Social entrepreneurship - what is it, what are its main differences from commerce in the classical interpretation of this term?
The essence of social entrepreneurship, and at the same time - its main difference from classical commerce, lies in its focus - if ordinary business is primarily aimed at making a profit with its subsequent distribution among shareholders, management and employees of the enterprise, as well as with partial refinancing, the primary task of social entrepreneurship is to fulfill a certain mission, which is useful to society in one way or another.
At the same time, attention should be paid to the possibility of making a profit in commercial companies that identify themselves as socially oriented - but the funds received do not go to the shareholders (owners) of the enterprise, but are directed to the development of the organization (in other words, reinvestment is carried out 70 -90% profit - after deducting taxes and salary payments to staff). Although here everything is far from unambiguous, because there are several areas of social entrepreneurship - and, accordingly, several options for financing projects and distributing profits:
1. Purely non-profit organizations. For example, the Ashoka charitable foundation, which finances other social projects, both beginners and very solid ones.
2. Hybrid forms of social entrepreneurship. First of all, it is necessary to mention here the largest social networks such as Facebook and Instagram. The main concept of these projects was to increase communication opportunities between people, but after a while, due to high traffic, social networks became universal advertising platforms and allowed their creators to receive colossal income (and Instagram initially did not plan to modernize at all). That is, in this case, a successful combination of a commercial project and a social mission is shown.
3. Commercial organizations that open socially oriented projects in parallel with their activities. Here you can cite almost any large corporation as an example, because they practically all open all kinds of charitable foundations. Another question is the true purpose of the projects in this case. The thing is that most of these socially oriented projects are created either for money laundering or for the purpose of PR. But nevertheless, no one removed the social component of them, and they bring considerable benefit to society.
4. Venture non-profit funds, the main purpose of which is to finance start-ups with a more or less social orientation.
If in Western countries social entrepreneurship is a fairly widespread phenomenon that benefits everyone - both businessmen themselves and society and the government, in Russia, business aimed primarily at the implementation of a particular social mission remains in "Embryonic" state, and due to significant economic problems, everything goes to the fact that the situation in the near future will not change in any way. No, there are many charitable foundations, individual entrepreneurs that develop mobile applications that allow children to better absorb school material, as well as larger organizations that implement important social tasks related primarily to environmental issues, but altruistic business in Russia is not very popular ... The only serious non-profit organization is the Our Future Foundation for Regional Social Programs, founded back in 2007 by Vagit Alikerov. The main mission of the foundation is to help people create a business whose fate you cannot envy - these are widows, single mothers, disabled people, war veterans and all those who, for objective reasons, need help, and even more so at the beginning of their entrepreneurial activity.
The motives of a businessman who decide to create a commercial project with a social focus can be very different:
1. Desire to make this world a better place. Quite vague motivation, but nevertheless, it confirms its high performance. Many American and British entrepreneurs are truly making the world a better place by raising the level of education of the population, improving the living conditions of those in need, and implementing important health projects. At the same time, they may not receive immediate benefits, but they form a positive image of a “capitalist with a human face,” a kind philanthropist and, in general, a good person. Incidentally, this approach is the best PR in a political career.
On September 25, a meetup was held on the topic "Modern models of social entrepreneurship" with Daria Bolshakova, Development Director of the Gladway Media Projects and Social Programs Development Fund, project manager of the Grand Prix Advertising Research Center, editor of the Atprint social advertising media library. u, editor of the portal "Bank of Social Ideas".
Social entrepreneurship is talked about more and more often, and the more difficult it is to give an unambiguous definition of what it is. In Russia, in November 2013, the State Duma considered the introduction of the term “social entrepreneurship” into the law “On the development of small and medium-sized businesses in the Russian Federation”. And while changes are underway at the legislative level, the Our Future Foundation for Regional Social Programs offers the following definition:
"Social entrepreneurship is an entrepreneurial activity aimed at mitigating or solving social problems."
Social entrepreneurs create a unique business model whose profits lie in increasing social good. Unlike business with corporate social responsibility (CSR), where only part of the profit is directed to solving a social problem.
Meetup participants. Photo: Maria Borisenok
You can read about the diversity of forms of social entrepreneurship in our translation of an article by Chris Warman. It is important that all forms are characterized by the same signs (source - Fund for Regional Social Programs "Our Future").
Social impact - targeting/mitigating existing social problems, sustainable positive measurable social results.
Innovation is the use of new and unique approaches to increase social impact.
Self-sufficiency and financial sustainability - the ability of a social enterprise to solve social problems for as long as necessary, and at the expense of income received from its own activities.
Scalability and replicability - increasing the scale of the social enterprise (nationally and internationally) and disseminating experience (model) in order to increase social impact.
In the summer of this year, social entrepreneurship (SP) received an official status in Russian legislation and was singled out as a separate area of small and medium-sized enterprises (SMEs). The activity of a social enterprise is also legislatively fixed.
According to the new version of the law "On the development of small and medium-sized businesses in the Russian Federation", initiated by the Ministry of Economic Development of the Russian Federation, such a business is aimed at employing socially vulnerable groups (people with disabilities, orphans, pensioners, refugees, migrants and etc.), the production of goods (works, services) for such categories of citizens, the achievement of socially useful goals.
According to Olga Zakharova, Deputy Director General for New Projects Promotion of the Agency for Strategic Initiatives (ASI), there are currently about 70 thousand enterprises in the country that potentially meet the criteria of a social enterprise. The exact list of companies with this status in the Unified Register of SMEs should appear already in April 2020.
It is important not to miss the deadline for submitting documents for inclusion in the register established by law - until March 1, 2020, says Natalia Zvereva, director of the Our Future Foundation. In the future, according to her, this will give social entrepreneurs the opportunity to receive state support.
Social business, like any other, grows out of solving specific problems of consumers, but at the same time it solves the problems of socially vulnerable categories of the population. Sometimes it is even born out of charity, says Olga Zakharova: "This is a kind of evolution of charitable projects - financially sustainable projects aimed at solving social problems."
Social entrepreneurs are the most active part of the community, says Anna Burashnikova, project manager of the Center for General Academic Educational Initiatives of the Institute for Organizational Development and Strategic Initiatives of the Russian Presidential Academy of National Economy and Public Administration, Anna Burashnikova: "They see problems in the community and are ready to take the initiative in solving them." But this is by no means charity, she notes.
The strength of social entrepreneurship is the search for non-standard business models and mechanisms, says Alexandra Moskovskaya, director of the Center for Social Entrepreneurship at the Higher School of Economics, in an article in the World of Social Entrepreneurship magazine (2019). At the same time, enterprises of this type are distinguished by high commercial stability, a level of optimism and an increase in sales volumes, she refers to the experience of Great Britain, where state support and statistics on the development of the joint venture have been conducted for more than ten years.
The beginning of the institutionalization of social entrepreneurship in Russia is associated with the foundation in 2007 by the head of LUKOIL Vagit Alekperov of the fund for regional social programs “Our Future”. The Foundation still provides grants and interest-free loans to social projects. In 2012, the HSE University notes, the term “social entrepreneurship” first appeared in federal regulations.
The entry into force in 2015 of the Law "On the Basics of Social Services for Citizens" (442-FZ), aimed at developing the non-state sector and competition in the field of social services, became another incentive for the joint venture.
The current stage of social business development, according to Alexandra Moskovskaya, is associated with a deeper understanding of the "sociality" of business - not through industry affiliation, but through the social purpose of the enterprise (where the profit is directed, what benefits are received by target groups, where are target groups in the chain of goods produced by the joint venture) and lays the foundation for the flexibility of its regulation.
We often hear about social entrepreneurship, but do not fully understand what it is. Sometimes it is confused with the vague phrase "social responsibility of business", which officials like to mention in their speeches. Is building an effective company and charity compatible? Can you make money by solving social problems? The Impact Hub has been operating in Moscow for five years, a platform designed to bring social entrepreneurs together and help them develop their projects. Together with her co-founder Yekaterina Khaletskaya, the "Workshop" figured out the topic.
Social entrepreneurship is a way to solve social problems through business. This concept works in a variety of areas - helping people with disabilities, education, ecology, animal protection and many others. “Of course, there are examples where entrepreneurship is impossible: a hospice can only work for charitable money and there is no mechanism for earning money there,” says Ekaterina Khaletskaya, co-founder of Impact Hub Moscow. "But overall, a charitable idea will be more sustainable and can last longer if a business model is invented for it."
When a social entrepreneur creates his business project, he focuses not on profit, but on an efficiently working model. The main thing here is not earnings, but social returns. “Money is just a mechanism to include your target group in the economy. If a foundation helps people with mental disabilities financially or provides free carers - this is one thing, but when these same people are involved in work, it gives a completely different result. Their wards become real members of society, included in everyday life, ”explains Khaletskaya.
Social entrepreneurship has not yet become mainstream. Globally, less than 3% of the population is employed in this area. In Russia, a new initiative is often confronted with a misunderstanding: is it possible to earn money in the social sector and how to maintain an ethical and financial balance at the same time? “When people see our projects, they cannot always understand that these are the sprouts of a new economy. Many believe that it is impossible to create a successful business project in this area, - says the co-founder of the center. "To convince people otherwise, we show how charitable initiatives can make money."
A charity store that sells used brand name clothing at discounted prices. The profits from the sale of goods are used to pay the rent for the store and the salaries of employees, the rest of the funds are donated to charity. Today in Moscow there are more than 30 reception points and four stores where anyone can leave their unwanted clothes.
An open space in St. Petersburg, where adults with mental disabilities, together with professional mentors and volunteers, work in ceramic, graphic, sewing, culinary and carpentry workshops. All manufactured goods can be bought in the project shops and some cafes of the city. This year, "Simple Things" are planning to open their own inclusive cafe.
An online service where users help stray animals from shelters across the country. In real time, they can observe cats and dogs, feed and care for him remotely through intermediaries, paying for all services with special points. When the selected service is provided to the animal, the user will receive a report on the funds spent.
Special attention has been paid to the development of social entrepreneurship in recent years. Despite the fact that there is still no definition of this term as such, this phenomenon has existed for several decades. In Russia, however, only now, on the initiative of the Ministry of Economic Development, they began to create centers of innovation in the social sphere.
Social entrepreneurship is a business aimed at solving social problems. Making a profit for the purpose of business development is not a fundamental criterion for the success of a project. But the solution of pressing social issues is precisely the criterion that assesses how successful the project is.
Revival of cultural traditions, employment of vulnerable groups of the population, socialization of disabled people - all this forms the basis of social entrepreneurship.
The boom of social entrepreneurship is happening now in connection with a new approach, when entrepreneurs are trying not only to build a business, but also to help people solve some acute social problem. Making a profit is not in order to enrich yourself, but in order to help the project develop further and help more and more people.
A social entrepreneur solves certain social problems through his activities. If there is a business, but there is no problem, it is just business as usual. And when business solves a social problem, this is social entrepreneurship.
The socially significant types of small business include the following:
1. Organization of employment for disabled people. Job creation for people with disabilities is one of the types of social entrepreneurship. For example, a man from Ufa received a grant to develop a wheelchair repair workshop. The state supports such programs, firstly, because additional jobs are created for people with disabilities, and secondly, because such workshops allow saving the state budget.
2. Environmental business. Activities related to the improvement of the ecological situation.
Problems and prospects for the implementation of investment projects (on the example of the Arkhangelsk region) Heading: 9. Finances, money and credit Date of publication: 06. 1.013 Article viewed: 1425