APS1015 Class 1: Introduction to Social Entrepreneurship and Social Systems

APS 1015: Social Entrepreneurship

Class 1: Introduction to Social Entrepreneurship and Social Systems

Wednesday, May 8, 2013

Instructors: Norm Tasevski (norm@socialentrepreneurship.ca) Karim Harji (karim@socialentrepreneurship.ca)

Before we begin…

This course is designed for those that want to generate social change

Course Director – Norm Tasevski

Course Director – Karim Harji

What Makes YOU a Budding (Social) Entrepreneur???

Agenda

•  Class Intros •  Syllabus and Class Structure •  Ground Rules •  Defining Social Entrepreneurship •  What motivates the social entrepreneur? •  Break •  Introduction to Social Systems •  What did we learn? •  Next week

Syllabus

Class Rules

–  Participation - quality, not quantity!

–  No stupid questions (only stupid answers)

–  Respect your classmates – attend and be punctual!

Defining Social Entrepreneurship…

The Roots of Social Entrepreneurship

In the beginning…

Then…

Private Sector

•  Earn $ •  Pay tax •  Donate to charity

Public Sector

•  Collect tax •  Run programs •  Grant to charity

Nonprofit Sector

•  Receive donations/grants

•  Run programs

Nonprofit Sector •  Donations

•  Grants

•  Sustainability

Response? Nonprofit Sector Private Sector Activities

Caveat…

Social Entrepreneurship is no longer a nonprofit-only activity!!!

To Understand Social Entrepreneurship, we need to understand entrepreneurship...

Entrepreneurs…

…are motivated

Entrepreneurs…

…are innovative

Entrepreneurs…

…are resourceful

Entrepreneurs…

…take chances

How is Social Entrepreneurship Different?

Entrepreneurs…

…are motivated …are resourceful …are risk takers …are innovative

But, for the social entrepreneur…

…motivations are different

And…

…innovation is different

And…

…resourcefulness is different

And…

…risk taking is different

An Example – “Civic Engagement, Scaled Up”

Other Differences

Focus on “systems thinking” and

“systems change”:

“Social entrepreneurs are not content just to give a fish or how to teach fish. They will not rest until they have

revolutionized the fishing industry” Bill Drayton

Seek “profit” in traditionally

unprofitable pursuits:

“(Social entrepreneurs) work in areas where there is partial or total market failure…what distinguishes them is that they are prepared

to strike a very different balance when it comes to creating value for those who would not normally be able

to afford it” John Elkington

Possess a strong “ethical impetus”:

David Bornstein: “Why do you work on the kinds of projects you do? Why don’t you just want to make a lot of money?”

Fabio Rosa: “I am trying to build a little part of the world in which I would like to

live. A project only makes sense to me when it proves useful to make people happier and the environment more respected, and when it

represents a hope for a better future. This is the soul of my projects.” 25

Some Definitions

•  “Social entrepreneurs identify resources where people only see problems. They view the villagers as the solution, not the passive beneficiary. They begin with the assumption of competence and unleash resources in the communities they are serving”

David Bornstein

•  “A social entrepreneur is someone who recognizes a social problem and uses entrepreneurial principles to organize, create and manage a venture to make social change”

Wikipedia

What is a Social Enterprise?

•  Organizations (non-profit or for-profit) that imbed both social purpose and business purpose into their organization

•  Returns are both Social (i.e. impact) & Financial (i.e. profit)

•  Key distinguishing factors: Intent and motivation

The SE Goal - Social vs. Financial Purpose

Social Purpose –  Creating a “social return” by making positive change

within an inequitable social system •  Examples: Reduced Poverty, Improved Literacy

Financial Purpose –  Creating a “financial return”, usually through the sale of

products/services in the marketplace

Blended Purpose –  Effecting social change by combining social and financial

return –  Also called “Blended Value”

What SE is and is Not

Social Enterprise Is Not… Social Enterprise Is…

•  A fundraising strategy (i.e. a “give” mentality)

•  A business line (i.e. a “sales” mentality)

•  Solely focused on either “customers” or “clients”

•  Focused on both “customers” and “clients”

•  Dependent on restricted funds for operations (i.e. not sustainable)

•  Sustainable (ideally “self-sufficient”)

•  An event or one-off activity (e.g. conferences, bake sales)

•  A continuous, market-driven activity

•  Providing value to clients only •  Providing value to both “clients” and “customers” (and distinguishing between both!)

•  Quick •  A venture that may take several years to become profitable/sustainable

A test…

I am: •  A retailer •  Sells goods at rates affordable by low-

income individuals •  Employs individuals with barriers to

employment •  Goals:

–  92% of imported goods from green factories

–  95% of waste redirected from landfill –  Desire to be supplied 100% by

renewable energy by 2015

Social Enterprise or Not?

Facts: •  $115M raised for charity since 1995

($18M in 2009) •  Over 1,000 environmentally-

approved products on sale •  1700 new jobs created in Canada in

What does this mean?

Social Enterprise

Complexity

Motivators for Social Entrepreneurs…

A Question…

What motivates you??

Some Definitions

•  Internal and external factors that stimulate desire and energy in people to be continually interested in and committed to a job, role or subject, and to exert persistent effort in attaining a goal. Motivation is the energizer of behaviour and mother of all action. It results from the interactions among conscious and unconscious factors such as the (1) intensity of desire or need, (2) incentive or reward value of the goal, and (3) expectations of the individual and of his or her significant others.”

BusinessDictionary.com

•  “Motivation is the activation or energization of goal-orientated behavior. Motivation may be rooted in the basic need to minimize physical pain and maximize pleasure, or it may include specific needs such as eating and resting, or a desired object, hobby, goal, state of being, ideal, or it may be attributed to less-apparent reasons such as altruism, selfishness, morality, or avoiding morality. Conceptually, motivation should not be confused with either volition or optimism. Motivation is related to, but distinct from, emotion.”

Wikipedia

In response to why people are not giving to the Pakistani flood in the same way as they did for Haiti, one woman said:!!“It’s a rogue state, if they can afford the nuclear bomb they can look after their own”!!

Costin Militaru, an outreach worker…has met addicts as young as 9 years old. "His family had no money for food. He was hungry and kept crying, so they fed him heroin," Militaru says. "If you're high, you don't need food.”!!

“On March 24, 1989, the Exxon Valdez ran aground in northern Prince William Sound, spilling 42 million liters of crude oil and contaminating 1,990 kilometers of shoreline. Some 2,000 sea otters, 302 harbor seals and about 250,000 seabirds died in the days immediately following the spill.”!

A total of 32,700 different people stayed in Toronto's emergency shelters in 2005. 4,600 were children. !!Over half a million Toronto households live below the poverty line!!1 in 10 homeless report attempted suicide in 2006!

So What Motivates The Social/Environmental Entrepreneur?

“…it was an epiphanal experience…” Ray Anderson, Interface Carpets

“I heard the same story again and again. Someone had

experienced an intense kind of pain that branded

them in some way. They said, ‘I had’ to do this. There was nothing else I could do.”

Jody Jensen, Ashoka

“…that made a real impression on me…” Jeff Skoll, eBay, Skoll Foundation, etc.

“I was teaching in one of the universities while the country was

suffering from a severe famine. People were dying of hunger, and I felt very helpless. As an economist, I had no tool

in my toolbox to fix that kind of situation.” Mohammed Yunus, Grameen Bank

“…powerful moments of inspiration…” Jacqueline Novogratz, Acumen Fund

What about…

Introduction to Social Systems…

What is a System?

“A set of "Things” (people, organizations, objects…) that are

interconnected in such a way that they form their own pattern of behaviour over time”

Donella Meadows

System Behaviour

•  A system creates/causes its own responses •  Outside forces can influence system response, but

don’t cause the response •  The same outside force that acts upon two different

systems can therefore elicit two different responses

•  Example: the flu virus

System Components

1.  Elements 2.  Interconnections 3.  Functions/Purpose Example: Soccer (Football)

Elements

Interconnections

Purpose

System Components

•  Elements –  Tangible (people, buildings) –  Intangible (team pride, learned skills)

•  Interconnections –  Physical flows (e.g. objects moving) –  Information flows (e.g. rules, instructions)

•  Function/Purpose –  Intended responses (e.g. goal to win a soccer match) –  Unintended responses (e.g. violence after a soccer match)

Social Systems – the Unintended Responses

Social System Unintended Response

• Health Care • Obesity • Spread of preventable disease

•  Education • High school dropout • High education costs

•  Transportation • Environmental damage • Inefficient movement of people

• Food • Food insecurity • Food waste

What is Not a System?

•  Anything with one ore more of the components (e.g. elements, interconnections or function/purpose) missing

“Mapping” a System

Another Example

What did we learn?

APS1015 Class 1: Introduction to Social Entrepreneurship and Social Systems

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