater to these needs and determine how you can cover those gaps. Let’s say the cost of providing clothes for the homeless is on the high side. Can you source quality clothing from a cheaper source? And therefore clothe more people?

Know where your strength lies

Find out the things you have a flair for. You might be a good people person, or you can communicate ideas succinctly. Whatever your skill and strong points are, find how you can apply them to further your cause.

Decide on a business model

A social enterprise should have a way of generating profit and at the same time achieve their charitable goals. Consider the business model you can follow for maximum impact. For instance, a cooperative model provides services to subscribing group members with shared needs or aspirations. Or you can adopt the market linkage model whereby you build relationships and connect your clients with the market for their services and products.

Planning and implementing a correct business structure at the onset is essential for the venture to succeed.

There’s been a steady rise in the popularity of the term Social Entrepreneurship. In fact, it’s been one of the favorite buzzwords for the past decade. More organizations are businesses are taking their corporate social responsibilities serious which makes them more appealing to consumers in specific demographics, thereby giving them a competitive advantage. If you have the passion for making an impact in the society, there’s never been a better time to start your journey and help create a better world.

Founder, writer, thinker and digital marketing addict. He is passionate about self-development, personal finance, and the stock market. He believes that financial knowledge combined with self-discipline is the key to achieving financial freedom. An avid golfer and a 15 handicapper.

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