Intentional Social Entrepreneurship

"The Funding Gap" explains how the concept of a social enterprise has developed over the years. While that is not the article's primary intention it still shows how the concept of a "for profit" social enterprise is much more mainstream now and how this concept has thrown a stick into the wheels of the traditional cycle of attaining funding for social sector initiatives . This concept of "for profit" social initiatives has resulted in the "funding gap" because potential investors/donors do not seem to know what they're funding as the hybrid that is social entrepreneurship is still something that has not been defined clearly in a lot of mediums even as it has become more prevalent.

Taking into account this current scenario I would like to share the model of the Acumen Fund as it seems to be the perfect blend that marries the concepts of charitable funding and funding that will be used as an investment and thus help reap eventual profits. The Acumen Fund is very active in Pakistan. Over there it has several business ventures that make use of the concept of Patient Capital. Patient Capital is the concept of using capital to start a social venture that will eventually become self sustaining and thus profitable.The important thing to note here is that the goal is to "maximize social benefit" and that making the venture profitable is simply a step that objective as if it is not a profitable venture the social benefit will not accrue to the society in the manner envisioned or at the optimal rate. This reasoning is very close to one of the explanations offered in this course only, as the difference between social and regular entrepreneurship.

Let us take the example of the Ansaar Management Company (AMC) which is low-cost housing and development company out of Pakistan that is backed by the Acumen Fund. Initially, "AMC will develop 150 commercial plots and more than 2,300 residential plots" (Acumen Fund), creating homes for nearly 30,000 people who can be grouped into the low-moderate income bracket. After a community of sorts has been built and the demand to live in the relevant area increases, the company will sell the remaining 30 percent of land at a premium. This will help ensure the company’s financial viability and sustain it in the long run. Eventually, the Ansaar Management Company  envisions itself as the market leader in providing affordable housing solutions.

In Pakistan there is a serious need for low income housing as it is under provided for by both the public and private sector. This model will help reduce slums and increase the quality of life for millions of people. It plans to start its initiative through charitable funding but eventually plans to be self sustaining by becoming profitable and thus empowering the community, thus truly following the concept of Patient Capital. To read more about this and other similar hybrid initiatives you can take a look at http://www.acumenfund.org/investment/ansaar-management-company.html.

Now that the lines between the terms of social and simple entrepreneurship have been blurred or rather in the case above merged, how can we judge the intentions of a potential "social entrepreneur". There is no doubt that in the case above there is a social benefit as a spillover effect but is it just that, a spillover effect? Or was it the primary reason with the profit being the spillover effect? The entrepreneur in this case obviously claims the former but we can never really be sure as with regard to intention. I thus think that eventually, as already mentioned in class, the term of social entrepreneur will disappear and we will only be left with entrepreneurs with both social and for profit intentions but in the end if a benefit is accruing to society, who cares about intentions?!