Two Keys to Sustainable Social Enterprise

Social entrepreneurship has emerged over the past several decades as a way to identify and bring about potentially transformative societal change. A hybrid of government intervention and pure business
entrepreneurship, social ventures can address problems that are too narrow in scope to spark legislative activism or to attract private capital.

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To succeed, these ventures must adhere to both social goals and stiff financial constraints. Typically, the aim is to benefit a specific group of people, permanently transforming their lives by altering a prevailing socioeconomic equilibrium that works to their disadvantage. Sometimes, as with environmental entrepreneurship, the benefit may be extended to a broader group once the project has provided
proof of concept. But more often the benefit’s target is an economically disadvantaged or marginalized segment of society that doesn’t have the means to transform its social or economic prospects without help.

The endeavor must also be financially sustainable. Otherwise the new socioeconomic equilibrium will require a constant flow of subsidies from taxpayers or charitable givers, which are difficult to guarantee indefinitely. To achieve sustainability, an enterprise’s costs should fall as the number of its beneficiaries rises, allowing the venture to reduce its dependence on philanthropic or governmental support as it grows.

Source: Harvard Business Review

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