Social Enterprise: A Market Based Approach to Poverty Alleviation

1. Social Enterprise:A Market Based Approach to Poverty Alleviation SEEP Network

2. State of the Practice • Emerging as a field • Practiced for years • Fragmented • Transcends several sectors • Few methodologies and industry-own resources • Until recently private funding • Receiving lots of media attention • Universities & research institutes

3. Working Definition of Social Enterprise • A social enterprise is any business venture created for asocial purpose—mitigating/reducing a social problem or a market failure—and operating with the financial discipline, innovation and determination of a private sector business - Virtue Ventures 2005

4. Social Enterprise Characteristics • Social Purpose - created to generate social impact and change by solving a social problem or market failure • Enterprise Approach – uses business vehicles, entrepreneurship, innovation, market approaches, strategic-orientation, discipline and determination of a for-profit business • Social Ownership – public good; stewardship, rather than legal structure

5. Social Enterprise Design is Driven by Social Concern Rather than Financial or Market Opportunities The social problem IS the business opportunity

6. Social Problem Food insecurity Deforestation Subsistence farming Limited economic opportunities Hunger Barriers to employment Social Enterprise Agricultural products store & bakery Ecotourism Natural products Tool Library & School Restaurant Landry, housecleaning, thrift, etc. Reduce social problems w/enterprise

7. Well-Known Examples • Aravind Eye Hospital • Kickstart • echopal • Equal Exchange • Greyston Bakery • HealthStore • Grameen

8. Purely Philanthropic Hybrid Purely commercial Type of Organization Traditional NGO Social Enterprise Traditional for-profit Motives Appeal to goodwill Mixed motives Appeal to self-interest Methods Mission-driven Balance of mission and market Market-driven Goals Social value creation Social and economic value creation Economic value creation Destination of Income/Profit Directed toward mission activities of NGO (required by law or organizational policy) Reinvested in mission activities or operational expenses, and/or retained for business growth and development Distributed to shareholders and owners Social Enterprise is a Hybrid Adapted from Gregory Dees; and Lee Davis and Nicole Etchart.

9. Employment Model Market Social Enterprise Clients Product Social Impact Financial Sustainability

10. Client Entrepreneur Model Market Social Enterprise Services Product Financial Sustainability Social Impact

11. Fee-For-Service Model Services Clients Social Impact Social Enterprise Sustainability

12. TOPLA TOPLA Market Intermediary Model Social Enterprise Market Clients Financial Sustainability Social Impact

13. Cooperative Model Social Enterprise Clients Market Market Product Social Impact Financial Sustainability

14. Service Subsidization Model Social Enterprise Clients Services Social Impact Financial Sustainability Market SocialImpact

15. Web Resources • Ashoka and Skoll Centre www.universitynetwork.org • The Center for the Advancement of Social Entrepreneurship, Duke (http://www.fuqua.duke.edu/centers/case) • NESsT (www.nesst.org) • Ashoka (www.changemaker.net) • REDF (www.redf.org) • Virtue Ventures http://www.virtueventures.com) • Social Enterprise Reporter (www.se-reporter.com) • Social Edge (www.se-alliance.org) • Schwab Social Entrepreneurs (www.schabfoundation.org) • World Resources Institute (www.netbillion.org) • Partnership on Nonprofit Ventures (www.yale.ventures.edu) • William Davidson Institute University of Michigan (http://www.wdi.umich.edu) • Skoll World Forum on Social Entrepreneurship Oxford University