Doing good -- not just well

09/22/02
Brigham Young University
By By David M. Brown Printed in the Deseret News

It is estimated that two-thirds of the world's population struggles to exist at or below the poverty level. Even in America, every major metropolitan area has a large number of citizens living at the bottom of the economic pyramid. These 4 billion people are viewed by most of society as an overwhelming problem, but to the social entrepreneur they are a massive opportunity.

Social entrepreneurs are a rare breed of individual who use capital to achieve a higher goal of providing food, clothing, shelter or education to the underprivileged. The social entrepreneur has all of the characteristics of the classic entrepreneur, which include vision, ability to attract resources (capital, labor, equipment, etc.), innovation, high tolerance for risk, ability to deal with ambiguity and business discipline.

However, the social entrepreneur differs in one major way -- his primary focus is his absolute determination, even passion, to be a change agent in creating and sustaining social value rather than creating wealth. The social entrepreneur is measured on a "double bottom line," both a financial and a social return. He must be fiscally responsible to sustain his enterprise, but his passion, and the measurement of his success, is to do good, rather than to just do well.

Many social entrepreneurs function in the not-for-profit sector of our economy, which contributes some $600 billion a year to the U.S. economy. Examples of not-for-profit ventures are food banks, charitable foundations, shelters for the homeless and battered women, legal aid, etc.

Other social entrepreneurs are employed by large for-profit corporations that also are committed to social change. Microsoft and many other high-tech corporations, for example, have been involved in "venture philanthropy" for decades, giving or selling deeply discounted computers and software to public schools, universities and inner-city social service centers. They also benefit in a major way when these students later become customers.

CEMEX, one of the largest for-profit corporations in Mexico, has enabled 20,000 very poor families to purchase building materials and upgrade their homes without receiving any subsidies. This program provides increased revenue for CEMEX while social sector organizations receive the resources they need to implement innovations that address society's most pressing problems.

There are many examples of wealthy individuals and large corporations providing "microcredit" loans to poverty-stricken people in Third World countries. These loans may finance the purchase of a sewing machine, or a grill to cook hot dogs on the street corner, or a computer to provide services to others, or a cell phone that can be "rented" to others.

Whether the social entrepreneur works with a for-profit or not-for-profit entity, the focus is on making the world a more humane place in which to live and helping those in need to care for themselves and others. He recognizes that the human resource possesses the greatest potential to change society.

Are you that special breed of entrepreneur who looks beyond the profit motive and is not content to just give a man a fish, but is determined to teach him how to fish? In fact, do you want to revolutionize the fishing industry? If so, you can be a social entrepreneur.

author1 is associated with the BYU Center for Entrepreneurship. He can be reached via e-mail at Mr. Williams is associated with the BYU Center for Entrepreneurship. He can be reached via e-mail at cfe@byu.edu. .