The Four Critical Elements of Social Entrepreneurship

by Jeffrey A. Robinson, Ph.D. (@jrobinson on Twitter)

I have taught about social entrepreneurship all around the world.  One of the questions that many people ask is, what makes a social entrepreneur a social entrepreneur?  My answer has four parts and here they are – I call them the four elements of social entrepreneurship - social impact, social innovation, sustainability and measurement.  I ask key questions related to each of these elements below and provide 

The Four Elements of Social Entrepreneurship

Social Impact. 

Key Question: What social impact does the business or organization make on society?

Social impact is a key element of a social venture.    What is the issue or problem that the business or organization is being set up to solve? A social venture can make impact at different levels (for example: community, local, regional, national) or with varying degrees of depth.   How a social venture makes the impact and where it wants to make the impacts are important strategic decisions. 

Social Innovation.

Key Question:  Is the venture using a new (or improved) approach to addressing the social and/or environmental issue?

Social ventures break new ground, pioneer new approaches, or develop new models.  These ventures need to creatively navigate the economic, social, and institutional barriers to addressing the social need.  Social entrepreneurs develop new approaches to addressing social problems or utilize technology to facilitate problem solving. 

Sustainability.

Key Questions:  Is this venture financially viable?  Is this venture positioned to fulfill its mission over the long-term?

A sustainable social venture is financially viable and positioned to fulfill its mission over the long-term.  Many social ventures are not sustainable because they rely upon unstable grant-making or government institutions for their funding. Alternatively, earned-income or fee-for-service business model are generally more effective strategies for social ventures.  Some social ventures are not sustainable because they have not organized their internal resources effectively to fulfill their mission.  How a social venture marshals its resources to be sustainable is an important strategic decision that often separates traditional non-profit organizations  and NGOs from social entrepreneurship.

Measurement.

Key Questions: How does this venture measure its social impact and evaluate success?  Are the measurement tools appropriate for the social issue?

Measurement and evaluation are essential to social entrepreneurship. In addition to the financial metrics used by traditional ventures, social ventures must measure their impact and evaluate its effectiveness.  There are many ways to gather and evaluate the social impact of a venture.  The key is that the social venture is using an appropriate type of measurement tool that is in line with their theory of change.

It is these four elements that lead to all-star social entrepreneurship and highly effective social ventures.  The best social entrepreneurs in the world fully understand how to bring these four elements into their social ventures as they launch and grow their ventures.  This is how I organize my social entrepreneurship course (which I am teach at Rutgers Business School this semester) and all of my workshops, seminars and training. It is a powerful framework for helping new and existing social ventures find and keep the entrepreneurial edge and redefine the game for their stakeholders.