Social Entrepreneurs on the Hybrid Spectrum

ll organizations are located on a spectrum with on the left hand side the traditional non- profits, and on the right hand side the traditional for-profit. In between one finds on the one hand non-profits with commercial activities that generate economic value to fund social programs, but whose main motive is to generate social impact. On the other hand are for-profit entities that create social value but whose main motives are profit-making and distribution of profit to shareholders.

Looking at the hybrid spectrum, a social enterprise is any business venture created for a social purpose – mitigating/reducing a social problem or a market failure – and to generate social value while operating with the financial discipline, innovation and determination of a private sector business.

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All hybrid organizations generate both social and economic value, and are organized by degree of orientation, goal and destination of profit.
 

Non-Profit

Hybrid

For-Profit

Orientation

Mission driven

Mission and market driven

Market driven

Goal

Social value creation

Social and Economic value creation

Economic value creation

Destination of profit

Directed toward mission activities of non-profit organizations (required by law or organizational policy)

Reinvested in mission activities and/or retained for business growth and development, limited distribution to shareholders

Distributed to shareholders

We found some video’s that might interest you:

TEDxYouth@Toronto
How to start a social enterprise. Six steps. Greg Overholt is confident that Social Enterprises can tackle many of the challenges of today’s world by leveraging commercial principles to maximize social impacts. In his talk, he presents 6 tangible steps on how to start and grow your social enterprise by sharing his story of starting his organisation.

Video 1: Five keys to success for social healthcare entrepreneurs: Lluis Pareras at TEDxBarcelonaChange. From this approximately 8-minute TEDtalk, we especially remember the quote: “We investors don’t invest in ideas, we invest in the execution of ideas.”

Video 2: Michael Porter: Why business can be good at solving social problems. Tedtalk. Get a for-profit entrepreneurs view Michael Porter wonders why we turn to nonprofits, NGO’s and governments to solve society’s biggest problems? Michael Porter admits he’s biased, as a business school professor, but he wants you to hear his case for letting business try to solve massive problems like climate change and access to water. Because when business solves a problem, it makes profit – which permits that solution grow. Don’t get us wrong, we don’t want to privatize common goods! But if you want a full understanding of what’s going on in the world od social challenges, you have to learn about all different perspectives.