This week’s reading Creating Successful Business Models, Lessons from Social Entrepreneurship was a useful resource for thinking about different structures within our definition of social enterprise. Those differences seemed to focus on the revenue generation piece, which is always a contentious topic when discussing social innovation or enterprise. To add fuel to the fire, I came across an article (supported by research) that found social enterprises focus too much on making a profit instead of maximizing its programming within the community. However, the research was focused on 700 social service organizations in New York County, and most, if not all, of these organizations have separate profit-maximizing ventures unrelated to their mission. After reading the article, I almost felt compelled to comment that social enterprises must have their social mission and revenue generation mission linked as one, and that a non-profit that opens a coffee shop should not be considered a social enterprise (according to our class definition).
As I then read some of the comments related to the article, I noticed that Jerr Boschee, Executive Director of the Institute for Social Entrepreneurs and past Director of CMU’s Institute for Social Innovation, found this article to be just as flawed as I suspected. Although Mr. Boschee argues that in order to be a social enterprise “products and/or services provided by the enterprise must DIRECTLY address social needs”, the head researcher Rebecca Tekula, Executive Director of the Helene and Grant Wilson Center for Social Entrepreneurship, continues to disagree. Tekula’s definition is “external social enterprises are often unrelated to mission; their business activities are not required to advance the organization's mission other than by generating income for its social programs or overhead.”
While this heated online discussion is interesting to read, what is more fascinating is the fact that two “experts” within the social innovation and enterprise space could differ so much in how they define their sector! I wonder what the consequences of this confusion will be for the sector? How do you think the lack of a concrete definition will affect the success of social enterprises? As the reading stated, Model 3 social business ventures have not yet proven to replicate like traditional business ventures. Instead maybe their purpose is to inspire (Negroponte!). What do you think is more powerful: replication or inspiration? Is a globally agreed upon definition of social enterprise necessary for the sector to flourish?
Interesting post. I must point out that the quote I offered was from Virtue Venture's Kim Alter, in her Social Enterprise Typology, which has become an oft-used guide for practitioners and academics alike.
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