Social entrepreneurship is becoming the gold standard in nonprofit management for several reasons. One, social entrepreneurship does not preclude profitability or sound strategic management. This attracts investors in ways that traditional nonprofits cannot do. Second, social entrepreneurship extricates itself from the entanglements with government, philanthropy, politically problematic or faith-based fundraising (Stecker, 2014). Third, social entrepreneurship has staying power, allowing the social enterprise to better weather economic downturns or penetrating new markets and regulatory environments (Stecker, 2014).
Because by definition, a social enterprise is managed using evidence-based and proven business principles, it is a more attractive investment. A social enterprise can freely “generate revenue to ensure financial viability,” in ways traditional nonprofits cannot do (Stevens, Moray & Brunel, 2014, p. 1051). The social mission is not secondary; it is still primary to the operations strategy. However, the social mission is promoted and sustained through effective strategic management and operations.
Social enterprises also have global reach and potential. The social enterprise can easily navigate new markets and address similar social justice or environmental causes. Traditional nonprofits are therefore starting to adapt the principles and practices of social enterprises, especially when directing resources to niche groups or micro-causes that might otherwise go unrecognized. The potential to make a difference and create meaningful change is enhanced when using a social entrepreneurship model. Far from being a fad, social entrepreneurship is bound to become standard practice as investors, employees, and consumers demand more from the public, private, and nonprofit sectors. The key to social entrepreneurship remains financial sustainability, ultimately the reason why the trend is becoming fully entrenched in the business community and government too (Osbert & Martin, 2015).
References
Osberg, S.R. & Martin, R.L. (2015). Two keys to sustainable social enterprise. HBR. May 2015. Retrieved online: https://hbr.org/2015/05/two-keys-to-sustainable-social-enterprise
Stecker, M. J. (2014). Revolutionizing the nonprofit sector through social entrepreneurship. Journal of Economic Issues, 48(2), 349–358.
Stevens, R., Moray, N. & Bruneel, J. (2014). The social and economic mission of social enterprises. Entrepreneurship Theory and Practice 39(5): 1051-1082.
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