The Power of a Simple and Inclusive Definition

It’s no secret that the social entrepreneur movement is characterized by confusing and often-contradictory definitions—for example, nonprofits that charge a fee for service and for-profits that have a social impact. Our failure to adequately define the social entrepreneur movement has made it inaccessible to the very communities where cutting-edge innovation is likely to come from.

Attempts at clear definitions are not new. In Stanford Social Innovation Review’s spring 2007 article “Social Entrepreneurship: The Case for Definition,” Rotman School of Management’s Roger Martin and Skoll Foundation’s Sally Osberg made a pioneering attempt at defining the field of social entrepreneurship. It uses apt phrases such as “unjust equilibrium,” “transformative benefit,” “social value proposition,” and “stable state hegemony.” But for many people interested in pursuing social entrepreneurship, this language is too abstract and difficult to understand.

In his book Creating a World Without Poverty: Social Business and the Future of Capitalism, Noble Laureate Muhammad Yunus, a hero among social entrepreneurs, defines social business this way: “[It is] a non-loss, non-dividend company designed to address a social objectives within the highly regulated marketplace of today. It is distinct from a nonprofit because the business should seek to generate a modest profit, but this will be used to expand the company’s reach, improve the product or service or in other ways to subsidise the social mission.”

Definitions offered by leaders like Yunus and Osberg are no doubt useful to entrepreneurs who align with their organizations’ approach to social change, but they are not inclusive. Skoll, organized as a tax-deductible organization, resists giving money to for-profit entities. On the other hand, social entrepreneur organizations such as Crowdfunder and The William James Foundation align with the Yunus definition and admit only for-profit social entrepreneurs to their contests. Consequently, those looking to engage in the social entrepreneur movement often get too focused on their organization’s legal structure, when they should be focused on vision and impact.

A New Definition for Social Entrepreneurs

Michigan faces difficult social challenges with its two largest cities. Flint and Detroit are ranked as the first and second most dangerous cities in the United States, respectively—a result of myriad of social issues. This is the kind of place where the social entrepreneur movement needs to scale. Michigan recently became the nation’s first state to hold a statewide social entrepreneurship contest, in partnership with the Michigan Economic Development Corporation (MEDC). As part of the delivery and training team for the contest, we needed a definition that was inclusive and welcoming to a new generation of social entrepreneurs, and also clear enough for coaches and judges who may have never heard of the concept to understand.

We developed a simple definition, married to a five-point checklist, to describe an excellent social entrepreneur without regard to tax status or a specific approach:

A social entrepreneur is a pragmatic visionary who tenaciously addresses social problems by creating an innovative, sustainable, system-changing solution.

1. The entrepreneur is a tenacious leader with a pragmatic vision.
2. The solution addresses a clear social problem.
3. The solution changes systems, not just symptoms of the problem.
4. The model prioritizes social impact over financial gain.
5. The model generates a sustainable funding stream.

We know this isn’t the final word on defining social entrepreneurship. But what we discovered was that distilling a clear and simple set of distinguishing characteristics invited greater grassroots participation of contestants, judges, and coaches. It also attracted a broader network looking to support this movement. The response was overwhelming, with more than 250 teams entering the contest.

The ability to scale the social entrepreneur movement is undermined by our collective failure to define it simply and inclusively. What we learned in Michigan is that when we take the risk to be clear, simple, and welcoming, we can unleash the innovative power of an entire new generation of change agents.

Read more stories by Rich Tafel & Elizabeth Garlow.