What is a Social Entrepreneur? How to Impact Lives through Business

2018-06-12T22:43:35+00:00 By |

A Purpose Driven Entrepreneur or Social Entrepreneur is best described as a person who establishes an enterprise with the aim of solving social problems or effecting social change.
 
I had no idea there was such a thing three years ago. Michael, my husband and I didn’t know what to call ourselves, actually. We are creators, innovators, visionaries, and entrepreneurs.  We believe in making money and lots of it for all the right reasons and we are lovers of hope, opportunities and people.
 
Recently I was invited to coffee. A woman asked if I would be willing to speak at a local  TED Talk on the subject of Social Entrepreneurship. She had heard my story and wanted me to share about the rise of social entrepreneurship, especially among women.  I smiled and said I would think about it. Then I ran to the car and googled social entreprenuership what it meant on my phone. With a sigh of relief, it finally all started to make sense.
 
That day felt the stars aligned.  Yes, I should have humbly admitted I didn’t know what that meant and because she decided to pick another woman to speak on the topic, my face clearly gave me away.  But I am a social entrepreneur and I do know a lot about the subject; I just didn’t know I did.
 
In a Forbes article writing by Dr. Ruth Shapiro states, “Coined by Bill Drayton of Ashoka in the early 1980’s, the term social entrepreneurship has become somewhat of a catch-all phrase.  Originally it referred to someone with the passion of an entrepreneur tackling a social challenge. Now, it has evolved to a number of meanings including but not limited to social interventions with distinctly business characteristics as well as businesses themselves.”
 
The buzz around the title has been getting more and more attention and rightfully so. For some reason Michael and I would get snickers and emails accusing us of appearing to be “all about the money” as we opened one store after another.  We were consistently creating new types of stores or products in line with our brand and social mission, but in some odd way it tended to irritate people because we are a nonprofit and we ‘should be’ more focused on our mission than on being successful with our business.  In our case, our nonprofit is a residential program for those seeking a new life. We started with 6 women and their children in a family home. The waiting list was always full and we knew if we could only expand, we would be able to help more women and children like that ones in our first home. In fact, we believe that the entrepreneur spirit is what drove the change in the program.  Of course, our faith drove it first. Yes, but we recognized early on what this type of spirit brings to people in general. It gave the residents the freedom to share their ideas, to join in on the vision for growth and inspire them to dream and innovate, thus contributing to the organization as a whole.
It all began in 2011:Crossing the Jordan Foundation, Inc. was founded with only $500 and a line of credit from a local hardware store to build our own clothing racks.  We walked door-to-door with our young children putting up door hangers asking for the community to donate unwanted items to a store that wasn’t open yet for a home for women and children we were still dreaming for.  We opened our first thrift store in 14 days with only a few volunteer friends. In the traditional entrepreneur world, that would have been applauded. But over the years, many have questioned our motives for expansion and our drive to increase sales and profits. Don’t get me wrong, we have more cheerleaders than nay-sayers but the journey has been…interesting.
 
Today, there are more nonprofits than ever and each nonprofit is, in essence, fighting for the same donor dollar, government grant or private foundation fund.  Because of this, in the last 30 years more social enterprises have been created which are typically defined as nonprofit organizations that operate businesses in order to generate revenues and fulfill their missions. This is us.

The Era of a New Kind of Entrepreneur

Value-based, social change leadership is creating a new kind of entrepreneur. One that breaks the traditional nonprofit leader mold of program-based building and organization.  We are keenly interested in the measurable impact we are making and we are more motivated by the social change than the money. As social entrepreneurs, we understand the need for scalability and the urgency to act immediately. We use our business skills, always measuring efficiency,  seeking means of improvement and operating with an innovative spirit to affect change.
 

For-Profit, Non-Profit or Hybrid?

The lines between for profit and non-profit are blurring. In the past, there has been a mindset that in order to ‘do good’, we could not ‘do well’.  This old mindset seems to be falling away as social investors want to see a strong bottom line for the sake of sustainability.
 
SPZ Legal out of Oakland, California and the firm that represents our nonprofit on this issue, says, the rise of social enterprises in recent years, however, has made that distinction less and less clear. Social entrepreneurs are finding innovative ways to challenge the traditional thinking about nonprofit organizations (by focusing on economically sustainable models) and for-profit businesses (by focusing on solving social issues).  In the hybrid model, a non-profit and a for-profit are linked. In some cases, one is a subsidiary of the other; in others, the two entities are bound by long-term contracts in which one entity fulfills a basic need for the other and vice versa. Hybrid organizations combine the social logic of a nonprofit with the commercial logic of a for-profit business. In the case of Crossing the Jordan Foundation, the non-profit is a 501 (c) 3 corporation with all revenue from all 6 thrift stores, recycling, moving and storage and warehouse operations within the non-profit structure to fund the program costs and our three program facilities.
 
With the creation of the Crossing the Jordan Buy Sell Trade Boutiques, a potential for a franchise opportunity for this brand of stores came to light and under the existing 501 (c) 3 corporate structure, this innovative model could not franchise and so a hybrid model was birthed with the nonprofit also owning a portion of the for-profit, Crossing the Jordan Franchise, Inc. in accordance with the law.
 
This is a great example of what is possible under this type of structure.  We were able to harness the innovation for the power of purpose and social change. Currently, over 65 residents live in our facilities for a total of 18-24 months.  We do not receive any assistance and less than 5% of our proceeds come from cash donations. The Buy Sell Trade Boutiques are now registered to sell in 15 states. The purpose of this type of hybrid model is to scale Crossing the Jordan Foundation, Inc. residential programs across the United States. This hybrid model opens doors for social investors to sow into the lives that are impacting through our team’s efforts and creativity.

It’s a Movement

It will take some time to shift a culture that is only accustomed to the old system.  More and more people are becoming personally motivated to be socially responsible for social change and this is good for everyone.  It seems to be less about if you are a non-profit or not but more about the impact that a company is making on society. Schools are creating undergraduate programs for social entrepreneurship and non-profits like ours are busting out of the non-profit ‘box’ and creating more opportunity for impact.  Greater numbers of people and organizations are creating networks to work together instead of competing for the same donor dollars.
 
Change is good in business and in this case, it is good for the soul.  Lives do matter…all of them and with this new era of entrepreneurship, well, it means the sky’s the limit for possibilities.

About the Author: