Can start-ups change the world?

Executive Summary

Global interest in social entrepreneurship is growing, as investors, corporations, academic institutions and foundations support individuals trying to solve intractable global problems, from abject poverty in the developing world to the ravages of climate change. Whether working in for-profit, nonprofit or hybrid organizations, these entrepreneurs are applying sound business principles and attempting to scale their solutions to reach the greatest number of people. The popularity and even trendiness of social entrepreneurship is attributed to the rise of the Millennial Generation, many of whom want businesses to prioritize social innovation and a concern for people over profit. But social entrepreneurs face a strong chance of failure, and serious challenges remain, from getting adequate funding to sustain growth to maintaining focus on social mission and impact as a venture grows. Among the questions under debate: Does a social enterprise need to be self-sustaining? Should investors and social entrepreneurs be allowed to profit from a social enterprise? Can social enterprises stay true to their mission if they become large and successful?

Resources

Bibliography

Books

Bornstein, David, “How to Change the World: Social Entrepreneurs and the Power of New Ideas,” updated ed., Oxford University Press, 2007. A journalist discusses the growth of social entrepreneurship through the story of Ashoka and its founder, Bill Drayton, and recounts case studies of successful social entrepreneurs.

Bornstein, David, and Susan Davis, “Social Entrepreneurship: What Everyone Needs to Know,” Oxford University Press, 2010. Journalist Bornstein and social entrepreneur Davis offer a primer on the meaning of social entrepreneurship, its execution and its exemplary leaders.

Kayser, Olivier, and Maria Valeria Budinich, “Scaling Up Business Solutions to Social Problems: A Practical Guide for Social and Corporate Entrepreneurs,” Palgrave Macmillan, 2015. Two activists in the social entrepreneurship movement address the problem of increasing the scale of an organization's work, and they present case studies on effective approaches around the world.

Kiser, Cheryl, Deborah Leipziger and J. Janelle Shubert, “Creating Social Value: A Guide for Leaders and Change Makers,” Greenleaf Publishing, 2014. Focusing on the importance of leadership and creating social change, this book from Babson College faculty includes examples of social innovation from both social entrepreneurs and large corporations.

Lane, Marc J., “The Mission Driven Venture,” Wiley, 2015. A prominent lawyer in the field of social enterprise gives a detailed account of corporate forms and legal issues; he writes primarily for a legal audience, but the information is useful for social entrepreneurs.

MacMillan, Ian C., and James D. Thompson, “The Social Entrepreneur's Playbook: Pressure Test, Plan, Launch, and Scale Your Social Enterprise,” expanded ed., Wharton Business Press, 2013. A guide that grew out of an e-book on social entrepreneurship offers solid advice to help businesses move from uncertainty to manageable risk, without sugar-coating the challenges for social entrepreneurs.

Articles

Battilana, Julie, et al., “In Search of the Hybrid Ideal,” Stanford Social Innovation Review, Summer 2012, http://tinyurl.com/n9mctl5. Researchers from Harvard Business School and Echoing Green, which runs fellowships for social entrepreneurs, examine the challenges facing those hybrid organizations that combine aspects of nonprofits and for-profits.

Bornstein, David, “The Rise of the Social Entrepreneur,” Opinionator, The New York Times, Nov. 13, 2012, http://tinyurl.com/nf3vqg7. A journalist who has written extensively about the field discusses the role of social entrepreneurs in solving big societal problems.

Caligiuri, Paula, “When Unilever Bought Ben & Jerry's: A Story of CEO Adaptability,” Fast Company, Aug. 14, 2012, http://tinyurl.com/8jwmv9g. A magazine for entrepreneurs recounts Ben & Jerry's history as a socially responsible business and discusses the plans of the international corporation that bought it.

Chen, Jane, “Should Your Business Be Nonprofit or For-Profit?” Harvard Business Review, Feb. 1, 2013, http://tinyurl.com/q2q2tkg. The co-founder of a social enterprise uses her personal experience to discuss the challenges of choosing a for-profit or nonprofit structure.

Cooke, T.J., “4 Benefits that B Corps Didn't See Coming,” The Huffington Post, Aug. 17, 2015, http://tinyurl.com/p28dpa6. Social entrepreneur discusses the unanticipated benefits that four social enterprises discovered in becoming certified B Corps.

Dees, Greg, “The Meaning of Social Entrepreneurship,” Kauffman Foundation and Stanford University, revised May 30, 2001, http://tinyurl.com/pbtx6lt. This classic article defining social entrepreneurship was written by the late Greg Dees, who is considered the founder of social entrepreneurship as an academic discipline.

Isaac, Mike, and David Gelles, “Kickstarter Focuses Its Mission on Altruism Over Profit,” The New York Times, Sept. 20, 2015, http://tinyurl.com/ocmxml4. Crowdfunding site Kickstarter reincorporated as a public benefit corporation.

Kell, John, “What does social entrepreneurship mean to actor Adrian Grenier?” Fortune, March 30, 2015, http://tinyurl.com/nl52bvs. Social entrepreneur and actor Adrian Grenier talks about his decision to judge a social entrepreneurship competition.

Leimsider, Rich, “5 Bad Reasons to Start a For-Profit Social Enterprise,” July 30, 2014, Harvard Business Review, http://tinyurl.com/oq39vbh. The former vice president of fellowship programs at Echoing Green looks at misconceptions about the for-profit model.

Milway, Katie Smith, “How Social Entrepreneurs Can Have the Most Impact,” Harvard Business Review, May 2, 2014, http://tinyurl.com/ojrrruv. A partner in the Bridgespan Group, a consulting firm that specializes in advising mission-driven organizations, discusses three tips for maximizing social impact.

Schatz, Robin D., “Are You Cool Enough To Eat Bugs?” Forbes.com blog, Aug. 6, 2015, http://tinyurl.com/q8dhzjk. Exo makes cricket-based protein bars to promote entomophagy—eating insects—as a way to address food security and environmental impact.

Schatz, Robin D., “How a Social Entrepreneur Overcame His ‘Arrogant Failure’ And Won Kudos From Oprah,” Forbes.com blog, Oct. 18, 2015, http://tinyurl.com/q8dhzjk. Gavin Armstrong, founder of social enterprise Lucky Iron Fish, reexamined his business plan after he realized that Cambodians were reluctant to buy his product from door-to-door salespeople.

Reports and Studies

“Impact Investment: The Invisible Heart of Markets,” Social Impact Investment Taskforce, Sept. 15, 2014, http://tinyurl.com/pdks3yv. A task force that examined impact investing globally makes a number of recommendations for ways that governments and other participants can improve legal systems, remove barriers, measure impact and otherwise support such investment.

Saltuk, Yasemin, et al., “Eyes on the Horizon: The Impact Investor Survey,” JPMorgan and Global Impact Investing Network, May 4, 2015, http://tinyurl.com/q4khgfn. Annual survey from JPMorgan and the Global Impact Investing Network highlights the growing global market for impact investments across all sectors.

The Next Step

B Corps

Gili, Enrique, “B-Corps challenge environment vs. profit paradigm,” Deutsche Welle, June 30, 2015, http://tinyurl.com/pq4hmle. The nonprofit B Lab's certification process for B Corps companies requires them to closely monitor their supply chains and employment practices.

Lawson, Sarah, “Is B Corps or Fair Trade Certification Right For Your Company?” Fast Company, Oct. 6, 2015, http://tinyurl.com/qcpv8b8. Companies should consider membership fees, workplace culture, organizational structure and their overall mission when choosing whether to apply for B Corps—or fair trade certification, according to the founder of the world's only fair trade shoe company.

Tabuchi, Hiroko, “Etsy I.P.O. Tests Pledge to Balance Social Mission and Profit,” The New York Times, April 16, 2015, http://tinyurl.com/o8vpzlf. Online craft marketplace Etsy became the second publicly traded, B Lab-certified company, a move that will require it to balance maintaining its social mission with meeting shareholder demands.

For-Profit

MacArthur, Kate, “Pipeline Angels fuels women-owned, socially conscious startups,” Chicago Tribune, Nov. 10, 2015, http://tinyurl.com/q44ml93. A New York-based angel investment network has trained 180 female philanthropists, many of whom once donated mostly to nonprofits, to invest in successful for-profit social ventures.

McBride, Elizabeth, “How Honest Tea conquered the US beverage market,” CNBC, Nov. 11, 2015, http://tinyurl.com/ngjgynn. Maryland-based organic beverage company Honest Tea has preserved its socially responsible mission to produce healthy, low-sugar drinks despite being acquired by soda manufacturer Coca-Cola.

Pledger, Marcia, “Successful small businesses with social missions find products, service have to come first,” Cleveland Plain Dealer, Nov. 12, 2015, http://tinyurl.com/q3annem. Start-up social enterprises become more successful by attracting customers with successful products rather than by marketing their social mission, according to the director of a Cleveland-area social enterprise accelerator.

Global Impact

Baritugo, Kei, “Changing the world, one startup business at a time: Spring Activator's mission expands globally,” The Vancouver Observer, Oct. 22, 2015, http://tinyurl.com/ppglk5p. Two social investment support organizations in Vancouver and Seattle have joined together to mentor entrepreneurs and raise capital for for-profit social start-ups from outside countries.

Foley, Stephen, “Gates cautious on ‘impact investing,’” Financial Times, Oct. 30, 2015, http://tinyurl.com/nchqlz4. Microsoft founder and philanthropist Bill Gates said that while impact investing is popular among billionaire charitable donors, he expects charity to remain the dominant way to address global social issues.

Jenkin, Matthew, “It's not charity: the rise of social enterprise in Vietnam,” The Guardian, March 31, 2015, http://tinyurl.com/qalp7p7. Many Vietnamese investors doubt whether social enterprises effectively contribute to social causes in their country, although some are learning about their benefits from Western nations, according to the director of a consultancy for deaf education in Vietnam.

University Programs

Adeniji, Ade, “Millions to Foster Social Entrepreneurship on a California Campus. Will More Follow?” Inside Philanthropy, May 8, 2015, http://tinyurl.com/pdn8y8b. A Silicon Valley venture capitalist and his wife donated $25 million to Santa Clara University's Center for Social Entrepreneurship, which focuses on creating social change through science and technology.

Bing, Chris, “Life and Social Entrepreneurship Inside Georgetown's Halcyon Incubator,” DC Inno, July 27, 2015, http://tinyurl.com/q4fh2z7. Georgetown University in Washington, D.C., created its own on-campus incubator that offers start-up founders housing, a collaborative workspace and adviser networks.

Ladika, Susan, “Socially Conscious,” International Educator, March and April 2015, http://tinyurl.com/oaus5rt. Florida State University is among a number of universities that have founded social entrepreneurship programs in which students learn skills required to run a social enterprise by working alongside nonprofits in other countries.

Organizations

Ashoka—Innovators for the Public
1700 N. Moore St., Suite 2000, Arlington, VA 22209
703-527-8300
www.ashoka.org/
Fellowship program that invests in social entrepreneurs; supports education to foster empathy and social change.

B Lab
155 Lancaster Ave., Wayne, PA 19087
610-293-0299
https://www.bcorporation.net/
Group established by socially oriented firms to certify B Corporations, provide analytics for benchmarking and lobby for benefit corporation legislation in United States.

Center for the Advancement of Social Entrepreneurship
Fuqua School of Business, Duke University, 100 Fuqua Drive, Durham, NC 27708
919-660-7734
https://centers.fuqua.duke.edu/case/
Research and education center that prepares leaders and organizations to achieve lasting social change.

Echoing Green
462 Seventh Ave., 13th Floor, New York, NY 10018
212-689-1165
http://www.echoinggreen.org
Group that supports social entrepreneurs with three fellowship programs; impact investing; and curriculum and training for young leaders.

Global Impact Investing Network (GIIN)
30 Broad St., New York, NY 10004
212-852-8349
www.thegiin.org/
International group that represents the impact investment industry.

Schwab Foundation for Social Entrepreneurship
91-93 Route de la Capite, CH-1223 Cologny/Geneva, Switzerland
+41 (0) 22 869 1212
www.schwabfound.org
Internationally oriented group that highlights and advances models of sustainable social innovation; identifies select social entrepreneurs; and engages in shaping global, regional and industry agendas that improve the state of the world.

Skoll Foundation
250 University Ave., Suite 200, Palo Alto, CA 94301
650-331-1031
www.skollfoundation.org
Foundation that supports social entrepreneurs through fellowship program, including through direct investments; runs Skoll Center for Social Entrepreneurship in London.

Social Enterprise Alliance
41 Peabody St., Nashville, TN 37210
615-727-8551
www.socialenterprise.us
National membership organization for social enterprises.

DOI: 10.1177/2374556815623532