Success with Social Entrepreneurship

Social entrepreneurship is the work of social entrepreneurs. A social entrepreneur recognizes

a social problem and uses entrepreneurial principles to organize, create and manage a venture
to achieve social change (a social venture). The main aim of social entrepreneurship is to
further social and environmental goals. However, whilst social entrepreneurs are most
commonly associated with the voluntary and not-for-profit sectors, this need not
necessarily be incompatible with making a profit.

A social entrepreneur identifies practical solutions to social problems by combining

innovation, resourcefulness and opportunity. Committed to producing social value, these
entrepreneurs identify new processes, services and products, or unique ways of combining
proven practice with innovation to address complex social problems. Whether the focus of
their work is on enterprise development, health, education, environment, labour conditions or
human rights, social entrepreneurs are people who seize on the problems created by change
as opportunities to transform societies.

Historical Examples of Leading Social Entrepreneurs:

 Susan B. Anthony (U.S.): Fought for Women's Rights in the United States, including
the right to control property and helped spearhead adoption of the 19th amendment.

 Vinoba Bhave (India): Founder and leader of the Land Gift Movement, he caused
the redistribution of more than 7,000,000 acres of land to aid India's untouchables and
landless.

 Dr. Maria Montessori (Italy): Developed the Montessori approach to early

childhood education.

 Florence Nightingale (U.K.): Founder of modern nursing, she established the first
school for nurses and fought to improve hospital conditions.

 Margaret Sanger (U.S.): Founder of the Planned Parenthood Federation of America,

she led the movement for family planning efforts around the world.

 John Muir (U.S.): Naturalist and conservationist, he established the National Park
System and helped found The Sierra Club.
 Jean Monnet (France): Responsible for the reconstruction of the French economy
following World War II, including the establishment of the European Coal and Steel
Community (ECSC). The ECSC and the European Common Market were direct
precursors of the European Union.

Characteristics of social entrepreneurs

Social Entrepreneurs Identify and Solve Problems on a Large Scale

Business entrepreneurs identify opportunities and exploit them for financial gain. Bill
Gates recognized the future of the personal computer and wrote special software to make
that future a reality. Similarly, social entrepreneurs identify opportunities to solve societal
problems on a grand scale. Martin Luther King who led the American Civil Rights
Movement and Gandhi who led his people to independence were examples of social
entrepreneurs. Each one inspired movements in their respective countries that led to
major shifts in thinking patterns and improved society as a whole.

Social Entrepreneurs Bring Value to Disadvantaged Communities

A business entrepreneur’s ultimate desire is to add value to their business enterprise and
to increase their personal self-worth. People like Bernie Madoff and Donald Trump
engage business opportunities to expand their own empires. Social entrepreneurs do not
exploit opportunities to bring value to their own bank accounts, but to add value to
disadvantaged communities. Recently, Jean-Michel Tijerina took a trip to Cambodia with
a friend. His heart was touched by what he saw and he was moved to begin
The Cambodia Project, an effort to build sustainable communities in Kampot, Cambodia
through secondary education.

Social Entrepreneurs Tap Inspiration and Creativity in Outcasts and Misfits

Business entrepreneurs seek out top talent from Ivy League schools who have proven
track records in top management positions. In contrast, social entrepreneurs see past
raggedy clothes to draw out the creativity of the downtrodden. In this way, social
entrepreneurs are transformational leaders in that they inspire others to take up a vision
that is beyond their previously displayed abilities.
Social Entrepreneurs Seize Opportunities to Challenge and Change Inequitable
Systems

Furthermore, social entrepreneurs do not engage in small, simple changes; rather, they
seize on opportunities to challenge and change inequitable systems. They stare down the
status quo and work to change whole belief systems and mindsets. Social entrepreneurs
exist to promote the best possible life for all.

Successful Social Entrepreneurs

When one talks about social sector, probably the first things we can think of are NGOs.
Yes, NGOs are a part of social entrepreneurship but their motive is primarily different
from that of a business. While NGOs focus completely on addressing a social issue, a
social business at the end of the day is a business and has to make money.  Also, the two
differ on funding – while NGOs mostly depend upon grants and donations, business has
to be self sustaining generate revenue stream to keep itself afloat (of course, various
options of funding exist for them but in long run they need to make money)

So, what are these businesses with a social twist?

Traditionally businesses existed to make profits. In the process they generated

employment and also help the economy with some of the benefits accruing to the society
at large. Tweaking this paradigm, what if businesses existed for betterment of some
segment of the society and in the process generate profits?

Well, this is the principle on which social entrepreneurship works.

How does their business work?

As the companies discovered “the bottom of pyramid” and changed their mindsets and

strategies to tap this huge segment, social entrepreneurs involved them in at least one of
the following ways –
1. By being the end user of the product or service (without digging hole in their already
near-empty pockets). Innovative schemes are being designed to tap this huge segment
and make them avail benefit of the service offering. This service can provide a
substantial benefit at a minimal cost (e.g. in education & healthcare) or be a key input
for some economic activity and hence help in securing their livelihoods (e.g.
microfinance).

2. Being a stakeholder or a part of one of the different aspects of the value chain (egg.
procurement, processing, distribution etc). Apart from being a symbiotic relationship
with the company, it also gives them employment and consequently spending power
which helps in keeping the local economy well oiled.

So, apart from benefitting people, selling products/ services and generating profits, social
entrepreneurship makes a lot of economic sense as well.

Few who dared to dream were…

Talking about social entrepreneurship, one is likely to conjure up an image of Nobel

laureate Mohammad Yunus of Grameen Bank fame lending money to the poor villagers
in Bangladesh to start a business get out of the debt trap and become financially
independent. In the process he made a successful business out of it, transformed the lives
of many poor people and brought about a paradigm shift in the mindsets across the globe.
Though not exactly a pioneer in social entrepreneurship, he can be credited for making it
popular and inspiring many people across the world to take the plunge.

A few examples in the Indian context are -

 The various players in the microfinance industry (Fino, Utkarsh Microfinance etc.)
which have tried to replicate Grameen Bank’s model with varying degrees of success
and have made a tangible difference to the lives of many people.

 One of the earliest and finest examples of social example in India has been the milk
cooperative Amul. It had a large community involvement and benefits reaching a
large section of the community. Also, the company has an amazing presence and is
doing well in terms of financials!
 Another example has been Dr. Devi Prasad Shetty of Narayana Hrudayala fame who
is providing affordable healthcare to the masses and has an ambitious expansion plans
as well.

 Fabindia has few tens of thousands of weavers as shareholders. Apart from giving
them a much better market exposure and a sustainable livelihood, the company also
shares its profits with them.

Grameen Bank

The origin of Grameen Bank can be traced back to 1976 when Professor Muhammad
Yunus, Head of the Rural Economics Program at the University of Chittagong, launched
an action research project to examine the possibility of designing a credit delivery system
to provide banking services targeted at the rural poor. The Grameen Bank Project
(Grameen means "rural" or "village" in Bangla language) came into operation with the
following objectives: 

 Extend banking facilities to poor men and women;

 Eliminate the exploitation of the poor by money lenders;

 Create opportunities for self-employment for the vast multitude of unemployed people
in rural bangladesh;

 Bring the disadvantaged, mostly the women from the poorest households, within the
fold of an organizational format which they can understand and manage by
themselves; and

 Reverse the age-old vicious circle of "low income, low saving & low investment",
into virtuous circle of "low income, injection of credit, investment, more income,
more savings, more investment, more income".

Grameen Bank methodology is almost the reverse of the conventional banking

methodology. Conventional banking is based on the principle that the more you have, the
more you can get. In other words, if you have little or nothing, you get nothing. As a
result, more than half the population of the world is deprived of the financial services of
the conventional banks. 

Grameen Bank starts with the belief that credit should be accepted as a human right, and
builds a system where one who does not possess anything gets the highest priority in
getting a loan.

Grameen gives high priority to women. 97 per cent of Grameen Bank's borrowers are
women. Grameen Bank works to raise the status of poor women in their families by
giving them ownership of assets. It makes sure that the ownership of the houses built with
Grameen Bank loans remain with the borrowers, i.e., the women.

Grameen Bank branches are located in the rural areas, unlike the branches of
conventional banks which try to locate themselves as close as possible to the business
districts and urban centres. First principle of Grameen banking is that the clients should
not go to the bank, it is the bank which should go to the people instead.

Grameen system pays a lot of attention to monitoring the education of the children
(Grameen Bank routinely gives them scholarships and student loans), housing, sanitation,
access to clean drinking water, and their coping capacity for meeting disasters and
emergency situations. Grameen system helps the borrowers to build their own pension
funds, and other types of savings.

Grameen system encourages the borrowers to adopt some goals in social, educational and
health areas. These are known as "Sixteen Decisions" (no dowry, education for children,
sanitary latrine, planting trees, eating vegetables to combat night-blindness among
children, arranging clean drinking water, etc.)

Conventional banks go into 'punishment' mode when a borrower is taking more time in
repaying the loan than it was agreed upon. They call these borrowers "defaulters".
Grameen methodology allows such borrowers to reschedule their loans without making
them feel that they have done anything wrong (indeed, they have not done anything
wrong.)
As of December, 2010, it has 8.34 million borrowers, 97 percent of whom are women.
With 2,565 branches, GB provides services in 81,376 villages, covering more than 97
percent of the total villages in Bangladesh. 

Rural Opportunities Production Enterprise (ROPE)

ROPE is a trusted manufacturer and supplier for large-scale rural production, leveraging
rural skills and rural materials. ROPE provides global customer’s access to rural workers
and artisans who manufacture handmade and hand-woven natural products. ROPE's
production centres manufacture items per customers' requirements while ROPE ensures
product quality, timely delivery and high labour standards. ROPE currently employs over
500 rural workers (full-time) manufacturing more than one million handmade units
per years. ROPE is also a social enterprise, providing employment to rural artisans by
linking them with global customers. ROPE is a socially responsible producer that strives
to provide its artisans steady incomes, benefits, opportunities for skill enhancement, and
improved working environments.

ROPE manages the production process while ensuring quality products and timely
delivery. To be commercially competitive and meet the challenges of working with small
artisans in rural areas, ROPE has developed technology to allow it to effectively and
efficiently manage its supply chain.

ROPE was founded in January 2007 and incubated at Indian Institute of Technology,
Madras through their Rural Technology and Business Incubator (RTBI). ROPE currently
produces in India and operates in the state of Tamil Nadu, employing full-time over 500
rural workers manufacturing more than one million handmade units per year. ROPE plans
to expand to other parts of India and to other countries to offer customers additional
unique rural skills and materials.

The following partners are integral to the success of ROPE: Rural Technology and
Business Incubator (RTBI), L-RAMP (the Lemelson Recognition and Mentoring
Program) and National Research Development Corporation (NRDC).
ROPE Model

ROPE has a model which leverages the strengths of the rural unorganized sector to the
benefit of global customers and also the rural workers. ROPE connects global customers
to rural workers allowing these customers the benefits of a rural workforce. Rural workers
bring their global customers unique skills and materials while being very cost
competitive. Furthermore, global customers and, in turn, their customers can take pride in
the social impact they are making in the rural economy.

There are two main reasons why rural workers do not connect with global customers:
First, there lacks credible institutions to engage rural producers and aggregate their output
for buyers while ensuring quality, quantity and delivery. Second, there is insufficient
organization among rural workers to cater to market needs, adequately market their
unique skills and materials, and create the scale necessary to compete in the global
marketplace.

ROPE addresses these challenges. As a one stop supplier for rural production, ROPE
organizes rural producers into local production centres, creates systems for production
management, ensures product quality and delivery, and aggregates the output and
delivery to global buyers. This enables ROPE to provide quality, quantity and delivery
guarantees expected by global customers also ensuring meeting compliance standards for
production processes. ROPE coordinates the work and production of rural workers while
having access to and credibility with global buyers. ROPE understands market and
customer needs and meets these demands.

To make the ROPE model possible, ROPE uses best management practices and
innovative technology. With our success, ROPE offers a very powerful product to its
customers: customers can purchase cost competitive items that meet quality standards
while making a social impact that their customer’s value.

AMUL

Amul was created by government initiative and by the passion of people like Dr Kurien.
It wanted to bring out change in the way milk was produced and distributed on a massive
scale. The vision was big, there was passion, there was capital (direct and indirect), and
there was terrific leadership, sustained and involved engagement with the grass-roots, and
the formation of partnerships to create the impact via the business. If we are to get out of
depending on the government for everything we have to think entrepreneurial.

Winner Profile: Rajiv Khandelwal and Krishnavtar

Sharma, Aajeevika Bureau, Udaipur

Co-founded by Rajiv Khandelwal and Krishnavtar Sharma in 2004, Aajeevika Bureau is

headquartered in Udaipur, with offices in Ahmedabad, Jaipur and seven blocks of
southern Rajasthan, where, every year, an estimated 800,000 rural workers migrate
seasonally to Gujarat and Karnataka.

All of Aajeevika Bureau’s clients are unskilled and semi-skilled men and women with
annual family incomes of less than INR 36,000. They are typically unviable for self-help
group or microfinance loans due to their migratory status and lack of assets.

Aajeevika Bureau offers rural seasonal migrants photo identity and financial services,
skills training, and partnerships with local governments and businesses, mostly at their
destination points in urban markets.

Over five years, more than 50,000 ultra-poor seasonal migrants have directly accessed the
Bureau’s services, registering 50-80% growth in their incomes as well as increased
citizenship entitlements. Additionally, Aajeevika’s model has been replicated by more
than 30 civil society organizations in Bihar, Orissa, Maharashtra, Andhra Pradesh and
Madhya Pradesh.

The Schwab Foundation, partnering with the Jubilant Bhartia Foundation, have named
this year’s Social Entrepreneurs of the Year (Go here to read about the finalists). Rajiv
Khandewal and Krishnavtar Sharma founded Aajeevika Bureau, a company that provides
unique photo IDs to inter-state migrants to provide access to banking, mobile telephone,
government services and more. The organization also provides skills training, job
placement, and legal aid and counselling to its members.