01 aps 1015 class 1 - intro to and motivations for se - for lecture
- 1. APS 1015: Social Entrepreneurship Class 1: Definitions and Motivations for Social Entrepreneurship Thursday, May 10, 2012 Instructors: Norm Tasevski (norm@socialentrepreneurship.ca) 1
- 2. © Norm Tasevski 2
- 3. © Norm Tasevski Before we begin… This course is designed for those that want to start a social venture, and/or work in social enterprise 3
- 4. © Norm Tasevski Course Director – Norm Tasevski 4
- 5. © Norm Tasevski What Makes YOU a (Social) Entrepreneur??? 5
- 6. © Norm Tasevski Agenda • Class Intros • Syllabus and Class Structure • Ground Rules • Defining Social Entrepreneurship • What motivates the social entrepreneur? • What did we learn? • Next week 6
- 8. © Norm Tasevski Class Rules – Participation - quality, not quantity! – No stupid questions (only stupid answers) – Respect your classmates – attend and be punctual! 8
- 10. © Norm Tasevski First, we need to understand entrepreneurship... 10
- 11. © Norm Tasevski Entrepreneurs… …are motivated 11
- 12. © Norm Tasevski Entrepreneurs… …are innovative 12
- 13. © Norm Tasevski Entrepreneurs… …are resourceful 13
- 14. © Norm Tasevski Entrepreneurs… …take chances 14
- 15. How is Social Entrepreneurship Different? 15
- 16. © Norm Tasevski Entrepreneurs… …are motivated …are innovative …are resourceful …are risk takers 16
- 17. © Norm Tasevski But, for the social entrepreneur… …motivations are different 17
- 18. © Norm Tasevski And… …innovation is different 18
- 19. © Norm Tasevski And… …resourcefulness is different 19
- 20. © Norm Tasevski And… …risk taking is different 20
- 21. © Norm Tasevski An Example – “Civic Engagement, Scaled Up” 21
- 22. © Norm Tasevski Other Differences “Social entrepreneurs are not content just to give a fish or Focus on “systems how to teach fish. They will not rest until they have thinking” and revolutionized the fishing industry” “systems change”: Bill Drayton “(Social entrepreneurs) work in areas where there is partial or total market failure…what distinguishes them is that they are prepared Seek “profit” in traditionally to strike a very different balance when it comes to creating unprofitable pursuits: value for those who would not normally be able to afford it” John Elkington 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?” Possess a strong “ethical impetus”: 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.” 22
- 23. © Norm Tasevski 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 23
- 24. Break 24
- 25. Defining Social Enterprise… 25
- 26. © Norm Tasevski 26
- 27. © Norm Tasevski 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 factor: How deep social & business purpose is imbedded 27
- 28. © Norm Tasevski A Question… What makes a business a business? 28
- 29. © Norm Tasevski Components of a Business A transaction A product/service A goal A legal form 29
- 30. How is Social Enterprise Different? 30
- 31. © Norm Tasevski Social Enterprise has… Yep Absolutely A transaction A product/service This one’s complicated Yeah, but… A goal A legal form 31
- 32. © Norm Tasevski The SE Product/Service It’s still… But… • “Social benefit” is added somewhere on the value chain 32
- 33. © Norm Tasevski What is Social Benefit? • For our purposes, social benefit may arise when one attempts to overcome an injustice or inequity in society that the market, on its own, cannot respond to – E.g. creating employment opportunities for individuals that may not otherwise be employable in the marketplace • A similar concept – “environmental benefit” 33
- 34. © Norm Tasevski Exercise • Add social benefit to: 34
- 35. © Norm Tasevski The SE Transaction Traditional Business Social Enterprise Customers Customers “Clients” 35
- 36. © Norm Tasevski 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” 36
- 37. © Norm Tasevski Viewing SE Through a “business lens” • How you think about cost – Additional costs borne on business that achieves a social benefit (how do you incorporate? Valuate it?) • How you think about investment – Opportunities to get investment through traditional models, but because your business is hybrid, the investment needs to be hybrid (i.e. layering of different financing mechanisms) • How you think about success – Part of the social enterprise motivation is social, so you need to consider success in a dual lens. How do you articulate success in both of these spheres? 37
- 38. © Norm Tasevski The Legal Form • No clearly defined legal form for social enterprise in Canada • “Form follows function” Spectrum of Social and Financial Returns Nonprofit Structure For-profit Structure Emphasis on Emphasis on Nonprofit with Business with Conventional Social Conventional Financial Social Return some earned social Nonprofit Enterprise Business Return income responsibility Philanthropic Capital Commercial Capital Source: Stanford Social Innovation Review, Spring 2008; Jed Emerson cited as contributor 38
- 39. © Norm Tasevski A test… I am: • A retailer Facts: • Sells goods at rates affordable by low- • $115M raised for charity since 1995 income individuals ($18M in 2009) • Employs individuals with barriers to employment • Over 1,000 environmentally- • Goals: approved products on sale – 92% of imported goods from green • 1700 new jobs created in Canada in factories 2009 – 95% of waste redirected from landfill – Desire to be supplied 100% by renewable energy by 2015 Social Enterprise or Not? 39
- 40. © Norm Tasevski A test… I am: • A café • 84% of all coffee ethically sourced (goal of 100% by 2015) • Supports farmers by a) selling fair trade coffee, and b) providing loans to coffee growers • Purchase carbon credits to offset production • Goals: – 100% of cups to be reusable/recyclable – Use recycled/renewable materials in café construction – Organize a “month of service” (employees act as “change makers” in their communities) Social Enterprise or Not? Facts: • Sells approx. 10% of all Fair Trade coffee globally • Almost 200,000 volunteer hours made by employees worldwide • Over 53,000 youth supported and engaged in community events 40
- 41. © Norm Tasevski What does this mean? Social CSR Enterprise Social Complexity Enterprise 41
- 42. © Norm Tasevski What SE is and is Not Social Enterprise Is Not… Social Enterprise Is… • A fundraising strategy (i.e. a “give” • A business line (i.e. a “sales” mentality) mentality) • Solely focused on either “customers” • Focused on both “customers” and or “clients” “clients” • Dependent on restricted funds for • Sustainable (ideally “self-sufficient”) operations (i.e. not sustainable) • An event or one-off activity (e.g. • A continuous, market-driven activity conferences, bake sales) • 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 42
- 43. © Norm Tasevski Some Definitions • “An organization or venture that achieves its primary social or environmental mission using business methods.” Social Enterprise Alliance • “Business ventures operated by non-profits, whether they are societies, charities, or co-operatives.” Enterprising Non-Profits (enp) • “… social mission driven organizations which apply market-based strategies to achieve a social purpose. The movement includes both non-profits that use business models to pursue their mission and for-profits whose primary purposes are social.” Wikipedia 43
- 44. Motivators for Social Entrepreneurs… 44
- 45. © Norm Tasevski A Question… What motivates you?? 45
- 46. © Norm Tasevski 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 46
- 47. © Norm Tasevski 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”! ! 47
- 48. © Norm Tasevski 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.”! ! 48
- 49. © Norm Tasevski “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.”! 49
- 50. A total of © Norm Tasevski 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! 50
- 51. © Norm Tasevski 51
- 52. © Norm Tasevski So What Motivates The Social/ Environmental Entrepreneur? “…it was an epiphanal experience…” Ray Anderson, Interface Carpets
- 53. © Norm Tasevski So What Motivates The Social/ Environmental Entrepreneur? “I heard the same story again and again. Someone had experienced an intense kind of pain that branded There was them in some way. They said, ‘I had’ to do this. nothing else I could do.” Jody Jensen, Ashoka
- 54. © Norm Tasevski So What Motivates The Social/ Environmental Entrepreneur? “…that made a real impression on me…” Jeff Skoll, eBay, Skoll Foundation, etc.
- 55. © Norm Tasevski So What Motivates The Social/ Environmental Entrepreneur? “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
- 56. © Norm Tasevski So What Motivates The Social/ Environmental Entrepreneur? “…powerful moments of inspiration…” Jacqueline Novogratz, Acumen Fund
- 57. © Norm Tasevski What about…
- 58. © Norm Tasevski What did we learn? 58
- 59. © Norm Tasevski Next Week • 1st deliverable: – Pick a social/environmental issue (international or Canadian) from the provided list, and… – Pick a group of 4-5 (we will finalize groups next week based on final class numbers) • Readings 59