Week 2: Why Nonprofits Should Fear Social Enterprise?

So why will social enterprise win over NPOs? Both NPOs and SEs have social mission. What makes NPOs fear SEs?

One of the main factors is that it is self-sustainable. Social enterprise can generate revenue and profit to ensure the continuity of their business and social mission. For example, SEs have a business that is running, selling products, that most of the time, in line with their social mission to create awareness of their social mission and in the same time generates revenue to ensure that the business side of it is taken care of. However, NPOs depend more of donations from public, corporates or through their fund raising activities to ensure that they have enough funding to sustain their organizations. Hence, do the NPOs focus more on getting more donations from different sources to ensure that their organizations are sustainable or do they focus more on their social mission?

Most of the time, most NPOs will focus more on getting donations instead of focusing on their initial intentions of doing good.

This article describes how social enterprise will be able to take over NPOs in the future as both are generally similar as they seek to tackle social issue faced by the world. What makes them different is that SEs is self-reliant while NPOs are more dependent on donations.

The article has mention that “For decades nonprofit leaders have been pushing corporations to embrace “corporate responsibility”” which is CSR (Corporate Social Responsibility) by donating huge amount of money to the organization to build “good image of the corporate”.

Such methods are not effective anymore, as more corporates are now try to improvise their own CSR department to encourage their stuffs to come up with ideas on how to contribute back to the society instead of just donating a large sum of money to NPOs or charities.

This makes me wonder, if a corporate has a CSR department and they are focusing a significant amount of effort to contribute back to the society what difference it is from a social enterprise?

Does that mean that there is no need of NPOs? No need of SEs?

NO! One of the main reasons that more corporate are looking into CSR is because of the public’s supportiveness of NPOs and SEs. They realized that they will also need to do something about social issues in order to make sure the competitiveness is there.

Thus, I believe that many NPOs are realizing that they have to be self-sustainable in order to survive and work towards their social mission. Hence, if NPOs are adaptable to changes I think that they should not fear of been replace by social enterprise as they are slowly developing into one already.

All in all, there might be one day that social enterprise will take over NPOs!

Till we meet again!

References:

MikecassidyAZ. (2011). Why Nonprofits Should Fear Social Enterprise? Retrieved October 30, 2012, from Leadership For Good: http://leadershipforgood.com/why-nonprofits-should-fear-social-enterprise/

Week 1: Social Entrepreneurs use Startups to Change The World

Social entrepreneurship is now viewed as an important source of development and improvement in the developed countries as it helps to create social and economic values. Thus, a social enterprise is a business that not only focused on profit-making but it also aims to create positive change in the society to benefit the disadvantaged groups in the society, hence a business that is revenue-generating, not a charity.

This article is about Muhammed Yunus, a 2006 Nobel Peace Prize winner and founder of Grameen Bank, sparked a movement with the simple question: “If you are a socially conscious person, why don’t you run your business in a way that will help achieve social objectives?” (Farr, 2012)

Today, many young entrepreneurs are attempting to alleviate global poverty, global warming, hunger, war and many more social issues faced in the world. Many of them believe that using the knowledge taught to them, the advance technology we had and a heart to make a difference in peoples’ life; they can make the world a better place to live in.

To many of the inspired youths and adults, it’s considered the right thing to do and is viewed as being cool/respectable among their peers. Hence, there are more and more competitions and funding available for the youth to take advantage of to get a funding of up to $3000 - $10,000 as a start-up cost for their business. 

The trend is that most youths would only talk about how much they are going to do to impact the world after they graduate but most of the time do nothing about it. Hence, we are thankful that we do have a significant number of youths who step-up and are determined to make the world a better place, without sacrificing an income.

“What we’re seeing now is a movement of both investors and entrepreneurs to the massive spectrum of opportunity in between the charitable NGO’s and purely for-profit companies that solely care about their bottom line,” explained Ophir Samson, project manager at the Portland Trust. (Farr, 2012)

I believe that social enterprises are the perfect balance between the social and financial aspect. People are more conscious about the social issues that are around them, thus, they are more prone to do good and feel more towards the needy people in the society. All these, contributes to the flourishing of social enterprises and many other investors are now on board to contribute back to the society. Although I do think that there will bound to be people who call themselves a social enterprise to make profit, I still choose to believe that most of us really do want to make a change in the world no matter how little the impact maybe. It is always the domino effects that people come together to make a difference that will create miracles. Youths are definitely the hope of the future.

VentureBeat’s own Ciara Byrne says, “What’s cooler than a million dollars? Changing a million lives.” (Farr, 2012)

References:

Farr, C. (2012, February 14). Social entrepreneurs use startups to change the world. Retrieved October 28, 2012, from VentureBeat: http://venturebeat.com/2012/02/14/social-entrepreneurs-use-startups-to-change-the-world/