The forms social enterprises can take and the industries they operate in are so many and various that it has always been a challenge to define, find and count social enterprises. In 2009 Social Traders partnered with the Australian Centre for Philanthropy and Nonprofit Studies (ACPNS) at Queensland University of Technology to define social enterprise and, for the first time in Australia, to identify and map the social enterprise sector: its scope, its variety of forms, its reasons for trading, its financial dimensions, and the individuals and communities social enterprises aim to benefit.

This Finding Australia’s Social Enterprise Sector project produced its final report in June 2010. The project was led by Associate Professor Jo Barraket, Australia’s leading social enterprise academic.

One of the key features of this Australian research is its intention to define social enterprise in a way that was informed by and made sense to those working in or with social enterprises.

The research design therefore included workshops to explore and test what social enterprise managers, researchers, and relevant policy makers meant by the term ‘social enterprise’. This was the resulting definition:

Social enterprises are organisations that:

1. Are led by an economic, social, cultural, or environmental mission consistent with a public or community benefit;
2. Trade to fulfil their mission;
3. Derive a substantial portion of their income from trade; and
4. Reinvest the majority of their profit/surplus in the fulfilment of their mission.

[edit]In North America

[edit]The United States

The Social Enterprise Alliance (SEA) of the United States defines a “social enterprise” as “an organization or venture that advances its primary social or environmental mission using business methods.”^[16]

In the U.S, two distinct characteristics differentiate social enterprises from other types of businesses, nonprofits, and government agencies:

1. Social enterprises directly address social needs through their products and services or through the numbers of disadvantaged people they employ. This distinguishes them from “socially responsible businesses,” which create positive social change indirectly through the practice of corporate social responsibility (e.g., creating and implementing aphilanthropic foundation; paying equitable wages to their employees; using environmentally friendly raw materials; providing volunteers to help with community projects).
2. Social enterprises use earned revenue strategies to pursue a double or triple bottom line, either alone (as a social sector business, in either the private or the nonprofit sector) or as a significant part of a nonprofit’s mixed revenue stream that also includes charitable contributions and public sector subsidies. This distinguishes them from traditional nonprofits, which rely primarily on philanthropic and government support.

In the United States, “social enterprise” is also distinct from “social entrepreneurship,” which broadly encompasses such diverse players as B Corp companies, socially responsible investors, “for-benefit” ventures, Fourth Sector organizations, CSR efforts by major corporations, “social innovators” and others. All these types of entities grapple with social needs in a variety of ways, but unless they directly address social needs through their products or services or the numbers of disadvantaged people they employ, they do not qualify as social enterprises.

In Asia

Hong Kong

There is no separate legal entity for social enterprises in Hong Kong. They are normally registered as companies or non-profit organisations. The Hong Kong Government defines social enterprises as businesses that achieve specific social objectives and its profits will be principally reinvested in the business for the social objectives that it pursues, rather than distribution to its shareholders.  In recent years, venture philanthropy organizations, such as Social Ventures Hong Kong, have been set up to invest in viable social enterprises with a significant social impact.

India

In India, a social enterprise may be a non-profit Non-governmental organization (NGO), often registered as a Society under Indian Societies Registration Act, 1860, a Trust registered under various Indian State Trust Acts or a Section 25 Company registered under Indian Companies Act, 1956.  India has around 1-2 million NGOs, including number of religious organizations, religious trust, like Temples, Mosque and Gurudwara associations etc., who are not deemed as social enterprises.

A social enterprise in India is primarily NGOs, who raise funds through some services (often fund raising events and community activities) and occasionally products. Despite this, in India the term, Social Enterprise is not widely used, instead terms like NGOs and NPOs (Non-profit organizations) are used, where these kind of organizations are legally allowed to raise fund for non-business activities. Child Rights and You and Youth United, are such examples of social enterprise, who raise funds through their services, fund raising activities (organizing events, donations, and grants) or sometimes products, to further their social and environmental goals.

However, there are social businesses with an aim for making profit, although the primary aim is to alleviate poverty through a sustainable business model. An example is Pipal Tree Ventures Private Limited, which trains rural youth in various construction and infrastructure related skills and has found a way for rural youth to get out of poverty. The company also provides placements to the trained manpower to various infrastructure industries in India, thereby creating an end-to-end sustainable business model.

In the agriculture sector, International Development Enterprises has helped pull millions of small farmers out of poverty in India Paul Polak, details the story in his book, “Out of Poverty”

Another area of social enterprise in India and the developing world is bottom of the pyramid (BOP) Bottom of the pyramid businesses which was identified and analyzed by CK Prahahalad C. K. Prahalad in “Fortune at the Base of the Pyramid” This seminal work has been a springboard for a robust area of both innovation and academic research.

Malaysia

The Malaysian Social Enterprise Alliance (SEA) defines social enterprises as “organizations created to address social problems that use business models to sustain themselves financially. Social enterprises seek to create not only financial returns but also social returns to their beneficiaries.”  The Alliance regards social enterprises as businesses with a social focus, distinct from non-profit organisations.

In Europe

The best established European research network in the field, EMES, works with a more articulated definition – a Weberian ’ideal type‘ rather than a prescriptive definition – which relies on nine fuzzy criteria:

Economic criteria:

1. continuous activity of the production and/or sale of goods and services (rather than predominantly advisory or grant-giving functions).

2. a high level of autonomy: social enterprises are created voluntarily by groups of citizens and are managed by them, and not directly or indirectly by public authorities or private companies, even if they may benefit from grants and donations. Their shareholders have the right to participate (‘voice’) and to leave the organisation (‘exit’).

3. a significant economic risk: the financial viability of social enterprises depends on the efforts of their members, who have the responsibility of ensuring adequate financial resources, unlike most public institutions.

4. social enterprises’ activities require a minimum number of paid workers, although, like traditional non-profit organisations, social enterprises may combine financial and non-financial resources, voluntary and paid work.

Social criteria:

5. an explicit aim of community benefit: one of the principal aims of social enterprises is to serve the community or a specific group of people. To the same end, they also promote a sense of social responsibility at local level.

6. citizen initiative: social enterprises are the result of collective dynamics involving people belonging to a community or to a group that shares a certain need or aim. They must maintain this dimension in one form or another.

7. decision making not based on capital ownership: this generally means the principle of ‘one member, one vote’, or at least a voting power not based on capital shares. Although capital owners in social enterprises play an important role, decision-making rights are shared with other shareholders.

8. participatory character, involving those affected by the activity: the users of social enterprises’ services are represented and participate in their structures. In many cases one of the objectives is to strengthen democracy at local level through economic activity.

9. limited distribution of profit: social enterprises include organisations that totally prohibit profit distribution as well as organisations such as co-operatives, which may distribute their profit only to a limited degree, thus avoiding profit maximising behaviour.

Ongoing research work characterises social enterprises as often having multiple objectives, multiple stakeholders and multiple sources of funding. However their objectives tend to fall into three categories:

• integration of disadvantaged people through work (work integration social enterprises or WISEs)
• provision of social, community and environmental services
• ethical trading such as fair trade

Despite, and sometimes in contradiction to, such academic work, the term social enterprise is being picked up and used in different ways in various European countries:

Czech Republic

In the Czech Republic a working party stemming from the development partnerships in the EQUAL programme agreed on the following distinctions (April 2008):

Social economy

It is a complex of autonomous private activities realized by different types of organizations that have the aim to serve their members or local community first of all by doing business. The social economy is oriented on solving issues of unemployment, social coherence and local development. It is created and developed on the base of concept of triple bottom line – economic, social and environmental benefits. Social economy enables citizens to get involved actively in the regional development. Making profit/surplus is desirable, however is not a primary goal. Contingent profit is used in preference for development of activities of organization and for the needs of local community. Internal relations in the social enterprises are headed to the maximum involvement of members/employees in decision-making and self-management while external relations strengthen social capital. Legal form of social economy entities is not decisive – what is crucial is observing public benefit aims as listed in the articles. Subjects of the social economy are social enterprises and organizations supporting their work in the areas of education, consulting and financing.

Social entrepreneurship

Social entrepreneurship develops independent business activities and is active on the market in order to solve issues of employment, social coherence and local development. Its activities support solidarity, social inclusion and growth of social capital mainly on local level with the maximum respect of sustainable development.

Social enterprise

Social enterprise means “a subject of social entrepreneurship”, i.e. legal entity or its part or a natural person which fulfils principles of the social enterprise; social enterprise must have appropriate trade license.

The above mentioned definitions stem from the four basic principles which should be followed by all social enterprises. Standards with a commentary were settled for each principle. These standards were settled as the minimum so that they should be observed by all legal entities and all types of social enterprises. Specific types of enterprises, that are undergoing pilot verification within CIP EQUAL projects and that are already functioning in the Czech Republic, are social firms employing seriously disadvantaged target groups, and municipal social cooperatives as a suitable form of entrepreneurship with the view of development of local communities and microregions.

The legal form a social enterprise takes is not important, however they must be subject of private law. According to the existing legal system, they can function in a form of cooperatives, civic associations, public benefit associations, church legal entities, Ltd., stock companies and sole traders. Budgetary organizations and municipalities should not be social enterprises as they are not autonomous – they are parts of public administration.

Social entrepreneurship is defined very broadly. Beside employment of the people disadvantaged at the labour market it also includes organizations providing public benefit services in the area of social inclusion and local development including environmental activities, individuals from the disadvantaged groups active in business and also complementary activities of NGOs destined to reinvest profit into the main public benefit activity of an organization. Social entrepreneurship defined in such a wide way should not be directly bound to legal benefits and financial support because the concept of social entrepreneurship might be then threatened by misuse and disintegration. Conditions of eventual legal and financial support should be discussed by experts.

Finland

In Finland a law was passed in 2004 that defines a social enterprise as being any sort of enterprise that is entered on the relevant register and at least 30% of whose employees are disabled or long-term unemployed. As of March 2007, 91 such enterprises had been registered, the largest with 50 employees. In the UK the more specific term “social firm” is used to distinguish such “integration enterprises”;

Italy

Italy passed a law in 2005 on imprese sociali, to which the government has given form and definition by Legislative Decree, 24 March 2006, no. 155 Under Italian law a social enterprise is a private entity that provides social utility goods and services, acting for the common interest and not for profit. The first general aspect that has to be highlighted is that a social enterprise is neither a new legal form, nor a new type of organization, but a legal category in which all eligible organizations may be included, regardless of their internal organizational structure. Therefore, the eligible organizations could in theory be cooperatives (i.e. employee-, producer-, or customer-owned firms), investor-owned firms (i.e. business corporations), or traditional nonprofit organizations (i.e. associations and foundations). This is the so-called principle of “neutrality of the legal forms” adopted by the Italian law. Hence, social enterprise is like a legal “brand” that all eligible organizations can obtain and use in the marketplace. The requirements are: – being a private organization; – performing an entrepreneurial activity of production of social utility goods and services (The Law prescribes that this must be the main activity, that is, it has to account for at least 70% of the total income of the organization); – acting for the common interest and not for profit. In order to be defined as a social enterprise, an organization needs to simultaneously possess all these attributes.

In an effort to develop social enterprises and measure social impact, the Italian governmental work placement agency - Italia Lavoro - has developed a method to calculate the social efficiency of their project, from an economic point of view. For example, they measure the economic value to the society of providing a job to a disabled person. Since 1997, Italia Lavoro provides work placements to people with mental, social, physical or health disadvantages. To this aim, they help people who have fallen out of the general work system to reintegrate society through the creation of small and medium non-profit enterprises.

Also intended to generate more social enterprises is the non-profit cooperative Make a Change. Make a Change provides financial, operational and management support to social start-ups. In 2010 they organized the first edition of a contest to elect the “Social entrepreneur of the year”, as well as another contest entitled “The World’s Most Beautiful Job”. This year winner of the former was the social cooperative “Cauto”, which manages the whole trash life-cycle in the province of Brescia. Cauto’s workforce is composed by 1/3 of disabled and disadvantaged individuals.

Winner of the “World’s Most Beautiful Job” prize was the project “Tavern of the Good and Bad” by the group Domus de luna from Cagliari. The tavern employs mums and children who just exited rehabilitation programs. The prize consisted of a financial aid of 30.000 euro and 12 months of professional consulting and support. The prize-giving ceremony was included in the program of the Global Entrepreneurship Week.

United Kingdom

In the UK the accepted Government-backed definition of social enterprise used by the UK social enterprise sector bodies such as Social Enterprise UK comes from the 2002 Department for Trade and Industry’s ‘Social Enterprise: a strategy for success’ report as:

A business with primarily social objectives whose surpluses are principally reinvested for that purpose.

The original use of the term social enterprise was first developed by Freer Spreckley in 1978, and later included in a publication called Social Audit – A Management Tool for Co-operative Working published in 1981 by Beechwood College. In the original publication the term social enterprise was developed to describe an organisation that uses Social Audit. Freer went on to describe a social enterprise as:

An enterprise that is owned by those who work in it and/or reside in a given locality, is governed by registered social as well as commercial aims and objectives and run co-operatively may be termed a social enterprise. Traditionally, ‘capital hires labour’ with the overriding emphasis on making a ‘profit’ over and above any benefit either to the business itself or the workforce. Contrasted to this is the social enterprise where ‘labour hires capital’ with the emphasis on social, environmental and financial benefit.

Later on the three areas of social, environmental and financial benefits used for measuring social enterprise became known as the Triple Bottom Line.

Twenty years later Freer Spreckley and Cliff Southcombe established the first specialist support organisation in the UK Social Enterprise Partnership Ltd. in March 1997.

In the British context, social enterprises include community enterprises, credit unions, trading arms of charities, employee-owned businesses, co-operatives, development trusts,housing associations, social firms, and leisure trusts.

Whereas conventional businesses distribute their profit among shareholders, in social enterprises the surplus tends to go towards one or more social aims which the business has – for example education for the poor, vocational training for disabled people, environmental issues or for animal rights.

Social enterprises are distinct from charities (although charities are also increasingly looking at ways of maximising income from trading), and from private sector companies with policies on corporate social responsibility. An emerging view, however, is that social enterprise is a particular type of trading activity that sometimes gives rise to distinct organisation forms reflecting a commitment to social cause working with stakeholders from more than one sector of the economy

The first agency in the UK - Social Enterprise London (SEL) – was established in 1998 after collaboration between co-operative businesses (Poptel, Computercraft Ltd, Calverts Press, Artzone), a number of co-operative development agencies (CDAs), and infrastructure bodies supporting co-operative enterprise development (Co-operative Training London, Co-operative Party, London ICOM, Co-operatives UK). SEL’s first chief executive, Jonathan Bland, brought experience from Valencia where a business support infrastructure for co-operative enterprise was established using learning from the Mondragon region of Spain.  SEL did more than provide support to emerging businesses. It created a community of interest by working with the London Development Agency (LDA) to establish both an undergraduate degree in social enterprise at the University of East London (led by Jon Griffith) and a Social Enterprise Journal (now managed by Liverpool John Moores University and published by Emerald Publishing). Allison Ogden-Newton took over from Jonathan Bland as Chief Executive of Social Enterprise London in 2004. Under her leadership the organisation built a network of over 2,000 social enterprises and social entrepreneurs, directly brokered over 500 social enterprise jobs under the DWP’s Future Jobs Fund and delivers consultancy and business support across the world in countries including Vietnam, Korea and Croatia.

In 2002, The National Council for Voluntary Organisations (NCVO) established the Sustainable Funding Project. Using funds from FutureBuilders, Centrica and Charity Bank, this project promoted the concept of sustainability through trading to voluntary groups and charities.  From 2005 onwards, NCVO began using the term social enterprise to refer to voluntary sector trading activities..

In 2002, the British government launched a unified Social Enterprise Strategy, and established a Social Enterprise Unit (SEnU) to co-ordinate its implementation in England and Wales, primarily to consult on a new type of company to support social enterprise development. After a consultation (see CIC below), policy development was increasingly influenced by organisations in the conventional “non-profit” sector rather than those with their origins in employee-ownership and co-operative sectors. The 2003 DTI report on the consultation shows the disproportion influence of charitable trusts and umbrella organisations in the voluntary sector, and evidence now exists that the voice of progressive employee-owned organisations were marginalised in the course of producing the report.

The Social Enterprise Unit was initially established within the Department of Trade and Industry (DTI), and in 2006 became part of the newly created Office of the Third Sector, under the wing of the Cabinet Office.

Following broad consultation, SEnU adopted a broader definition which is independent of any legal model. This latitudinarian definition could include not only companies limited by guarantee, and industrial and provident societies but also companies limited by shares, unincorporated associations, partnerships and sole traders.

A survey conducted for the SEnU in 2004 found that there were 15,000 social enterprises in the UK (counting only those that are incorporated as companies limited by guarantee or industrial and provident societies). This is 1.2% of all enterprises in the UK. They employ 450,000 people, of whom two-thirds are full-time, plus a further 300,000 volunteers. Their combined annual turnover is £18 billion, and the median turnover is £285,000. Of this, 84% is from trading. In 2006, the government revised this estimate upwards to 55,000, based on a survey of a sample of owners of businesses with employees, which found that 5% of them define themselves as social enterprises.  The most up to date estimates suggest that there are approximately 62,000 social enterprises in the UK, contributing £24 billion to the UK economy.

These estimates, however, are questioned by Dr Rory Ridley-Duff and Mike Bull who draw attention to work by the EU Commission to define and study the European social economy.  Using the EU definition of social economy, the annual contribution of social enterpises to the UK econony is four times larger at £98 billion because it includes the contribution of all co-operatives, mutuals and associations that produce goods or services to improve human well-being.

Branding In February 2010 the new Social Enterprise Mark was launched. Like the Fair Trade brand, the Social Enterprise Mark aims to increase the visibility of socially motivated businesses. More than this, the mark represents the growing commercial identity of social enterprises and a deliberate attempt to carve out a recognisable niche for such organisations in the business community. Qualification for the mark requires that a business conform to set criteria, e.g. companies must earn at least 50% of their income from trade and spend at least 50% of their profits on socially beneficial purposes.  The mark has been received with mixed responses in some corners with practitioner suggestions that the qualifying criteria are not strict enough or are too strict for employee-owned social enterprises, worker co-operatives and innovative share companies.

Scotland

In Scotland, social enterprise is a devolved function and is part of the remit of the Scottish Government.  Activities are co-ordinated by the Scottish Social Enterprise Coalition, and intellectual leadership is provided by the Social Enterprise Institute at Herriot-Watt University (Edinburgh), established under the directorship of Declan Jones. Senscot based inEdinburgh supports social entrepreneurs through a variety of activities including a weekly email bulletin by co-founder Lawrence Demarco.  The Social Enterprise Academy ”deliver leadership, enterprise, and social impact programmes” throughout Scotland and further support is provided by Development Trusts Association Scotland and Co-operative Development Scotland.

Examples

Some well known social enterprises in the UK include John Lewis, Welsh Water, Cafédirect, The Eden Project, Divine Chocolate (Kuapa Kokoo), The Big Issue, the Co-operative Group,HCT Group, Duchy Originals, and the London Symphony Orchestra.

Three common characteristics of social enterprises as defined by Social Enterprise London are:

1. Enterprise orientation: They are directly involved in producing goods or providing services to a market. They seek to be viable trading organisations, with an operating surplus.
2. Social Aims: They have explicit social aims such as job creation, training or the provision of local services. They have ethical values including a commitment to local capacity building, and they are accountable to their members and the wider community for their social environmental and economic impact.
3. Social ownership: They are autonomous organisations with governance and ownership structures based on participation by stakeholder groups (users or clients, local community groups etc.) or by trustees. Profits are distributed as profit sharing to stakeholders or used for the benefit of the community.

The UK has also developed a new legal form called the community interest company (CIC). CICs are a new type of limited company designed specifically for those wishing to operate for the benefit of the community rather than for the benefit of the owners of the company. This means that a CIC cannot be formed or used solely for the personal gain of a particular person, or group of people. Legislation caps the level of dividends payable at 35% of profits and returns to individuals are capped at 4% above the bank base rate.

CICs can be limited by shares, or by guarantee, and will have a statutory “asset lock” to prevent the assets and profits being distributed, except as permitted by legislation. This ensures the assets and profits are retained within the CIC for community purposes, or transferred to another asset-locked organisation, such as another CIC or charity.

A CIC cannot be formed to support political activities and a company that is a charity cannot be a CIC, unless it gives up its charitable status. However, a charity may apply to register a CIC as a subsidiary company.

The national body for the social enterprise movement in Britain is the Social Enterprise Coalition (SEC) and this liaises with similar groups in each region of England, and in Northern Ireland, Scotland & Wales. The definition of social enterprise propagated by the SEC is slightly broader than the original DTI definition and acknowledged that the social purpose of an organisation can be “embedded in its structure and governance”. As such, social businesses that adopt inclusive governance structures and employee-ownership are brought fully into the fold of the movement.

Social firms

Another example of a type of social enterprise is the social firm, a business set up specifically to create employment for people otherwise severely disadvantaged in the labour market.

Advantages of social enterprise

Rodney Schwartz of ClearlySo listed a number of advantages of the social enterprise as a business:

• ability to raise capital at below market rates due to the ethical investment industry
• easier access to publicity
• labour costs below average, “as staff seems willing to work for below market rates in support of the values of social enterprises.”

Schwartz described social entrepreneurs as extraordinarily innovative, deploying models that seem to derive results out of thin air.

In Africa

Ghana

The registered non-profit Trashy Bags was launched in 2007 in order to increase public awareness of Ghana’s solid plastic waste problem and clean up sachets from the streets of Accra. This company buys waste from collectors. After washing and drying the sachets, it sews them into fashionable bags and other products which are then sold in Accra and exported to eight other countries around the world. The Trashy Bags Company has collected 20 million plastic sachets since its founding, and employs 60 machinists.

Kenya

In Kenya many NGOs, use business models to improve lives of people mainly in rural Kenya. An example of this is KOMAZA a non-profit social enterprise that plants trees with small holder farmers and uses economies of scale to enable them to access high value markets for processed trees. Another example of this is RISE Kenya that runs projects to mitigate climate change in the semi arid Eastern Province of Kenya. They also run weaving projects whereby women who would traditionally engage in weaving make products that are marketed in the capital city Nairobi and in overseas markets of Europe and America.

Other development oriented social enterprises in Kenya include the One Acre Fund, Nuru International and Alive & Kicking, which has produced over 200,000 sports balls from its stitching centre in Nairobi.  Kenya’s social enterprises include M-Pesa, which facilitated economic transactions via mobile phone.

Social enterprise in Kenya has grown to include spaces with IT infrastructure such as internet connectivity and computer hardware. Two of these, the iHub and NaiLab, are centers for technological enterprise, with ventures such as Tandaa in coopperation with the ICT Board of Kenya and Akirachix.

Zambia

As in much of Africa, social enterprises in Zambia are often focused on the creation of sustainable employment. Alive & Kicking established a stitching centre in Lusaka in 2007, which employs 50 stitchers and produces 2,000 sports balls a month.   Zambikes produces a range of bicycles from their Lusaka factory, including ones made from bamboo and ‘Zambulances’, and provide three levels of mechanic training.

Awards

There are several awards that recognize and reward social enterprises.

The Enterprising Solutions Award is the UK’s national award for social enterprise. Run by the Social Enterprise Coalition in partnership with the Office of the Third Sector in the Cabinet office and the Community Banking branch of the RBS Group, the awards recognize the work undertaken by many organizations within the social enterprise movement.

The Edge Upstarts Awards are run annually by the New Statesman in the UK.

The Asia Social Innovation Award is the first Asia-wide annual competition that asks for simple ideas that can solve social issues common in Asian cities, such as an ageing population, poverty and environmental sustainability.

The Hong Kong Social Enterprise Challenge is the first and the only inter-collegiate social ventures business competition in Hong Kong.

Fast Company has a yearly ranking of top 15 to 25 noteworthy social enterprises called the Social Capitalist Awards which highlights noteworthy organizations in social innovation (2004 to 2010).

There are several business schools which offer social entrepreneurship business plants.

In addition, several organizations offer fellowships like Ashoka, Acumen Fund, and Echoing Green all three of which are quite competitive. Still other organizations offer accelerator and mentorship programs like the Unreasonable Institute.

• Susan B. Anthony (U.S.) – Fought for women’s rights in the United States, including the right to control property, and helped spearhead adoption of the 19th amendment.

• Vinoba Bhave (India) – Founder and leader of the Land Gift Movement, he caused the redistribution of more than 7,000,000 acres (28,000 km²) of land to aid India’s untouchables and landless. Mahatma Gandhi described him as his mentor.

• David Brower (U.S.) – Environmentalist and conservationist, he served as the Sierra Club’s first executive director and built it into a worldwide network for environmental issues. He also founded Friends of the Earth, the League of Conservation Voters and The Earth Island Institute.

• Akhtar Hameed Khan (Pakistan) – Founder of grassroots movement for rural communities Comilla Model, and low-cost sanitation programmes (Orangi Pilot Project) for squatter settlements.

• Maria Montessori (Italy) – Developed the Montessori approach to early childhood education.

• John Muir (U.S.) – Naturalist and conservationist, he established the National Park System and helped found The Sierra Club.

• Florence Nightingale (UK) – Founder of modern nursing, she established the first school for nurses and fought to improve hospital conditions.

• Frederick Law Olmsted (U.S.) – Creator of major urban parks, including Rock Creek Park in Washington DC, Central Park in NYC, and Mount Royal Park in Montreal, he is generally considered to have developed the profession of landscape architecture in America.

• Gifford Pinchot (U.S.) – Champion of the forest as a multiple use environment, he helped found the Yale School of Forestry and created the U.S. Forest Service, serving as its first chief.

• Friedrich Wilhelm Raiffeisen (Germany) – Pioneer of the rural bond of association as a substitute for collateral in microfinance, and a principal founder of the credit union andcooperative bank sectors that now form a major segment of the European banking system.

• Margaret Sanger (U.S.) – Founder of the Planned Parenthood Federation of America, she led the movement for family planning efforts around the world.

• John Woolman (U.S.) – Led U.S. Quakers to voluntarily emancipate all their slaves between 1758 and 1800, his work also influenced the British Society of Friends, a major force behind the British decision to ban slaveholding. Quakers, of course, became a major force in the U.S. abolitionist movement as well as a key part of the infrastructure of the Underground Railroad.

Among the firms that deploy social venture capital include

• Acumen Fund
• Grassroots Business Fund
• Triodos Bank
• Venturesome Fund
• Aavishkaar
• Omidyar Network
• Shell Foundation
• Gray Ghost Ventures and First Light Ventures
• RSF Social Finance
• LGT Venture Philanthropy
• Calvert Group
• Investors’ Circle: Investors’ Circle matches social entrepreneurs with its circle of angel investors.
• Root Capital^[2]

Social venture capital is a form of venture philanthropy and impact investing. Organizations providing services to the SVC sector include I-DEV International^[3] (management strategy, business scaling, portfolio improvement, and exit strategy) to GIIRS^[4], which is an initiative sponsored by the Rockefeller Foundation and others to create standardized metrics by which to compare social investment performance and criteria. Further service providing services are Aspen Network of Development Entrepreneurs (ANDE) and the European Venture Philanthropy Association (EVPA), an association that covers venture philanthropy funds in Europe that finance charities, revenue generating social enterprises and socially driven business. These growing services are indications of the SVC sectors’ increasing popularity and development. While many of the first round of SVC funds established, did so with a largely non-profit, socially oriented focus (vs. one focused on profitable returns and long-term success), funds are beginning to increasingly recognize and put weight on the importance of exit strategy, ROI (financial Return on Investment) and SROI (Social Return on Investment), which includes conducting greater due diligence into investments and supporting capacity building or technical training for portfolio company management.

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In the UK in 2002 seven leading nonprofit organisations established UnLtd - The Foundation for Social Entrepreneurs. It holds a £100 million endowment especially to invest in social entrepreneurs in the UK. UnLtd provides individuals with cash awards and practical support that includes coaching, training, and networking opportunities to help develop community projects. UnLtd Ventures is the in-house consultancy division of UnLtd and focuses on a number of outstanding social entrepreneurs, providing them with business support and helping them to scale up or replicate their organisations or get investment ready. Another of their operations, UnLtd Research, is becoming the world’s primary source of evidence and thinking around social entrepreneurship. Its central purpose is to lead the global business, public policy, and academic debates about the role of social entrepreneurship in community regeneration, employment, and growth strategies.

The George Foundation‘s Women’s Empowerment program empowers women by providing education, cooperative farming, vocational training, savings planning, and business development. In 2006 the cooperative farming program, Baldev Farms, was the second largest banana grower in South India with 250 acres (1.0 km²) under cultivation.^[16] Profits from the farm are used for improving the economic status of the workers and for running the other charitable activities of the foundation.^[16]

Some have created for-profit and for-a-difference organizations. A recent example is Vikram Akula, the McKinsey alumnus who started a microlending venture, SKS Microfinance, in villages of Indian state of Andhra Pradesh. Although this venture is for profit, it has initiated a sharp social change amongst poor women from villages. A great example is the activity of Brent Freeman [1], Norma LaRosa [2], and Nick Reder [3] the co-founders of Roozt.com [4] a new e-commerce site in the United States that connects online shoppers with socially responsible, social entrepreneur vendors through a daily deal format. Each customer’s purchase also donates to a monthly cause. This online shopping site aims to empower everyday online shoppers to make a difference in the world through everyday purchases and is committed to providing double bottom line value with every sale.

There are continuing arguments over precisely who counts as a social entrepreneur. The lack of consensus on the definition of social entrepreneurship means that other disciplines are often confused with and mistakenly associated with social entrepreneurship. Philanthropists, social activists, environmentalists, and other socially-oriented practitioners are referred to as social entrepreneurs. It is important to set the function of social entrepreneurship apart from other socially oriented activities and identify the boundaries within which social entrepreneurs operate^[17]. Some have advocated restricting the term to founders of organizations that primarily rely on earned income – meaning income earned directly from paying consumers. Others have extended this to include contracted work for public authorities, while still others include grants and donations. This argument is unlikely to be resolved soon. Peter Drucker, for example, once wrote that there was nothing so entrepreneurial as creating a new university: yet in most developed countries the majority of university funding comes from the state.

Organizations such as Ashoka: Innovators for the Public, the Skoll Foundation, the Omidyar Network, the Schwab Foundation for Social Entrepreneurship, Athgo, Root Cause, theCanadian Social Entrepreneurship Foundation, NESsT, New Profit Inc., National Social Entrepreneurship Forum, and Echoing Green among others, focus on highlighting these hidden change-makers who are scattered throughout the world. Ashoka’s Changemakers “open sourcing social solutions” initiative Changemakers uses an online platform for what it calls collaborative competitions to build communities of practice around pressing issues.

The North American organizations tend to have a strongly individualistic stance focused on a handful of exceptional leaders, while others in Asia and Europe emphasize more how social entrepreneurs work within teams, networks, and movements for change. The Skoll Foundation, created by eBay’s first president, Jeff Skoll, makes capacity-building “mezzanine level” grants to social entrepreneurial organizations that already have reached a certain level of impact, connects them through the annual Skoll World Forum and Social Edge, the Foundation’s online community, and highlights their work through partnerships with the Sundance Institute, Frontline World, NewsHour with Jim Lehrer, and other film and broadcast outlets. Skoll also supports the field of social entrepreneurship, including through Skoll’s founding of the Skoll Centre for Social Entrepreneurship at the Said Business School at Oxford University. Examples of social entrepreneurial business in the USA include NIKA Water Company, which sells bottled water in the USA and uses 100% of its profits to bring clean water to those in the developing world, as well as Newman’s Own which donates 100% of its profits to support various educational charities.

Youth social entrepreneurship is an increasingly common approach to engaging youth voice in solving social problems. Youth organizations and programs promote these efforts through a variety of incentives to young people.^[18] One such program is Young Social Pioneers, which invests in the power and promise of Australia’s young leaders. The program, which is an initiative of The Foundation for Young Australians, strengthens, supports and celebrates the role of young people in creating positive change in their communities. About Face International [5] has a program that promotes youth social entrepreneurship amongst middle school, high school, and college students by providing interest-free loans, grants, and mentorship. They also help middle schools, high schools, and colleges form youth social entrepreneurship after-school clubs on site. Roozt’s [6] business model parallels such an approach by “paying it forward” with their commitment to help educate today’s youth about the fundamentals of socially responsible businesses so that they may become progressive leaders of tomorrow. National Social Entrepreneurship Forum, founded by Yashveer Singh^[19] is support organisation for promoting social entrepreneurship amongst Indian Universities and youth.

Istanbul Bilgi Üniversity launched the BİLGİ Young Social Entrepreneur Awards project in May 2010 to identify, educate, and provide financial support for young social entrepreneurs in Turkey. Cooperating with International Youth Foundation, Sylvan/Laureate Foundation and TEGV, through this comprehensive strategy, İstanbul Bilgi University seeks to contribute to the development of a new generation of socially conscious citizens leading change in their communities.

Another youth social entrepreneurship organization is rooted in Turkey, the organization named SOGLA [7] (The Academy of Young Social Entrepreneurs). SOGLA provides young entrepreneur candidates (named SOGLA pioneers) with a high quality of education,and supports pioneers to develop, start-up, and sustain their social entrepreneurship projects.

Fast Company Magazine annually publishes a list of the twenty-five best social entrepreneurs, which the magazine defines as organizations “using the disciplines of the corporate world to tackle daunting social problems.”^[20] In 2009, BusinessWeek followed suit, publishing a review of America’s twenty-five most promising social entrepreneurs, defined as “enterprising individuals who apply business practices to solving societal problems.”^[21]

The internet and social networking websites have been pivotal resources for the success and collaboration of many Social Entrepreneurs. These media allow ideas to be heard by broader audiences, help networks and investors to develop globally, and achieve their goals with little or no start-up capital. For example, starting with no capital and just an interesting idea, three Australian students (1egg1world) are in the process of raising AUS$1million for Charity starting out with just one egg, an excellent example of the growing opportunities brought by the internet to people with good ideas.^[22] The US-based nonprofit Zidisha leverages the recent spread of internet and mobile technologies in developing technologies to provide an eBay-style microlending platform where disadvantaged individuals in developing countries can interact directly with individual “peer-to-peer” lenders worldwide, sourcing small business loans at lower cost than has ever before been possible in most developing countries.^[23]

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Social entrepreneurs can be found all over the world, in most industries, and where the need is the most pressing. Here are a few examples:

• Istvan Aba-Horvath: Based in Hungary, Istvan’s mission is to aid Gypsy children in getting an education and simultaneously earn money.http://www.romacentrum.hu/kozhaz/debrecen
• Raul Oscar Abasolo Trincado: Raul lives in Chile and works with poor, outcast youth in his country. He has provided an opportunity for them to become meaningful and productive members of society.
• Mohammed Bah Abba: Mohammed has “resurrected” a form of pottery that was originally used in ancient Egypt. This pottery has allowed his people to keep their food fresh in the harsh climate of Nigeria.
• Abbass Abbass: Abbass started AlManarah in 2005, an organization centered in Israel. His mission is to stop discrimination against disabled people in his country.
• Rafael Alvarez: Rafael’s goal is to help American youth extend their outlook beyond graduation from high school, to highly skilled jobs by training students with the skills they need to do so. He accomplishes this goal through his organization, Genesys Works. http://www.genesysworks.org/
• Anita Ahuja: In India, Anita has addressed problems of waste, sanitation, and unemployment into a social entrepreneurial organization. Her business produces high-end accessories, such as wallets and purses, out of plastic waste. http://www.conserveindia.org/
• Manish Sankla: In India, Manish has been igniting youths by creating “consciousness” amongst young minds about their social responsibilities towards the wider community through Health, Education and Social activities. http://www.yuvaignitedminds.com/

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