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    Posted by Shane McQuillan 18 Jul
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    Unpacking Social Entrepreneurship

    Not all entrepreneurship is created or considered equal, depending on the kind of change you're looking to make in the world, you'll likely be diving into an industry that is exceptionally profitable, and will put you at the cutting edge of a disruptive and affluent business model.

    On the other hand, you may find yourself drawn to an issue that impacts the world closer to home, or even internationally. Those thinkers and innovators who have their mind on innovating for the social good are involved in what we would refer to more commonly as 'Social Entrepreneurship.'

    So this is a broader definition of what we mean when we use the term, but what does it entail specifically? And what kind of forms do they take? The best way to really get into it is to unpack it!

    Social Entrepreneurs - How Years Have Changed it

    One of the more popular examples of socially-minded enterprise comes from individuals like 'the father of Microcredit' - Muhammad Yunus - who introduced the concept of microcredit in order to reduce the level of feminization of debt that was occuring in Bangladesh.

    With the inclusion of new generations into the worlds of technology, investment, Fintech, blockchain, etc. We have seen a veritable explosion in companies that are invested in social entrepreneurship, or have a focus on social impact.

    For companies, this manifests as charitable activities outside of its existing business model, or even directly supporting initiatives through doing business. Latter examples include Wealthify and Nutmeg as social entrepreneurship through user investments.

    Social Entrepreneurs - the differences

    So are all socially-minded companies the same? Not necessarily, as they depend more on the entrepreneur's decisions about the structuring of the business and its underlying model. According to the likes of John Elkington and Pamela Hartigan, these kinds of businesses inhabit three different models:

    Leveraged Non-Profit:

    Through this kind of venture, entrepreneurs leverage capital from VC funds, angel investors in order to provide for a particular cause. These companies commonly manage to generate a profit, but a leveraged non-profit does not prioritize this. Instead of going to shareholders, these same profits go towards re-investing in the company.

    Hybrid Non-Profit:

    Much as the name suggests, a hybrid non-profit company is the more complex to tie down to one over-arching model. Instead, these kinds of socially-minded businesses provide for a demographic of society that is otherwise underserved by the mainstream.

    Unlike a leveraged non-profit, these businesses aren't predicated by their ability to turn a profit, but these do generate profits through selling one or more dedicated products.

    Social Business Venture:

    Much as the name would suggest, these are business ventures and socially-minded entrepreneurs who want to establish a company oriented around social development.

    These tend to be the hardest due to the fact that investors are more reluctant to get involved with social ventures because of a focus on social improvement instead of profitability.

    Do you operate a social or non-profit company? Let us know your opinion about operating as a social enterprise or non-profit company.

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