What Exactly Is Social Entrepreneurship in America?

“Whenever I see a problem, I start a business,” said Nobel Laureate Muhammad Yunus at the May 24th kick off program of the Commonwealth Club’s series on social entrepreneurship in America. Dr. Yunus hit upon one of the main themes of the series: the blurring line between profit and nonprofit, business and charity when providing a social good. 

Muhammad Yunus has been pushing the envelope when it comes to the notion of business for social good since his first loan of $27 in his native Bangladesh. His current idea is to push this notion even further. He believes that it is possible to run successful “social businesses”—businesses that provide a social good but do not derive profit. In his book, he cites several examples of companies working with Grameen according to this model: Grameen Danon providing low-cost yogurt to children in Bangladesh; Grameen Veolia providing inexpensive, clean water; and Grameen Intel using Intel technology to more accurately monitor infant-maternal health. Dr. Yunus believes that companies should want to engage in this type of business as it enhances corporate reputation, pride and employee loyalty. Certainly, there is no question that the pioneering firms working with Dr. Yunus are learning a great deal about working with the poor in Bangladesh and receiving worldwide recognition for their groundbreaking partnerships with this amazing Nobel Laureate.

Whether there is a profit motive or not, the notion that business has a role to play in addressing societal issues is at the heart of today’s discourse on social entrepreneurship. Defining what social entrepreneurship is and differentiating between social entrepreneurship, traditional nonprofit management, and philanthropy is indeed a flourishing discourse. Coined by Bill Drayton of Ashoka in the early 1980’s, the term “social entrepreneurship” has become somewhat of a catch-all phrase. Originally it referred to someone with the passion of an entrepreneur tackling a social challenge. Now, it has evolved to a number of meanings, including but not limited to social interventions with distinctly business characteristics, and even businesses themselves. The Commonwealth Club series defines a social entrepreneur as “an innovator utilizing entrepreneurial passion and rigor to solve societal problems.”

Still, this discourse is confined to a relatively small group of people. Most are not familiar with the phrase or its meaning. In fact, in a totally unscientific study, I stopped eight people on University Avenue in Palo Alto and asked them if they were familiar with the term social entrepreneurship. Surprisingly, six of them thought it had something to do with a business on a social networking site! The other two mentioned microfinance.

In order to acquaint more people with the notion of social entrepreneurship and, more importantly, inspire some of them to get involved, the Commonwealth Club has launched its series “Social Entrepreneurship in America.” Throughout the series, a variety of perspectives will be shared that taken together will showcase much of the exciting and paradigm shifting thinking from the leading lights in the field. More information on the series can be found at www.commonwealthclub.org/sea. We hope that those interested in the field will come to the programs so that the vibrancy of the thinking in this space will be represented in the programs as well.

Full disclosure: Kriss Deiglmeier, the executive director of the Center for Social Innovation at the Stanford Graduate School of Business, is a speaker in this series.

Read more stories by Ruth Shapiro.