Social Entrepreneurship:
Just a Trend, or is it the Future of Business?

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This past week I had the opportunity to return to United Nations Headquarters and speak at the 56th Comission on Sustainable Development.

Wearing several hats for my panel topics, my objectives was three fold: increasing opportunities for youth, women in tech, and social entrepreneurship to be contribute to policy, and initiatives that advance the UN Sustainable Development Goals (SDGs).

One of my panel topics was: ‘Social entrepreneurship for the SDGs through block-chain and crypto-currency’ – a session hosted in partnership with United Nations Industrial Development Organization (UNIDO) and United Nations Department of Economic and Social Affairs (UNDESA).

What is Social Entrepreneurship?

Social entrepreneurship is growing in popularity and is increasingly seen on conference agendas across industries. Despite its prevalence, the definition of social entrepreneurship still lacks understanding among most, and continues to be misunderstood. Part of the confusion could be a result of the plethora of terms thrown around the sector; social entrepreneurship, social enterprise, social venture, B-Corporation, for-purpose companies, are used interchangeably.

The Knowledge Gap

This knowledge gap became particularly apparent to me when speaking with a fellow young social entrepreneur. Despite the fact that his product had a social purpose and was helping improve the health of children, when I referenced his business as a social enterprise, he replied “we are not a charity.”

Sadly, this exchange wasn’t the first time a social enterprise has been confused with a charity. However, it was the first time I had heard this confusion come from a social entrepreneur their self.

This incident opened up two larger questions to me...

How many more social entrepreneurs believe social enterprise and charity are the same, and where is the discrepancy coming from?

To answer these questions, we must look at the evolution of both the nonprofit and private sectors. Traditionally, these were isolated sectors whereby your company was on one side of the equation or the other. Over the last few decades, however, the line between the two has started to blur.

A saturated nonprofit sector, combined with the recession and economic strife, has made fundraising more competitive than ever before. In order to be sustainable and keep their doors open, many charities and nonprofit organizations need to seek other means of raising money beyond donations and sponsorships. Like any business that needs to increase cashflow, many organizations are starting to develop products and create new community services that operate independent of traditional donations.

As nonprofit/charities adopt an entrepreneurial mindset and work to create new revenue streams, the importance of community purpose and entrepreneurial thinking is growing in tandem within the private sector. Corporate social responsibility (CSR) has been a part of the private sector for a long time, but it’s only within these last few decades that businesses have started to prioritize and invest in purpose-driven initiatives. This shift in perspective can be attributed in part, by the Millennial generation’s desire for businesses to be concerned with more than just profit. In fact, aside from job security Lovell Corporation’s 2017 Change Generation Report reveals that Ethics and Sustainability is the top high impact retention factor for Millennials.

Responding to these trends, small-medium enterprises and Fortune 500 companies alike are taking time to explore creative ways to use their resources to solve social challenges and develop a stronger employer brand with purpose.

What is the Value of Brand Purpose and Impact in for the Future of Work?

As more businesses align their human capital resources for the greater good of our planet, and nonprofit organizations continue to become more strategic in their business operations, will we see a convergence? As it stands, a social enterprise has its own category; characterized as a venture that uses its resources to solve social challenges and includes social impact in its performance evaluation.

Rather than just a business trend, could social entrepreneurship instead be a preface to the future of business as a whole?

My prediction is, within the next decade both social entrepreneurship and corporate social responsibility will dissolve. @kellyalovell

We are moving towards a future where purpose is no longer an option for business, and the shift to sustainable business is already in effect.

Unilever, one of the world’s largest consumer goods company, disbanded their CSR department in 2016, instead opting to embed sustainability in every corner of the business.  From revenue generation and consumer loyalty to recruitment and employee retention, impact is proving its place on the bottom line.

At the helm of this shift however, is the next generation of business owners and entrepreneurs. Exhibited by my encounter with the above-mentioned young social entrepreneur, in the eyes of many Millennials and Generation Z entrepreneurs, brand purpose and sustainability is innate to business. The purpose of a business is to solve a problem, so why not solve a problem that benefits the lives of people or the planet in the process?

young leader working

As a young entrepreneur myself, I can attest to this mindset. Despite founding several social enterprises, when I started I did not consciously choose to make it so. In fact, I didn’t even set out to build a business at all. For me, it all started with a desire to solve a problem that I saw in my community and make a difference. Business, and the services I created, simply gave me a means to take action and solve the problem I was passionate about.

I have witnessed similar motivations among the many Millennial influencers and young entrepreneurs I work with. More examples can be found  in The Power of YOUth book, where I collected the stories of 200 young leaders around the world. While many in the book may not consider themselves as social entrepreneurs, each one of them has created an organization to solve a problem or community challenge that is meaningful to them. Purpose is integral part of their operations, both in the development of their solutions, and in the measurement of their success.

So where does that leave us? What do you think?

Will social entrepreneurship, remain a distinct category, or will it become the future of all business?

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About the Author

Kelly Lovell is the founder and CEO of Lovell Corporation. She is globally recognized for her expertise, particularly on engaging Millennials and Generation Z More