Social entrepreneurship and social enterprise
Making a positive social impact is a key component of many entrepreneurial approaches and business models. Yet creating social change can be a consequence of many different kinds of enterprises. Social entrepreneurship is on the rise across the globe, and social impact leaders are taking note.
Social entrepreneurship differs from nonprofit organizations or corporate social responsibility (CSR). The latter concept is really a business model for being a good and responsible corporate citizen, although social improvement may not be mission-critical under a CSR model, which still looks to generate maximum profits for the corporation itself. Nonprofit organizations by definition reinvest profits into the organization itself.
Social entrepreneurship, or social enterprise, offers a middle way between a CSR and a not-for-profit approach. Under a social entrepreneurial model, return on investment follows the achievement of some specific, measurable large-scale or even global social impact. This model is becoming increasingly attractive to a lot of investors, who are always on the lookout for new social entrepreneurship opportunities.
If you are a social impact leader, chances are you and your organization are already positioned somewhere on the social enterprise spectrum. In this post, I will contextualize the broader concept of social entrepreneurship funding and give you some practical tips for determining your organization’s eligibility for these kinds of funding opportunities.
Researching Social Entrepreneurship Funding Opportunities
Social entrepreneurship grants are some of the fastest-growing and most competitive kinds of funding available today. Organizations like Alquity are investing huge amounts of financial capital into social entrepreneurship.
If you are a social impact leader, then researching social entrepreneurship opportunities can be a valuable investment of time. Utilize networks, engage with philanthropic organizations and look for competitive funding opportunities. Some competitions are open, while others are more restrictive, requiring preliminary referrals and nominations before an entrepreneur can be considered for funding.
The trick to any funding pursuit is having a strong argument for innovation and fit. If you are clear about the solution your organization can deliver and the context in which the deliverables can occur, then you can make more accurate and efficient determinations about your eligibility for various kinds of social entrepreneurship funding.
Researching funding opportunities is a little like looking for a job. Your organization probably can be categorized within a particular discipline or field of endeavor. But within each category, there is significant variation. Just like you likely maintain multiple resumes or CVs, each proposal or application for funding can highlight different aspects of your business model and its strategic implementation(s).
Your mission will keep you grounded. As long as you are staying within the boundaries laid out by your organization’s mission, be bold in your pursuit of funding. Developing different proposals and rationales for support can be a great way to engage your team and leverage the human capital in your organization.
General Eligibility Considerations
While each funding source has its own specific criteria, there are a few things that most funders of social entrepreneurship look for:
- Have a realistic sense of which phase of development your organization is presently in. Most funders will expect (even if they do not explicitly ask for) you to talk about which developmental stage your organization is presently at and where your organization is looking to go in the immediate future. Some potential investors may fund early-stage organizations, whereas other sources may be looking for evidence of growth and sustainability. Either way, knowing exactly where your organization stands developmentally is important.
- Look for mission compatibility. If your organization’s mission is issue-focused, then you might not be a viable candidate for funding that is sector-based. The same goes for profit versus nonprofit. Some organizations will invest social capital only in for-profit organizations, whereas other funding sources, especially foundation grants, may be limited to nonprofits. It is always a good idea to keep in mind the distinctions among for-profit organizations, nonprofits and social enterprises.
- Understand scalability. Many global social entrepreneurship funders will be looking to see if your organization’s business model is scalable, able to adaptively grow in size and scope depending on the social problem you are working to solve.
- Know your organization’s human capital. While just about all social entrepreneurship funding is mission-focused, some funding sources are looking to invest in developing organizational leaders. Fellowships can be a great way to develop the human capital in your organization and build your organizational network.
If at first, your organization does not look like a good fit for this kind of funding, think about ways you can lead your organization toward a greater degree of eligibility. Make a list of all the ways your organization might already create social impact. This can also be a great way to engage your team. As a group, review eligibility standards and FAQs, which are almost always published on the websites of funding sources, in terms of your own strategic and business plans. You can also look for a social impact movement that aligns with the explicit aims and/or the implicit values of your organization’s mission, and then network with leaders and other organizations in that movement.
Social entrepreneurship courses can help you find ways to introduce or further develop this kind of social enterprise in your organization. We offer several free social impact courses in our catalog.