In recent times, social entrepreneurship has become an active force in the world; an agent of change that leads to innovative solutions to unmet social issues. Many social enterprises work in fields and industries that are under-represented, and with people who have restricted access to resources. By and large, these entrepreneurs are here to help society and, in the process, help themselves too.
Social entrepreneurs are a unique breed. They’re able to come up with creative ideas and test new approaches, often showing a knack for out-of-the-box thinking that leads to better and more cost-effective outcomes. In most cases, their designs look simple on the surface, but they address deep-rooted issues in society. Fiyaz Mughal, founder of Faith Matters and the national hate crime monitoring project Tell MAMA, understands the profound impact a social enterprise can have on an issue in society. His campaign against hate crime has led to more public awareness about these offences and the busting of myths associated with different races.
The realm of social enterprises has not been left to innovative, young minds only. Increasingly, established organisations are also looking to address the environmental and social challenges that surround them.
Taking this route provides some key benefits that are highlighted below:
- Financial Independence
Typically, the organisations that have addressed social issues have been non-profit entities that have relied on grants and charitable donations to operate. Social enterprises are steadily changing this narrative by becoming independent entities that have control over funding and how it is used. The profits gained from the business can sustain operations and supplement donations and grants.
- Introducing Solutions
Sometimes, despite the best efforts of non-profit organisations, generous individuals or governments, innovative solutions can be hard to find. Given the challenges that come with innovation, social entrepreneurs can be a valuable source of ideas and testing of new theories and approaches that address fundamental problems.
One example of this in action is the growth of microfinance in the developing world. Small entrepreneurs who had difficulty accessing credit from established banks found answers from microcredit agencies set up to lend for shorter durations and educate borrowers on how to maximise funding.
- Employment Opportunities
Social enterprises offer people the chance to become their own bosses and pursue work they are passionate about. Many social entrepreneurs are zealous about solving problems, with their enthusiasm a critical factor in the growth and success of their enterprises. Additionally, these entrepreneurs become job providers to many others who share their passion. In doing so, they benefit the economy by generating income and funding ideas that are a boon to society.
- Better Use of Resources
While problem-solving remains a key focus for social enterprises, financial sustainability comes a close second. In situations where social entrepreneurs work together with governments, they make use of existing and new resources to meet their goals. Often, this means cost-effective ways of implementing solutions, which can be an advantage to formal institutions seeking to reduce the financial burden.
- Increased Attention
Social enterprises devoted to tackling a social problem can find it easy to market and promote their work to the community and media. In the same vein, it is also simpler to gain the support of like-minded organisations and individuals because of the social aspect. This ability to garner support and attention can aid the faster adoption of the solution while increasing the enterprise’s reach.
The innovative solutions brought on board by social enterprises help address pressing societal issues such as mental health, energy efficiency, illiteracy and drug abuse. Some of these approaches can be translated to the public sector, in some cases even leading to change in government policy.
Why Invest in Social Enterprises?
Many investors are open to supporting a social enterprise but may feel skittish about committing their financial resources. Does an enterprise whose focus is social good have what it takes to succeed in a competitive and dynamic business environment? This is the probable question on their minds.
Of course, social businesses have their challenges, but they are transforming the way business is conducted. Aside from supporting a social enterprise’s goals, investors can put be persuaded by the following reasons:
- Expansion Into New Markets. Many social enterprises are beginning to cross borders and become successful in new geographic locations within their home country and even overseas.
- A good number of social enterprises in the UK have been around for a while. According to a survey conducted by Social Enterprise UK, half of the companies polled had been in operation longer than six years, with about 20 percent operating longer than 20 years.
- Social enterprises are at the forefront of promoting workplace diversity, with many of them open to having female executives and leaders from minority ethnic groups. This diversity isn’t just an important statistic but also reinforces the notion that businesses with diverse managements tend to perform better.