An introduction to Social Entrepreneurship

Are you socially aware and creative, a thinker and doer, and posses a dogged determination to succeed? You just might be a social entrepreneur.

On March 22, 2015, Edwin M. Salonga, the Chairperson of SEDPI Group of Social Enterprises, gave an inspiring lecture on Social Entrepreneurship. He tackled the introduction and showed how it is related to migration and development. He provided some examples of successful social enterprises in the Philippines and ended with four different forms of social enterprise strategies.

Main differences between a social enterprise and traditional business

Goals and bottom line

Social entrepreneurship is the pursuit of solving economic problems using entrepreneurial principles to organize, create, and manage a business venture to achieve a desired social change. While the traditional business involves the trade of goods or services with the goal of maximizing the profit, a social enterprise (SE) revolves around the people, planet and profit. It recognizes a social problem, especially those belonging to the marginalized sector and uses innovation as well as traditional business skills to benefit our pockets as well as nurture the earth.

Ownership

A traditional business has a stockholder. They are individuals or families who capitalizes and invests in an enterprise such as fast food chains, a traditional banking system or a service oriented sole proprietorship, with the bottom line of making a financial profit. It aims to accumulate, minimize the cost of production to increase profit and enrich the stockholders.

In a social enterprise, the stakeholder is the sector, group or community usually coming from the marginalized sector. They may own or control the enterprise with the bottom line of growth and improvement of quality of life while maintaining environmental, cultural integrity and financial sustainability. An SE aims to mobilize the marginalized sector of society while redistributing profit to maximize the social benefit while taking into account the regeneration of our natural resources.

Leadership

Leadership in SEs requires heart as well as foresight. Leaders must be innovative creators and a proactive agents of change. They desire social outcomes that benefi the marginalized members of society such as the poor, women, children, elderly, physically challenged, even those perceived as outcasts such as former convicts who are reintegrating into society.

Some examples of successful SEs in the Philippines

A few successful social enterprises in the Philippines are the following*:

• Card Bank Inc. is a microfinance institution with poor women in rural areas as primary stakeholders. The bank is owned and managed by poor, landless women in the rural areas. This results in improvement in the quality of life in this sector.

• SEDPI Capital has migrants as social investors. It’s committed to educate OFWs on proper financial management, provide social investment options, and channel their remittances toward rural development.

• Good Food Co. has farmers as stakeholders whose products are bought at fair prices and delivers quality produce at less than high-end supermarket prices.

SE strategies

There are four common strategies adopted by social enterprises:

• Empowerment. By enabling the marginalized sectors to own and control their business ventures, they are able to reap maximum benefits. Cooperatives are a common example of how this strategy is executed.

• Social Inclusion. The goal is to assist those marginalized because of physical, psychological or social circumstances and to restore their dignity by creating avenues for their participation as productive members of the society. For example, the Cancer Warrior Foundation believes that no child should fight cancer alone. They raise funds to help families of poor kids with cancer get treatment and other forms of assistance.

• Intermediation. The focus is to provide products or services that directly improve the quality of life of the poor like micro finance institutions or marker-based mass housing projects. A good example is The Gawad Kalinga Community Infrastructure Program (CIP). It aims to build homes and other communal facilities through a combination of skilled paid labor and sweat equity of the GK residents themselves.

• Resource mobilization. This strategy allows a company to finance the operations of a social program through income generation from the sales of their products and services. For example, the Kanlungan Centre Foundation is able to partly finance its counselling programs for women victims of violence by selling alternative medicine.

Want to develop your own social enterprise idea?

Start by answering the following questions:

• Do you recognize a social problem?

• Can you see an opportunity in this situation?

• What are your solutions to this problem?

• Who are the potential buyers of the solution?

• How would you bring the product or services to the customer and the benefactor?

Explore the possibilities. Who knows, your idea might just help uplift and enrich the lives of many.

*Source: Slides from the lecture of Mr. Edwin Salonga

* Image attribution: Alma Gamil

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