SOCIAL ENTREPRENEURSHIP

Social Entrepreneurship

Social Entrepreneurship

Introduction

How can new and existing non-profits develop and deliver more innovative programs and services to benefit their constituencies? How can nonprofit managers keep their organizations vibrant and relevant to their communities? The answer is through constant entrepreneurship. Nonprofit (or social) entrepreneurship is a powerful process that creates social benefits. As such, social entrepreneurship has the potential to fuel major contributions to society by helping non-profits harness innovation and creativity and bring these more effectively to bear on social issues. As social needs increase in scope and complexity, social entrepreneurship is becoming increasingly important. In recognition of this, American presidents over the last 30 years have acknowledged the important role that nonprofit organizations play in finding creative solutions to social problems.

The Need for Entrepreneurship

Nonprofit organizations today need to cope with rapid change. The external environments of organizations are becoming increasingly complex, turbulent, and unpredictable (Morris, Kuratco, & Covin, 2008; Wei-Skillern, Austin, Leonard, & Stevenson, 2007). Some of the factors at work in these environments include the following:

Economic environment—unpredictable prices, costs, exchange rates, tax incentives, business cycles

Social environment—increases in poverty, shrinking middle class, changes in family and community structures, new solutions to social problems needed

Resource environment—increasing resource scarcity, shifting and decreased government funding, donations flat, increasing number of non-profits

Customer environment—more demanding and complex customers/clients, more competition

Competitive environment—boundaries between sectors blurring, increased for-profit involvement in social ventures, new models of service delivery

Legal and regulatory environment—more aggressive regulation, growing compliance costs, increased scrutiny from government

Global environment—needs, resources, and organizations globally interconnected, rapid global changes, communication and partnerships needed

Literature Review

These environments can present significant challenges for nonprofit organizations, but they also create meaningful opportunities for those that can cope. Several organizational characteristics are crucial for nonprofit survival in modern environments. Non-profits need to be adaptable to adjust to change. They need to be flexible to design strategies, processes, and operational approaches that can meet diverse and evolving requirements. They need to be able to respond quickly to emerging opportunities. In addition, a proactive approach to competition and customers is needed. Finally, they need to be continuously innovative, giving priority to developing and launching new products, services, processes, markets, and technologies. These attributes are all embodied in entrepreneurship. New and existing non-profits that adopt an entrepreneurial outlook and the structures to support it are better positioned to survive and thrive in 21st-century environments. We turn now to the examination of how non-profits can do this.

A number of characteristics of entrepreneurs have been identified. Much research remains to be done to establish which, if any, might stimulate entrepreneurship alone or in combination and what the relative role of environmental or demographic factors might be. Bygrave (2004, p. 6) provides a list of characteristics that includes: having a vision of the future, making and implementing decisions quickly, being determined and devoted to the venture, paying attention to details, and wanting to be in charge of their destiny.

A number of characteristics of entrepreneurs have been identified. Much research remains to be done to establish which, if ...