The successful social entrepreneur: A primer

Social enterprises are not typical business ventures. They are led by individuals that combine the pragmatic and results-oriented methods of a corporate type with the goals of a social reformer. Basically, being a social entrepreneur is a matter of personality. “Social entrepreneurship is a particular type,” explained Erin Fornoff from Ashoka. “It is a unique mindset and unique approach.” Social entrepreneurs like to be perceived as part of the development sector. But their strategy might differ from the practice in traditional nonprofits. Sebastian Gatica co-founded Travolution, which allows local communities in Africa, Asia and Latin America to market their products to travelers. Gatica’s approach with this venture reflects well the hybrid status of a social enterprise. “We want to be part of the economy,” he said. “We want to be competitive in selling our products and services.” Gatica continued: “But it is different from profit maximizing because our main objective is a social one. Our main objective is for communities to upgrade themselves in a sustainable way.” Ashoka founder Bill Drayton has been credited with coining the concept of social entrepreneurship. According to him, everyone can be a social entrepreneur, or a change maker. But becoming one may not be that plain sailing. Similar to Ashoka, Echoing Green created a fellowship program to provide financial and professional help to social entrepreneurs in running their projects. But to become a fellow, each applicant must go through a difficult selection process and respond to a certain number of criteria such as being innovative, creative and self-motivated, and having an ethical fiber. Here are some keys to success for budding social entrepreneurs. Be entirely committed to your cause. Social entrepreneurship is a new approach, so it can be difficult to convince people of the concept’s worth and potential for success. “You hear a lot about the social entrepreneurs who work late into the night with a laptop in their living room and have to hear the word ‘no’ over and over again,” Fornoff said. That is why when selecting potential fellows, Echoing Green asks candidates to make a full-time commitment to their organization’s development and expects them to resign from their previous job in order to do so. Social entrepreneurs thus need to really believe in their project and be strongly self-motivated. “It is yourself waking up in the morning and writing a proposal,” said Gaurav Manchanda, founder of One Degree Solar, which provides cheap and easy-to-use solar equipment for health and education sectors in resource-limited areas. “You don’t have somebody telling you what to do.” Be grounded in the targeted communities from the start. Usually, social entrepreneurs have had an intense involvement with the communities that their projects aim to help. Gatica, for instance, had the idea of Travolution following his experience with non-governmental organizations working with marginalized communities and analyzing their lack of market accessibility. Similarly, Manchanda worked for two years in Liberia’s Ministry of Health, evaluating medical equipment before having the idea of One Degree Solar. Such an experience made him acquainted with the Liberian context, and it gave him a very precise idea of the problems faced by the health sector, notably in terms of equipment. Social enterprises must be built with the existing socioeconomic structures and communities in mind. This is what Elizabeth Dearborn Davis did with Project Akilah in Rwanda. The project provides young women with the skills and training to find meaningful employment so as to lift themselves and their families from poverty. Before starting the project in 2007, Davis had been working in Rwanda for a year. She spent several months doing research, talking to institutions and business leaders to figure out where exactly to focus the training on. Thanks to preliminary work, she realized that the tourism industry was the fastest-growing sector in the country, but there was a huge gap in human capital there. “If our fundamental goal is jobs, we have to make sure that we are listening to the employers and actually training people for them and not training them on the basis of principles or skills that we think are important, but ones that are actually relevant,” Davis explained. Getting the communities involved in guiding, designing and implementing the project is also a way to make sure that it will be sustainable. Knowing all the complexities of a community allow the entrepreneur to be more flexible when situations change. Also, such an approach creates a sense of ownership for communities, allowing them to take over the project at one point - and this is what genuine sustainable development is about. Partner with local authorities. At the very least, social entrepreneurs should know the priorities of ministries and sectors where their project falls under, such as health, tourism, or education. “The more we can fit into their short-term and long-term plans, the better it is,” Manchanda said. This way, resources are used more efficiently, and duplication of efforts can also be avoided. But in case the objectives of a social enterprise are incompatible with those of local authorities, partnering would be counterproductive. Approach investors and clients with strong arguments. When seeking funding, it is important to have a strong argument to present to investors or clients. If a project is already running, social entrepreneurs must have hard data and numbers showing that the project is working well. Through One Degree Solar, Manchanda sells solar-powered equipment to NGOs and governments. Providing hard data is a way for his clients to know that they are getting a return on their investment. He explained: “We want to continue creating monitoring tools with the implementing partners so we can track benefits that are important to their programs. For example, we’ve provided solar lights to community health workers, and the tools track how many more patients they see each day, how many hours they work with the light each night, and whether the health outcomes would have been different if the patient had to walk to the clinic the next morning.” Aside from providing hard data, having specific strategy and clearly defined outcomes, as well as the ability to measure outcomes and prove success would be helpful. But if the project is just starting, testimonies, commentary and involvement from beneficiaries would be essential. Be a true entrepreneur. Social entrepreneurs need to have grounding in proper business practices. It is important to know how to read a balance sheet as well as manage cash flow and payroll if the enterprise is generating income. Such can be a challenge for people who have only been working in social services. “We had fellows who got training for that because they don’t have a business background,” Fornoff said. “It is vital, especially if the social enterprise begins with a staff of one person.” Learning those skills can also help social enterprises find a business model that can offer them financial sustainability, and make them less dependent on donor funding should they opt to be for-profit. “Our aim is to be 100 percent sustainable by generating our own income,” Gatica said. “Through selling packages of these community-based tourism initiatives, we are taking a small percentage. Through this commission, there is a revenue model that allows us to pay all the cost for having a staff.” Read more career advice articles.