Social Entrepreneurship

Copyright 2010 by Raj Melville

Social Entrepreneurship

Raj Melville


Key Ingredients of a Social Entrepreneur

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Social Activist Business pioneer

Social Entrepreneur


What Is Social Entrepreneurship ?

� Business entrepreneurs change the face of business

� Social entrepreneurs play the role of change agents in the social sector

� Social entrepreneurs create sustainablesolutions that change society for the better

"Social entrepreneurs are not content just to give a fish or teach

how to fish. They will not rest until they have revolutionized the fishing industry."

Bill Drayton, CEO, chair and founder of Ashoka Foundation


Business and Social Entrepreneurs Share Common Traits

� Strategic thinkers: Like business entrepreneurs, social entrepreneurs act upon what others miss

� Mission driven: Work hard to generate value

� Focused: Both entrepreneurs are intensely focused and hard-driving in their pursuit of a social vision

� Resourceful: They are skilled at mobilizing and motivating resources

� Results oriented: Driven to produce tangible results

� Challenge Seekers: Tackle major issues, opportunities or challenges

� Perseverance: Continue efforts despite obstacles


SEs Bring New Approaches to Social Issues � New Design Solutions

� Process Redesign – Aravind Eye Care (www.aravind.org )� Product Redesign – Jaipur Foot� Distribution/Logistics – Saafwater www.saafwater.com� Infrastructure/Technology – Grameen Phone

� New Business Models� Micro-Finance

� Grameen� Cooperatives

� SEWA http://www.sewa.org� Muthu Velayutham, Gram Mooligai Co Ltd http://www.new-

ventures.org/arquivos/GramMooligai.pdf� Triple Bottom Line

� New Funding Models� Venture Philanthropy � Socially responsible funds.

� Calvert Funds� Acumen Fund

� Creative Leverage models


Social Entrepreneurship

Governmental Organizations

For Profit Businesses

Non-Profits

SocialEntrepreneurs


Questions?

� Contact me

� Raj Melville

� Email: [email protected]

� Blog: http://blog.ambientengines.com/


Extra Slides


The Non-profit Sector

� Total US Non Profit Organizations (2006): 1,478,194

� 904,313 Public Charities� Organizations do not pay federal tax

� Donations are tax deductible

� 109,852 Private Foundations� Created to distribute money to charities or individuals

� About 29 % of Americans over the age of 16 volunteered in 2005

� In 2004, public charities reported nearly $1.1 trillion in totalrevenues (Source: National Center for Charitable Statistics)

� Total charitable giving in the U.S (2007): $306.39 billion, consists of 2.2 % of GDP

(Source: Giving USA Foundation)


What Challenges do Social Entrepreneurs tackle?

� Social entrepreneurs typically address areas of unmet social need or social opportunity creation that the public or private sectors have failed to address

� Health� Water/Sanitation� Education� Sustainable Infrastructure: Housing, Communications� Renewable Energy� Environmental Sustainability� Food and Nutrition� Women’s Issues� Sustainable Agriculture & Technology

Also see the UN Millennium Development Goals http://www.un.org/millenniumgoals/


Examples of Social Entrepreneurs

� Grameen

� Aravind and Aurolab

� Agastya

Additional examples:

� “How to Change the World” by D. Bornstein

� “The Fortune at the Bottom of the Pyramid” by C. K. Prahalad

� www.Ashoka.org


Grameen

� Grameen Bank was started by Prof. Muhammad Yunus in Bangladesh in 1976 (http://www.grameen-info.org/ )

� Social goal was to� Extend banking facilities to poor men and women who otherwise

would not get bank loans� Eliminate the exploitation of the poor by money lenders� Create opportunities for self-employment for the large number of

unemployed people in rural Bangladesh

� Currently Grameen has� 7.61 million borrowers, 97 per cent of whom are women� 2,535 branches in 83,343 villages � Loan recovery rate is 98.24 per cent. � 2008 Projected loan disbursement of US $ 874 million� For profit concern generating dividends to borrowers who are

shareholders


Grameen


Grameen

� What did they do differently?� Went after untapped sector

� Were willing to take a risk with uncollateralized loans to poor� Focused on women entrepreneurs

� Introduced new business processes� No legal paperwork for loans� Created self help groups to ensure repayment thru social

pressure� Simplified loan repayments with weekly meetings for

incremental loan payments

� Created competitive product� Set market rates of interest versus usurious money lender

rates

Websites like www.kiva.org and www.microplace.org now allow individuals to help entrepreneurs in developing countries


Aravind Eye Hospital

� Founded in 1976 by Dr. G. Venkataswamy, in Madurai, India (http://www.aravind.org/ )

� A social organization committed to the goal of elimination of needless blindness through comprehensive eye care services.

� Every year the Aravind Eye Care System � Sees over 2.4 million patients

� Does over 200,000 cataract operations, nearly half of them free

� Average cost at one hundredth of that in the US.

� Doctors conduct over 2000 operations a year, over 6 times the national average

� Aurolab, a manufacturing spinoff, makes interocularlenses to world class standards at tenth of international cost ($4-5 versus $100 -$150)


Aravind Eye Hospital

� What did they do differently?� Focused on the social objective

"But Aurolab sells the lenses for less, not only because their costs are lower but because they chose to price them lower –because our goal is maximizing service rather than maximizing profit."

� Streamlined the entire operation process� Setup as a production line

� Increased the utilization of doctors and equipment

� Built new multi-tiered pricing models� Cross subsidized free patients with higher charges for those

who could pay


Agastya

� Founded in 1999 by Ramji Raghavan in Bangalore, India (http://www.agastya.org/ )

� Non-profit focused on transforming education in India through a scalable and interactive education model� India, one of the most populous countries, has over 35% illiteracy rate� Rural schools are poorly staffed with teachers with inadequate training

� Created a science training center with distributed centers in each rural district� Developed a new style of interactive teaching� Agastya Mobile Labs take science education out remote schools� Mobile Labs reach over 800 rural teachers and 40,000 students a year � Over 30 Agastya Mobile Labs make it largest science outreach program

in the world

� Results show passing rates at Agastya schools up from 40% to 96%.

� Having touched over 80,000 teachers and 2.5 million children, � Prime Minister’s National Knowledge Commission has

recommended the ‘Agastya model’ for nationwide dissemination


Agastya


Agastya

� What did they do differently?� Disruptive business model

� Developed a unique teaching model

� Break the typical mold of teacher/student interaction

� Redesigned the supply chain� Took classes out to the student

� Matched resources to talent available� High school students as capable instructors

� Scales reasonably well

� Engage the ‘customer’ i.e. student� Created a product that satisfied both student and teacher’s

needs


Getting Started

� Social entrepreneurs play the role of change agents in the social sector, by:

� Adopting a mission to create and sustain social value (not just private value)

� Recognizing and relentlessly pursuing new opportunities to serve that mission

� Engaging in a process of continuous innovation, adaptation, and learning

� Acting boldly without being limited by resources currently in hand

� Exhibiting heightened accountability to the constituencies served and for the outcomes created(Source: The Meaning of Social Entrepreneurship, J.

Gregory Dees)

1. Define a clear vision around a social issue or challenge

2. Identify market opportunity and define innovative or disruptive solutions

3. Build a sustainable business model

4. Clearly define social impact metrics

5. Recruit and attract resources and volunteers


The Funding Gap

Concept Stage

Implement Stage

Growth Stage

Sustain Stage

Developing Concept

Implement and Build Concept

Scale Concept

Long Term Sustainability

Echoing Green ($60K)

Corporate Foundations

Draper Richards ($100K)

Government

Family Foundations

Venture Philanthropists

Schwab Foundation

Ashoka (Stipend)

Skoll($1 Mill)

Social InnoForum

The G

AP

New Profit

Confidential

Social Entrepreneurship

Documents

Transcript of Social Entrepreneurship