How Social Enterprise Differs from the Rest

Social entrepreneurship blends the brains of a businessman with the heart of a humanitarian in order to create sustainable business models designed to drive positive social change.

1. Traditional Business:

How is social entrepreneurship different from traditional business? 

Traditional business prioritizes the Profit Motive, while social entrepreneurship priotizes the Purpose Motive.

Traditional businesses are designed to prioritize the profit motive. But this singular focus can often mutate into “profit at all costs”, which has come at a very high cost. It also perpetuates the concept of the “Cog Economy”, where people operate as cogs in corporate machinery, sacrificing their dreams, their health, and their sanity, in exchange for a paycheck. 

Social enterprises, on the other hand, prioritize The Purpose Motive. They don’t neglect the role of profit, but it views profit as a tool, not a goal. A means to an end and by no means itself. And rather than operating as corporate cogs, people are encouraged to lean into their empathy, creativity, and humanity, in order to create real solutions to systemic problems.

2. Regular Entrepreneurship:

How is Social entrepreneurship different from regular entrepreneurship? 

Regular entrepreneurship focuses exclusively on economic agency, while social entrepreneurship includes positive social, systemic, or environmental change.

Regular Entrepreneurship focuses primarily on creating economic agency - or your ability to generate income and financial independence outside the scope of corporate structures. But it does not inherently require that the business model creates any social solutions or address environmental issues.

Social entrepreneurship begins with a social or environmental problem it wants to solve, and then builds a sustainable business model around solving it. So the social, systemic, or environmental issue is the centerpiece of the business model, not a tax write off, or afterthought. It is integral to the business, and the revenue generating piece is simply a means to that end.

3. Activism:

How is social entrepreneurship different from activism?

Activism demands third-party action, while social entrepreneurship takes direct action.

Activism brings attention to certain issues, and demands change from the powers that be. But it does not always offer a practical method or strategy for that change to occur. So even if the powers that be agree that there is a problem, they don’t necessarily know how to practically implement that change and will not necessarily take the time to figure it out.

Social entrepreneurship not only brings attention to certain issues, but simultaneously provides a practical alternative to address those problems. Not only do they create the change they want to see, but they serve as a model and a blueprint for what’s possible.

4. Social Responsibility:

How is social entrepreneurship different from Social Responsibility?

Social responsibility implies basic ethics, while social entrepreneurship applies redemptive action.

Social Responsibility refers to the basic ethical obligations an organization has to society and the environment. It considers the social or environmental impact of its actions on its stakeholders, not purely on its profits to shareholders. It may donate portions of its profits to a cause, but does not necessarily make that cause the centerpiece of its business models.

On the other hand, Social entrepreneurship prioritizes driving certain positive social or environmental impact, rather than simply avoiding potentially negative ones. The social or environmental cause is central to its business, and the goal is to generate the resources it needs to create the impact that it wants, in terms of sustainable social, systemic, and/or environmental solutions.

5. Social Service:

How is Social Entrepreneurship different from Social Service?

Social servants address symptoms while social entrepreneurs address systems.

Social servants work tirelessly to make communities and the world more equal, safe, healthy, and better. They take direct action to address the symptoms of a problem. But ultimately, their scope of work is focused on the immediate needs, as opposed to the systemic roots. So they leave the existing broken systems in place, while seeking to reduce the symptoms of its negative impact. 

Social Entrepreneurs, on the other hand,  seek to address the underlying systems that create those problematic symptoms. They also take direct action, but in this case it is to shift existing equilibriums that alleviate the symptoms from the inside out, mostly by creating new models that make challenge old assumptions, and make existing models obsolete. 

6. Public Policy:

How is Social Entrepreneurship different from Public Policy?

Public policy is bound by bureaucracy while social entrepreneurship is nimble.

Public policy is slow on its best days. And in times of political polarization, almost every good policy is going nowhere. And even in times where policies weren’t suffocated by political discord, they are designed from a top-down approach, which is often mired in red tape, and lack a nuanced appreciation of practical ground-level details. It is also often focused on quick wins to satisfy election cycles, rather than affecting long-term change. 

Social entrepreneurship flows from the bottom up, or middle out. It allows for noble execution and experimentation. It is not strained by the pressures of external politics and election cycles, and often creates, tests, and refines the models that could eventually be codified by public policy in the future. 

7. Charity Models:

How is Social Entrepreneurship different from Charity?

The charity model provides temporary relief, while social entrepreneurship provides sustainable solutions.

The charity model does not necessarily have sustainability in mind. It has been described as a way to “alleviate the conscience of the rich and provide temporary relief to the poor.” And social entrepreneur and Nobel Peace Prize Winner Muhammad Yunus explains that “We often use charity to avoid recognizing the problem and finding a real solution for it. So charity becomes a way to shrug off our responsibility, and appease our consciences.” 

Social entrepreneurship is designed to be self-sustaining by creating models that go deeper than providing temporary relief. For example Muhammad Yunus created a for-profit, anti-poverty bank that invested in the recipients ability to create their own economic agency, without being suffocated by existing systems that perpetuated that poverty.