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What are Socially Entrepreneurial Organizations?

By Dana Hagenbuch, courtesy of Commongood Careers

The language of the social sector is changing, and terms like social enterprise, corporate social responsibility, and social entrepreneurship are being spoken everywhere from nonprofit board meetings to business school classrooms.

There is a growing momentum in the sector to approach social problems through "entrepreneurism," essentially a blend of innovation, business-like pragmatism, and relentless passion. The result of this movement is a new wave of entrepreneurial organizations that are rapidly scaling sustainable models of social change in visionary ways.

In the business world, an entrepreneur is someone with the vision and leadership to identify a market need and respond with a new product or service, ultimately intending to make a profit from the venture. Similar principles are true of social entrepreneurs, with the key differences being that: (1) their work addresses a societal need, such as illiteracy; and (2) they primarily measure results in social impact value, such as increased literacy rates, as opposed to profitability.

How can a nonprofit be business-minded and entrepreneurial, you ask? Isn't that an oxymoron? Not at all! A common myth about the nonprofit sector is that organizations are run by a bunch of do-gooders who disdain business practices. This could not be further from the truth. There are literally thousands of organizations today that are applying entrepreneurial methods to social causes.

Revolutionizing the Fishing Industry

When you start digging into what is (and isn't) social entrepreneurism, your head may start to spin. One of the most universal definitions of social entrepreneurism is offered by Ashoka, a global association of social entrepreneurs:

"Social entrepreneurs recognize when a part of society is stuck and provide new ways to get it unstuck. They find what is not working, change the system, spread the solution and persuade entire societies to take new leaps. Social entrepreneurs are not content just to give a fish or teach how to fish. They will not rest until they have revolutionized the fishing industry."

To apply this definition beyond an individual, socially entrepreneurial organizations:

  • Deliver a powerful model for social change;
  • Grow and develop at an ambitious pace;
  • Leverage management best practices, borrowing from all sectors;
  • Value knowledge highly and take a creative approach to hiring talent;
  • Are often incorporated as nonprofits, but also include some truly socially driven for-profits.

To find great examples of some of the nation's leading socially entrepreneurial organizations, visit Fast Company's Social Capitalist Awards, Ashoka, Echoing Green, New Profit Inc, and Draper Richards.

It's important to point out a distinction between social entrepreneurism and a few other trends, namely social enterprise and corporate social responsibility. A social enterprise is typically defined as a nonprofit that self-generates revenue from a business operation (as opposed to receiving funding from charitable donations) and directs those funds towards a social cause. A few examples are a homeless shelter running a thrift shop or an employment agency that places disabled people into jobs. Corporate social responsibility is defined by a private company making a commitment to behave ethically and contribute to economic development while improving the quality of life of the community. Examples include corporate foundations, "greening" of businesses, and in-kind product donation programs.

Is a Socially Entrepreneurial Organization for You?

There are unique challenges and benefits to working at a socially entrepreneurial organization. Fast-paced, dynamic cultures can result in difficulties around "work/life balance" and higher "burn-out" rates. In an entrepreneurial culture, business models and strategic plans can sometimes be hastily implemented without the required expertise or resources.

For individuals motivated to work in the sector, however, such organizations provide stimulating and rewarding environments for young professionals. Collaborative work cultures comprised of like-minded, mission-driven colleagues can inspire personal fulfillment and satisfy a drive to positively impact society. Other benefits include salary levels (e.g. higher than traditional nonprofit positions and competitive with private sector jobs) and accelerated career paths. Flatter hierarchies and small senior teams result in faster career trajectories and earlier access to strategic roles.

The opportunities at socially entrepreneurial organizations await for professionals eager to think big, roll up their sleeves, and create impact in revolutionary ways. If you possess that rare combination of passion, business know-how, and big ideas, a career at a socially entrepreneurial organization may be for you.

Dana Hagenbuch is Director of Communications at Commongood Careers. Founded and staffed by nonprofit professionals, Commongood Careers connects jobseekers to opportunities at the nation's most effective social enterprises and nonprofits.
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