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If you have answered ‘yes’ to at least two of thosequestions, chances are that you are not a socialentrepreneur.

But before you put down this issue of Alliance becauseyou have decided it obviously has nothing to do withyou, we want to assure you that very few people are so-cial entrepreneurs. Indeed, a world populated bysocial entrepreneurs alone would be as unbalancedas one filled only with public servants or corporatesector representatives. What is important is to be ableto recognize social entrepreneurs, and the vital in-novative and transformative role that they play, andensure that they are fully supported by other sectors.

Social entrepreneurship an overviewPamela Hartigan and Jeroo Billimoria

We’d like to jump headlong into the discussion on social

entrepreneurship by asking you, the reader, five questions:

�Do you regularly take at least three weeks’ holiday a year?

�Do you give any thought to what you will do when you retire,

looking longingly at the time when you will no longer have to

be in the o÷ce from nine to five – or often much later?

�Does the thought of not having a regular monthly pay cheque

drive you to the medicine cabinet in search of a tranquillizer?

�Do you need to feel that your friends and co-workers approve

of what you are doing?

�Do you spend any less than 24 hours a day obsessing over

new ways to transform society?

This issue of Alliance will explore what it means to bea social entrepreneur from the point of view of itsleading proponents and practitioners. Persistentchallenges for social entrepreneurship will beexamined, including how best to scale up innova-tions and assess impact without losing the vision, aswell as how to work effectively with other majorstakeholders and potential supporters, includinggovernments, business, multilateral and bilateralorganizations, foundations and high net worth indi-viduals. What is the role of education and the mediain social entrepreneurship? What systems and ser-vices must be created to provide the kind of financialand other supports social entrepreneurs need?

Prior to delving into these issues, we need to definewhat we are talking about, for as social entrepre-neurship has become a generalized ‘buzzword’, it issuffering from the ‘five blind men and the elephant’syndrome (see box opposite). Because it is a relativelynew field, people tend to base their definitions ofsocial entrepreneurship on subjective and relativelylimited experience rather than on a broad base ofempirically derived knowledge and, to a certainextent, that’s what we’re doing. In that sense, we, too,suffer from the ‘elephant syndrome’. Nevertheless,and in all humility, we would suggest the followingdescription of a social entrepreneur – and conversely,

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Alliance Volume 10 Number 1 March 2005

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offer our ideas on where confusion over its definitionmight partly lie.

What a social entrepreneur is . . .

A social entrepreneur identifies practical solutions tosocial problems by combining innovation, resource-fulness and opportunity. Committed to producingsocial value, these entrepreneurs identify newprocesses, services and products, or unique ways ofcombining proven practice with innovation to ad-dress complex social problems. Whether the focus oftheir work is on enterprise development, health, ed-ucation, environment, labour conditions or humanrights, social entrepreneurs are people who seize onthe problems created by change as opportunities totransform societies.

The organizations set up by social entrepreneurs defypigeonholing. They cannot be lumped easily into thenon-profit or for-profit worlds that we cling to. In-creasingly, social entrepreneurs are setting up theirorganizations as for-profit entities, though most arestill constituted as not-for-profits. The point is thatthe legal form chosen for the entity is simply a strate-gic decision based on how best to achieve the mission.They don’t shun existing economic models, but mostsocial entrepreneurs are pragmatic about the limita-tions of market economics and persistent aboutfinding ways to use markets to empower the poor.Most experiment with and perfect business modelsthat allow the poor to have access to the wide varietyof technologies that the more fortunate among ustake for granted – from information communica-tions technology and health care to ways of ensuringgood housing, clean water, access to energy, decentwages, relevant education and so on.

Social entrepreneurs undertake both public andprivate sector functions simultaneously. On the onehand, they work with people that governments havebeen unable to reach effectively with basic publicgoods and services. On the other, they address market

failures by providing access to private goods andservices to markets where business does not operatebecause the risks are too great and the financialrewards too few. With little market reward or assis-tance, social entrepreneurs are reshaping thearchitecture for building sustainable and peacefulsocieties.

Social entrepreneurs are the ultimate scenario plan-ners of our time. They see desirable futures in presentconditions, and act to bring them about, generally inspite of efforts to persuade them to the contrary. Theyare disrupters and activists who challenge the notionof incremental, continuous improvement. Social en-trepreneurs don’t believe in more of the same, andthey appear to relish what keeps the rest of us awakeat night – uncertainty and risk.

. . . and what a social entrepreneur is not

Social entrepreneurs aren’t just founders of socialenterprises. While some social enterprises are cre-ated by social entrepreneurs, not all of them are. Theterm social enterprise emerged recently with refer-ence to non-profit organizations seeking new anddifferent ways to generate the funds they need tooperate. Now social enterprises are being created bygovernments to catalyse community renewal andprovide excluded groups with income-generatingopportunities. The vast majority of social enterprisesfocus on the delivery of goods and services. Socialtransformation and system change are not theirprimary drivers, as with social entrepreneurs.

This may seem like a superfluous distinction but itisn’t. There is a marked difference between a socialentrepreneur and a manager of a social enterprise.While the latter is essential for the smooth runningof the operation, the former is a mover and a shaker,the motor of social transformation.

Nor are they business entrepreneurs. However, thetwo are sometimes confused, so it’s useful to drawsome distinctions. For a start, social entrepreneursare committed to social value creation, so finance is ameans to an end for them, never the end in itself.Personal reward, risk and cost become secondary con-cerns; and they typically take little for themselves.They display innovation, resourcefulness and practi-cality just like business entrepreneurs, but theirproducts, services, clients and business methods aredictated by the needs of underserved markets andstakeholders. They are often more comfortable withthe unconventional than with the conventional in

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Alliance Volume 10 Number 1 March 2005

FIVE BLIND MEN AND THE ELEPHANT – AN INDIAN FOLK TALE

Five blind men wanted to find out what an elephant was. They had one

brought to them. Surrounding the elephant, each blind man reached up

to touch it. The first blind man grabbed the elephant’s trunk. He said,

‘Aha! So an elephant is like a snake.’ The second blind man, holding one

of the elephant’s legs, said, ‘Oh, no, it’s like a tree trunk.’ The third

grabbed the elephant’s ear and said, ‘How can you say that? An elephant

is clearly like a fan.’ The fourth, clutching the animal’s tail, said, ‘No, no,

no! The elephant is like a rope.’ The fifth, climbing up the side of the

elephant, said, ‘You’re all wrong! The elephant resembles a small hill.’

Pamela Hartigan is theManaging Director and a Board Member of theSchwab Foundation forSocial Entrepreneurship, a Geneva-basedorganization dedicated to improving the state ofthe world though socialentrepreneurship. She can be contacted atPamela.Hartigan@schwabfound.org

Jeroo Billimoria is asocial entrepreneur, andfounder of numeroustransformationalinitiatives includingChildline India and ChildHelpline International.She can be contacted atjeroo@childhelplineinternational.org

Guest editors for the special Alliancefeature on ‘Socialentrepreneurship – its promise and itschallenges’

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reaching beyond the limits of the marketplace toserve the needy.

By virtue of their social mission, social entrepreneursare often thrown into the same pot with other orga-nizations in the citizen sector, those referred to by themisnomer ‘NGO’. But here again a distinction needsto be made. Social entrepreneurs are practical andfocused on outcomes rather than process, whilemany in the citizen sector are wedded to the latter.Moreover, social entrepreneurs tend to shun ideolog-ical positions as they prevent one from spotting theopportunities for transformational social change.Nor do they embrace charitable models that aim toalleviate suffering and address social issues withoutchanging the conditions that gave rise to that suffer-ing. Social entrepreneurs seek transformation of thestatus quo.

To get some idea of what these distinctions mean inpractice, if you were to combine a Mother Teresa witha Richard Branson, you’d be getting close to a socialentrepreneur – a Fazle Abed, for example, or one of the other accomplished social entrepreneursfeatured in this issue.

The benefits of working with social

entrepreneurs

The greatest challenge for social entrepreneurs lies inpersuading all other actors to reinforce and supportthem. Neither governments, businesses, multilateraland bilateral institutions, foundations, philan-thropists, and academia nor the civil sector have yetcaught up with this emerging field, and they toooften stand in its way.

Yet all these groups stand to gain tremendously fromstimulating and supporting social entrepreneurship.And social entrepreneurs need them. In fact, socialentrepreneurs will be the first to say that alone theycannot undertake their critical work of social andeconomic change. They need the support of imagi-native, compassionate and talented people from allsectors who can help social entrepreneurship live upto its promise.

The public sector

Government has a critical role to play in supportingsocial entrepreneurs, as we will see in the article bySheela Patel of SPARC in India (see p24). However, withfew exceptions, governments and government bodieshave yet to recognize social entrepreneurship as alegitimate field of endeavour. This recognition iscrucial if governments are to provide a better fiscaland legislative environment for social entrepreneurs,including the review of tax laws and the eliminationof burdensome regulations, arbitrary decision-making and other requirements and practices thathamper them. More often than not, social entrepre-neurs find themselves shunning collaboration withgovernments for reasons ranging from corruption to inefficiency and indifference on the part of gov-ernment bureaucrats. Where government-socialentrepreneur collaboration has been effective, thebenefits have been manifold for both, but suchexamples are rare.

Companies

Increasingly, companies are beginning to appreciatethe merits of working with social entrepreneurs,mainly for three reasons, all related to competitive-ness. � From a financial perspective, reaching untapped

markets can be greatly facilitated by workingwith social entrepreneurs who have spentdecades designing, implementing and refininginnovative ways of bringing previously excludedgroups into the marketplace.

� Increasingly, companies are discovering thatconsumers expect them to pay some heed to thesocial effects of their operation. Companies arediscovering that they can ‘outsource’ the socialinnovation element to social entrepreneurs inthe same way they have done with productinnovation and business entrepreneurs.

� From a human resources perspective, the abilityto attract top talent is a major challenge forcompanies. But the best and brightest today are looking for more than impressive salariesand stock options. They want something thatgives meaning to their work and their lives.Supporting social entrepreneurs in differentways shows that companies care about morethan the bottom line.

Foundations and philanthropists

These are best placed to support social innovators, asthey are free of the voting booth and the financial

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+ =

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bottom line, the forces that dominate the decisions ofgovernment and business respectively. But too manyfoundations and philanthropists seem content tofund demonstration projects that they hope will pro-duce dramatic results in a very limited time. This isunrealistic, misplaced and costly. As so many suc-cessful social entrepreneurs can vouch, it often takesyears before their idea takes shapeinto a viable and scalable solution.Even then, the approach must beconstantly modified to respond tounforeseen obstacles or dynamicsalong the way. This issue’s articleon ‘Learning from mistakes’ (seep35) highlights how every obstacleencountered by the social entre-preneur means modifying the ideaor the way it is implemented.

A social entrepreneur continu-ously adapts. As Ela BhattMiraiChatterjee, founder member of the ground-breakingSelf-Employed Women’s Association (SEWA) in India,put it, ‘The biggest thing we have learned after 30years of existence is that there are no definite victo-ries or defeats. The most important thing is to keep ongoing.’ Foundations need to rethink their focus onsupporting demonstration projects. They can havemuch greater impact by scaling up demonstrably suc-cessful social innovations initiated and implementedby social entrepreneurs. The wheel does not need tobe reinvented, just adapted to travel in new terrain.

Multilateral and bilateral development

organizations

It is evident that multilateral and bilateral develop-ment organizations, to a greater or lesser degree,have all increased their collaboration with non-stateactors, including social entrepreneurs. Much of thischange has occurred in the last decade in response togeneral calls for reform to make these organizationsbetter equipped to respond to the challenges of the21st century. In particular, strong criticism has beenmade of those multilateral institutions responsiblefor finance, development and trade for their failure toconsult civil society and interest groups on theirpolicies. Some institutions have responded by devot-ing time and energy to dialogue with non-stateactors. But more needs to be done.

We are in an interesting phase of new thinking andexperimentation, and these institutions have a vitaland catalytic role. They should make it a priority to

spot and legitimize social entrepreneurs who havethe capacity to imagine and the ability to implementwhat they imagine through disciplined innovation.In this issue, Andrea Coleman of Riders for Health(see p25) and Victoria Hale of OneWorld Health (seep27) describe their ups and downs working with UNorganizations to illustrate the benefits and difficul-ties inherent in such partnerships.

Academia

Finally, the academic sector has a key role to play infostering social entrepreneurship and advancingknowledge about it (see Rowena Young’s article onp30). Important strides have been made, particularlyat university level, but we have barely begun to instillentrepreneurial thinking in younger students. Andwhile we all know that entrepreneurship is notsomething to be learned out of a book, it must becultivated. The entrepreneurial mindset has beendescribed in terms of the following characteristics:commitment and determination; leadership; obses-sion with opportunity; tolerance of risk, ambiguityand uncertainty; creativity; self-reliance; ability toadapt; and motivation to excel. Primary and sec-ondary schools across the globe should be supportedin their efforts to develop a curriculum that instillsthese characteristics in future global citizens,whether they become social entrepreneurs or not.

Summing up

Perhaps the most important qualities of social entre-preneurs are courage and resilience. Their courageallows them to champion a cause and to take risksothers wouldn’t dare to take. Their resilience enablesthem to endure the obstacles and setbacks along theway to achieving transformational social change foras many as possible, as soon as possible.

We cannot expect the systems and structures thatcreated the problems we face to come up with solu-tions to those problems. Too many of us have livedwithin those systems for too long, blinding us toother possibilities. As historian Barbara Tuckmannoted, men and woman ‘. . .will not believe what doesnot fit in with their plans or suit their prearrange-ments’. Social entrepreneurs, with their hybridapproaches derived from inspired pragmatism, canwork with any and all sectors, offering new and verydifferent approaches to what many of us say we wantto do – change the world. @

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Alliance Volume 10 Number 1 March 2005

Foundations need to

rethink their focus on

supporting demonstration

projects. They can have

much greater impact by

scaling up demonstrably

successful social

innovations.