Social entrepreneurship is a relatively new concept. With the social entrepreneurship model, the traditional nonprofit mission of solving a problem is mixed with the traditional business mission of making money. The nonprofit can thus become self-sustainable by making money and not have to rely on fundraising and grants. As with all forms of international development, social entrepreneurship has pros and cons.
I think the biggest con of social entrepreneurship is the plethora of questions that each independent entrepreneur has answer. As a concept that unites nonprofits and business, the line between helping and exploiting can be slippery. How much profit for the backer is ok? Who defines success? Imposing a Western interpretation of success on impoverished people in developing countries misses the actuality of development. What is the end goal? Industrialization? Some say industrialization caused the breakdown of families. Modernization? Some say modernization has caused the breakdown of all social relationships. Who holds the entrepreneur accountable for the proper answers to these questions?
The pro of social entrepreneurship is that a nonprofit can become self-sustainable and this can empower the nonprofit to empower the community it serves. A criticism of nonprofits is that the traditional nonprofit model does not have the capacity to empower people because nonprofits are accountable to donors and not to beneficiaries. “NGOs [nongovernment organizations] are not operating in poor countries primarily to save lives, but to satisfy their donors,” (Barber & Bowie, 2008, pg. 748). This doesn’t mean that nonprofits are imprudent; it just means the current dynamic makes donors the decision makers of the impoverished people’s lives. Social entrepreneurship can change this dynamic. We love our donors and we couldn’t do the work we do without our donors. All I’m saying is that social entrepreneurship may be a way to redistribute power from the donors to the impoverished people, so that they can take control over their own lives. I believe our donors all hope this will happen.
I’ll leave you with a final thought. There’s a book called Nectar in a Sieve. In the book, a factory comes to the village and hires all the protagonist’s sons. One by one the sons die (corruption of factory management, drinking alcohol that was introduced by the foreign factory owners, accident in factory, etc.). As if these tragedies are not enough, after a while she can’t afford to buy staples in the village because the prices have inflated. The factory workers have money and are able to pay higher prices, so the village stores raise the prices, but the villagers that do not work in the factory can not pay the higher prices. Finally, she sells her land to the factory against her will and becomes a homeless person in the nearest city. Moral of the story: the factory helped some people directly but harmed even more people indirectly. How do we help people without disturbing the culture, the way of life, and the family structure? The history of development seems to show that development cannot happen without disturbance of the status quo. Thus, social entrepreneurship, as with all change, has positive consequences, negative consequences and unintended consequences. To manage this change well, the leaders must research the possible effects of the change and include all stakeholders in the decision-making process. Our goal is to manage change with proper counsel and respect to all involved, so that the beneficiaries have the power to control their own lives.