The phenomenon of Social Entrepreneurship refers to the application of an entrepreneurial process in order to achieve social goals. This adoption of traditional business principles has captured the fascination of social change activists around the world, and yet, a lack of understanding its characteristics such as value proposition, opportunity, innovation and the creation of value can be observed. At the same time, similar changes in the philanthropic sector are taking place, with the phenomenon of Venture Philanthropy pioneering a new model of financing social change by translating the conventional venture capital approach from the business world to the social sphere, turning philanthropists into social investors. These complementing phenomena show a new relation between the financing and executing side in the social sector and challenge traditional categories such as non-profit vs. for-profit by choosing hybrid organizational forms. As these changes advance, efforts towards the creation of a social capital market that build on these two phenomena can be observed in order to restructure the current system of financing social change, applying principles from the financial markets. These changes challenge the traditional dichotomy of social and economic value that defines our current understanding of capitalism.
Contents
1 Introduction
2 The phenomenon of Social Entrepreneurship
2.1 The emergence of Social Entrepreneurship
2.2 Actors in the emerging field of Social Entrepreneurship
3 The definition and process of Social Entrepreneurship
3.1 Definition of entrepreneurship
3.2 Social Entrepreneurship vs. Business Entrepreneurship: Analyzing the process and defining the difference
3.3 Entrepreneurial traits in the process of Social Entrepreneurship
3.4 The assessment of value creation
4 The case of two socially entrepreneurial ventures
4.1 Grameen Bank
4.2 Associação Saúde Criança Renascer
5 Philanthropy – a source of resource for Social Entrepreneurship
5.1 The phenomenon of philanthropy
5.2 Changes in the structure of philanthropic practice
6 Venture Philanthropy – the other side of Social Entrepreneurship
6.1 Definition of Venture Philanthropy
6.2 The case of two Venture Philanthropy organizations
6.2.1 Ashoka – Innovators for the Public
6.2.2 Echoing Green
6.3 The relation between Venture Philanthropy and Social Entrepreneurship
7 Social Stock Exchange – connecting philanthropists and social entrepreneurs
7.1 The need for a coordinating mechanism in the market for social financing
7.2 The Social Stock Exchange in Brazil
7.3 Perspectives for the social sector capital market
8 Conclusion and Perspectives
Objectives and Topics
This thesis explores the phenomenon of Social Entrepreneurship (SE) and its evolving relationship with the philanthropic sector. It investigates how entrepreneurial processes are applied to achieve social goals, examines the challenges of defining and measuring social value, and analyzes emerging mechanisms like Venture Philanthropy and Social Stock Exchanges that seek to bridge the gap between social purpose organizations and capital providers.
- Theoretical foundations and definitions of Social Entrepreneurship.
- Comparative analysis of Social Entrepreneurship versus Business Entrepreneurship.
- Case studies of social ventures (Grameen Bank, Associação Saúde Criança Renascer).
- Evolution of philanthropic practices and the emergence of Venture Philanthropy.
- Structures and prospects for a functioning social sector capital market.
Excerpt from the Book
The emergence of Social Entrepreneurship
The emergence of SE is embedded in the larger context of changes in the social sector in the past decades. Lester Salamon, the founding director and principal research scientist at the Institute for Policy Studies at Johns Hopkins University (1994 cited in Bhagwati 2004, p. 36) observed a tendency within this sector that he called the “association revolution” with reference to the spread of NGOs: The upshot [of this “striking upsurge” in “organized voluntary activity and the creation of private, nonprofit, non-governmental organizations”] is a global third sector: a massive array of self-governing private organizations, not dedicated to distributing profits to shareholders or directors, pursuing public purposes outside the formal apparatus of the state.
Despite their magnitude, these changes have been underreported. The explosion of the ‘dot-coms’ gained major public attention, but millions have still not heard about the explosion of ‘dot-orgs’. (Bornstein 2004). Salamon (2003 cited in Nicholls 2006, p. 3) points out the significance of these changes by stating that […] the not-for-profit sector generated $1.3 trillion of aggregate expenditures in 1999, accounting for 5.1 per cent of the combined GDPs of the countries in which they operated. […] with nearly 40 million full-time equivalent workers and close to 200 million volunteers.
These organizations in the social sector grew in number and sophistication and comprise people who care and take action to serve others and cause needed change. In order to cause this change, a variety of different organizations, working with non-profit, for-profit sector, or often hybrid organizational structures, emerged in this social sector. Obviously, not all of these ventures can be defined socially entrepreneurial, but still such data proves that the social sector was experiencing massive changes and SE emerged as a substantial part of it. According to Bornstein (2004), there are and have always been social entrepreneurs. What has changed is the scale and reach of the social impact being generated, as well as the variety of approaches being employed.
Summary of Chapters
1 Introduction: Provides an overview of Social Entrepreneurship, highlighting its rise in public and academic discourse and its connection to global social challenges.
2 The phenomenon of Social Entrepreneurship: Explores the context of SE's emergence and introduces key actors that influence the field's development.
3 The definition and process of Social Entrepreneurship: Develops a comprehensive definition of SE by analyzing entrepreneurial traits, organizational forms, and the assessment of social value.
4 The case of two socially entrepreneurial ventures: Illustrates theoretical concepts through case studies of the Grameen Bank and Associação Saúde Criança Renascer.
5 Philanthropy – a source of resource for Social Entrepreneurship: Analyzes the philanthropic landscape, including changing trends in giving and the role of philanthropy as a resource for social ventures.
6 Venture Philanthropy – the other side of Social Entrepreneurship: Examines Venture Philanthropy as a model that applies business-like management practices to the social sector.
7 Social Stock Exchange – connecting philanthropists and social entrepreneurs: Investigates the concept of social stock exchanges as mechanisms to coordinate supply and demand in the social finance market.
8 Conclusion and Perspectives: Summarizes key findings and reflects on the potential for a new understanding of capitalism integrating social and economic values.
Keywords
social entrepreneurship, philanthropy, social sector capital market, venture philanthropy, social value, innovation, entrepreneurship, micro-credit, social impact, NGO, social business, Grameen Bank, Associação Saúde Criança Renascer, social stock exchange, sustainable development.
Frequently Asked Questions
What is the core subject of this research?
The research focuses on the phenomenon of Social Entrepreneurship (SE) and its intersection with current developments in philanthropy, specifically how business principles are being integrated into the social sector.
What are the central themes of the work?
Central themes include the definition and process of SE, the role of philanthropy as a resource, the emergence of Venture Philanthropy, and the creation of social sector capital markets.
What is the primary objective of this thesis?
The primary objective is to contribute to a deeper understanding of Social Entrepreneurship, its operational nature, and its relationship with the financing side of the social sector to address global challenges effectively.
Which scientific methods were employed?
The thesis utilizes a qualitative research approach, incorporating an analysis of existing literature and case studies to ground the findings in empirical practice.
What topics are discussed in the main part?
The main part covers the historical context of SE, the definition of social versus business entrepreneurship, practical examples of successful social ventures, the mechanics of Venture Philanthropy, and the feasibility of social stock exchanges.
Which keywords characterize the work?
Key terms include social entrepreneurship, philanthropy, social sector capital market, venture philanthropy, social value creation, and institutional change in the social sector.
How does the author define the difference between a social and a business entrepreneur?
The primary difference lies in the value proposition: while business entrepreneurs focus on creating economic value, social entrepreneurs prioritize the creation and sustainability of social value as their overarching goal.
What specific role does the Social Stock Exchange play in this study?
The Social Stock Exchange is presented as a pioneering mechanism for linking social purpose organizations with potential investors, aiming to increase transparency, credibility, and efficiency in the social finance market.
- Quote paper
- Frederik Teufel (Author), 2007, Social Entrepreneurship , Munich, GRIN Verlag, https://www.grin.com/document/93056
