Social Entrepreneurship in the New York City
Introduction
The successful implementation of social entrepreneur skills relies on the collaboration of three
sectors of the economy which includes the government, business and community focused
activities. The process of social entrepreneurship and its strategic goals for improving social
welfare of the society harnesses a variety of capacities across different sectors which helps
facilitate the initiation and maintenance of the activities.
They have to remain alert to the opportunities for strategic alliance with other segments of
society. Social entrepreneurs are evidenced to benefit the economy since they have been able
to mobilize aspects of public and private sectors as well as non-profit organizations in
addressing market failures. Their innovative skills are known pull mass crowds of both local
and international interest in influencing change and providing fertile ground for the growth of
their enterprises.
To effectively discuss how social entrepreneurship contribute to social cohesion and
sustainability development, the essay will candidly discuss how their initiatives address market
failures, transform innovations and financial their sustainability. To arrive at this conclusive
analysis, the essay was based on literature review, interviews with top social entrepreneurs,
consultations as well as popular and academic resources from both profit and non profit
organizations, public polices and scholarships from reputable social entrepreneurs. The social
entrepreneurship is rapidly finding its way into media houses.
Many describe them as engines for social innovation that bring about change and influence the
environmental outcomes. These descriptions formed a basis for the social entrepreneurship
evaluation in the context of America Society and highlighted relevant key issues, practices and
standards required for their entrepreneurship. While the focus of these essay is primarily on
social entrepreneurship issues, its important to note that collaboration of private and public
sectors and as well as community activities are all relevant to ensuring sustainability
development. Since social entrepreneurship is still an emerging field with diverse and shifting
interpretations, the essay will introduce major players that have contributed to sustainability
development in the New York State and the United States as a whole.
Social Entrepreneurs
Ashoka (2010) describes social entrepreneurs to be “people with ambitious and persistence
skills in tackling major social issues that offer new ideas for wide-scale change”(p.1). They
take proactive approaches in trying to change the system and provide solutions to societal
problems by mobilizing the entire society to take the leaps. Their initiatives focus on solving
the societal issues rather than leaving the issues to the government or business sectors. He also
defines them as mass recruiters with ethical skills and have the ability to mobilize people to
stand up for their ideas and implement them.
Social entrepreneurship use market-driven business model in addressing key environmental
issues and critical social needs. They take full responsibility of their project initiatives as they
don’t rely on government shifting focus. Ashoka (2010) also states that these kind of
entrepreneurs “ have the ability to grow to meet needs and priorities of the communities it
serves, as opposed to public sector limited to funds provided by the government” (p.1).
His definitions fits bigger concept of societal innovations as it broadly describes them as
entrepreneurs who provides solutions that are effective, efficient and sustainable to solve the
society social problems. The definitions are not limited to enterprise based approaches to
solving critical issues but also a social enterprise for social innovation. It should however be
noted that social enterprise is not about balancing the double standards of profit and social
impact but to obtain community sustainment projects (Ashoka, 2010).
Despite minimum support from the government and local volunteers, there seems to be general
agreement among the supporters of social entrepreneurship as to its key underlying goals and
their consequences for societal change. Social entrepreneurship innovative and interpretive
approach to societal problem has gained world wide recognition mainly from media houses
and policy makers, as a significant contributor to a country’s economy and to represent
distinctive part of the country’s social and economic activities.
These supporters deem to be building a perfect example of government and corporate bodies’
involvement in social activities. The United States government for example government
supports social entrepreneurs by allocating about $1 trillion every year to federal funds
dedicated to solving social issues. The monetary support may not be enough in the long run
since these organizations always desire for capital to develop their activities. Wolk (2004,
p.151) in his statement argues the government to form an alliance with social entrepreneurs to
generate transformative and cost-effective solutions to the most challenging social problems.
Incorporating new ideas from experts in the field of social entrepreneurship provides a fertile
ground for young and upcoming entrepreneurship growth by identifying present change in a
social economic environment. In evaluating the benefits of social entrepreneurs in our society,
it’s important to determine who social entrepreneurs are, how they benefit the government as
well as private and public businesses and what the government is doing to support them
(Simons, 2000, p.4).
The emergence of social entrepreneurs
Since the focus here is on the how social entrepreneurs has influenced the economy and
provided solutions to societal problems, three stages of responding to societal needs can be
identified. These stages, which correspond very closely with Roger and Osberg (2007, p.30)
include; a) market failures b) transformative innovations and; 3) financial sustainability. To
determine how social entrepreneur emerged as nexus from these factors, it’s important to
establish how it helped the government and improved the lives of public official constituents.
Although different aspects of social entrepreneur appear in all parts of the essay, case examples
illustrated throughout the paper help us understand how social entrepreneurship leverage public
and private resources, test and implement solutions to social by highlighting a number of
successful social entrepreneur initiatives (Wolk 2004, p156).
It was also realized that the triangulation of three sectors of the economy that consisted of the
government, private and public sectors acts as viable transport for innovation. However, there
appears to be a particular issue with regard to collaboration between social entrepreneurs and
the government. Their relationship has proven elusive and largely fruitless in resolving social
problems, transforming and implementing financially stable solutions. In order to enhance
functional relationship between these sectors, Martin and Osberg (2007, p.30) proposes for a
more rigorous approach of government involvement in social entrepreneurship that would later
boosted the economy (Martin& Osberg, 2007).
It’s quite unfortunate that the government has made little efforts in support of social-
entrepreneur initiatives. There has been growing consensus about government involvement in
social entrepreneurship initiatives with many speculating on their significant contribution.
Wolk (2004) mentions some of the strategies government has put in place in support of social
entrepreneur innovative and interpretive approach to include; 1) helping heighten their success
2) reward their performance 3) create supportive environment for innovation 4) encourage
them to innovate and; 5) offer knowledge through published reports and data to help them solve
problems (Wolk, 2004, p157).
History of Social entrepreneurship
According to Organization for Economic Co-Operation and Development (2006), quite a
majority of Americans live in poverty with about one quarter of the adults failing to complete
high school. The country’s health sector was also reported to have ranked 37 in the world’s
health review which was equivalent to status of a developing nation. These declines in both
economic and health sectors has increased the need for social entrepreneurship and its promises
as a means of addressing daunting social needs. Given the magnitude of needs the economy
has, the U.S government for this case is required to inject large sources of funds from federal
reserves, local government and the state to help solve these problems.
In attempting to fill this gap, Wolk (2004, p.155) proposes that the government should look
into the social entrepreneurship assistance for now ideas. He adds that the collaboration
between the two sectors will effectively identify societal needs and provide viable solutions to
the problems. His proposal throughout the essay attempts to define what social entrepreneur is
based on case studies and expert ideas and breaks the new ground in exploring new ways in
which government leaders as well as other constituents are benefiting from their efforts.
In today’s dynamic economy, there’s nothing as powerful as new ideas. Shoka (2010) quotes
more historical examples of social entrepreneurs to include “Susan B. Anthony (U.S.): Fought
for Women’s Rights in the United States, including the right to control property and helped
spearhead adoption of the 19th amendment” (p.1). He also mentions Vinaba Bhave founder of
the Land Gift Movement and the Italian social entrepreneur Dr. Maria Montessori founder of
Early Childhood Education among others (Ashoka, 2010).
In 2007, President George W. Bush acknowledged a variety of social entrepreneurs who have
helped the American society achieve a competitive age. Among the honored guests were Julie
Aigner-Clarke, founder of the Children Video Company and Baby Einstein producer of the
Child Safety Video. In his statement, president Bush (2007) acknowledged Julie’s efforts by
stating that
Julie represents the great enterprising spirit of America. And she is using her success to help
others….we are please to welcome this talented business entrepreneur and generous social
entrepreneur (p.1).
The president’s exploration of creative tasks delineateb by social entrepreneurs towards
community development applauded their efforts in responding to market failures, creating
transformative and financially sustainable innovations aimed at solving social problems.
Popular media has not been left behind on recognizing social entrepreneurs in our society. A
variety of media personalities for example have tried to redefined the term social
entrepreneurship to a greater household name. The Economists, Harvard Business Review, The
New York times among others have echoed this sentiment in an attempt to assess social
entrepreneurship achievements by publicizing their efforts.
According to Schumpeter (1982), markets exhibit a range of entrepreneur characteristics that
include innovative, risk-taking and large scale transformation. People deemed to possess these
characteristics were recognized in the 2006 U.S News and World Report to include Wendy
Kopp, founder of Teach For America, Michael Brown and Ali Khazei, founder of City Year
among others. Also included in the category were Grameen Bank, a Nobel Peace Winner,
Victoria Hale, founder of OneWorld Health Institute and Jim Fructerman from the MacArthur
Foundation (Wolk, 2004, 6).
Some historic examples of social innovators that changed the American social landscape are
also mentioned by Wolk (2004) to include Florence Nightingale of the 1800s foundation of the
modern field of nursing and Horace Mann, founder of public education. Wolk (2004) studies
argue that a social entrepreneur represent a distinctive part of a country’ social and economic
life and the United Stated for this case has gained tremendously. American entrepreneurship
can be traced within the context of changes that have taken place since 1980s.
The first entrepreneur recognized during that time was Edward Skloot who founded a non profit
consulting firm interested in creating business ventures. His work was published in Harvard
Business Review in 1983 as “nonprofit entrepreneurship” (Skloot, 1983, p.22) as a description
of business ventures that diversify nonprofit organization funding streams. Bill Drayton
founder of Ashoka came into play in 1981 as an Innovator for the Public to seek, support and
publicize public entrepreneurs. Pater Drucker of the management expert book was recognized
in 1985 among the first entrepreneurs to describe a phenomenon that extended into multiple
sectors (Battle& Dees, 2006, p.150).
Towards the mid 1990s social entrepreneurs began to gain new meaning as many scholars and
presses described them as anyone who started a nonprofit organization, or any business man
who integrated social responsibility into their operations. Here, social entrepreneurship is
described broadly to include a variety of organization structures and activities within the social
entrepreneurship context. Wolk (2004) argues here that social entrepreneurship stems from
initiatives that tend to exhibit the characteristics of innovations and risk taking.
He mentions various examples of social innovators throughout his research in illustrating how
entrepreneur initiatives act as seedbeds for development for non profit organizations, for profit
organizations and rather government programs. For this reason, it’s important to explain the
threes sectors in both social and economic perspective of an American economy by describe
their specific roles and responsibilities of in social entrepreneurship.. Below is an illustrated of
how social entrepreneurs have benefited the society within the context of public, private and
voluntary organizations and a description of trends that have eliminated the boundaries
between these sectors (Wolk, 2004, p.158).
Private Sector
Building capacity for societal change and fostering the social innovation requires full
participation of private and public sectors as well as voluntary organizations. A private sector
is defined by Wolk (2004) as “organization that incorporates activities of small business,
corporation and enterprises in utilizing market exchange for goods and services while
maximizing their profits” (p.158). Their strategies to foster development of social enterprises
and social entrepreneurship drive innovation and productivity into the economy.
Economists have long identified innovation as one of the major contributors to private sectors.
A former 1900s scholar Joseph Schumer once commended in Milton (1982) that “Further
contemporary economist Milton Friedman has argued that free markets, competition, and
consumer choices are also essential components of capitalism” (p.50). According to Wolk
(2004) reports, private sectors in the U.S economy represent approximately $13 trillion a year
in gross domestic product ranking the country top among the world’s largest economy.
This sector is also reported to be the major contributor to the country’s work force with 115
million employees currently working in private organizations. The public sector on the other
hand consists of about 87,900 government units with $4.3 trillion in earnings with 18 million
employees, while the non profit sectors contributes about $1.4 billion in revenue with 9.4
million employees and consists about 1.4 million organizations. The alliance between the three
sectors in carrying out social entrepreneurship has been credited to improve availability of jobs,
stimulate innovations and build wealth for the nation (Wolk, 2004, p.160).
Public Sectors
The public sector in support of social entrepreneurship is mentioned by Wolk (2004) to include
the following activities; 1) addressing inequalities in the markets by helping families living in
poverty by providing unemployment benefits and measurements for disaster assistance; 2)
providing public facilities such as policing, public defense, education and libraries to the most
needy in the society. In relation to market failure perspective, it seems complicated to define
the relationship between public sectors and social entrepreneurship as the services provided are
more than what the public is willing to pay for.
Social entrepreneurship distinctly addresses market failures since they are not profit oriented
and address the un-met public needs. The government role in re-distributing services to address
market failures is another way of contributing to social entrepreneurship. Its support of private
sectors in providing goods for the public helps address market inequalities and foster
environment for initiative development. Although a lot has been done to support these
initiatives, the government continues to face pressure in allocating resources to meet all the
societal needs (Wolk, 2004, p.161).
Non Profit Sectors
Non profit sectors have been traditionally known to engage in a variety of activities that support
social goals. Perfect examples of such organizations include private hospitals and schools,
religious organizations, and social service providers. Nonprofit sectors efforts in support social
activities are recognized when both private and public sectors have failed to meet particular
social needs and since they can not distribute the profits to their leaders, these sectors are placed
at a better position to use their revenues to sustain growth and grow their organizations.
Although they are by far the smallest sectors, nonprofit organization are known to be the fastest
growing organizations. In 1994 for example, the nonprofit organization were reported to have
doubled in number with almost 65 % growth rate which added up to 10.5% of the country’s
work force (Wolk, 2004, p.161).
Nicholls (2006) a scholar from Oxford university defines social entrepreneur to include both
multi-dimensional and dynamic construct of the economy rather than their organizational form.
All the three sectors play distinctive roles in resolving societal needs by ensuring public needs
are met. However, several trends have continued to emerge within the social entrepreneurship
spectrum bridging the gap between these sectors hence creating conducive environment for
social entrepreneurs to emerge and grow.
In private sectors for example, businesses and employees are increasingly engaging in activities
previously regarded as non-profitable as many have started engaging in educational and social
projects providing companies’ opportunity to offer services that could not have been considered
in the first place or regarded as government activities (Light, 2003). Osborne and Gaebler
(1993) journal reports states that, between 1999 and 2002, the U.S government reported to have
awarded about 700,000 contracts in federal funds to private enterprises and the public sectors
seem to have also shifted their focus from maximizing profits to engaging in social activities.
According to Goldsmith and Eggers (2004), the government engages in social enterprises by
offering opportunities to public enterprises to privatize their firms which call for business ethics
in turn promoting more competitive business environment. Private sectors have also increased
demand for efficiency and accountability and bridged the gaps in public sector delivery and
created public sector responsibility.
Goldsmith and his colleague also argue that social entrepreneurs have increased efficiency in
government funds as they only inject resources to market demands and increased preference
on issues ranging from public utilities to public schools. Government’s strategy of
monopolizing public sectors and reliance on private sectors in managing contracts and
allocating funds has greatly increased social responsibility and helped fill the gap in public
service delivery by ensuring the best services are provided (Goldsmith and Eggers, 2004).
Response to Market failures
As already discussed, social entrepreneurs characterized by their ethical skills are able to
identify to market failures and commit their resources to affect to the neediest in the society.
Because private sectors or even the government are unable to generate enough profits to
respond to these problems, these sectors bridge the gap by finding market opportunities and
maximizing their potential. Under normal circumstances, the government would try to address
the unmet needs by deploying public funds into the sectors, which has already been proven
futile in the long run. Social entrepreneurs in this case present viable options for addressing
market failures by seeking opportunities to create value rather than economical benefit.
Gregory Dees, founder of social entrepreneur argues that market approach to market
evaluations on social improvement do not adequately identify harms for people who cannot
afford to pay for the service and social entrepreneurs presence would distinctly cater for the
economy’s needs (Battle&Dees, 2006, p.160).
Social entrepreneurs insight exploration of societal problems have the ability to provide
transformational benefit that targets education and employment activities as well as the
marginalized areas that would have never been considered by the government. Wolk (2004)
categorizes market approaches into three broad perspectives that include; “no market approach,
limited market and low-profit market approach in targeting beneficiaries and responding to
market failures” (p.168).
He identifies no market approach as a social entrepreneurship strategy that offers products and
services to its potential beneficiaries without requesting for any payments. So this could mean
that the organization depends entirely on its own funding to sustain the initiatives. Limited
market approach on the other hand required beneficiaries to pay partial of the costs so sustain
the project activities, a common trend exhibited in non-profit organizations. He explains low-
profit market approach to require full payment of goods and services obtained as illustrated in
most private organizations that have the potential of generating profits (Wolk, 2004, p.168).
Transformative Innovations
Social entrepreneurs are described by many scholars as change agents, creating systematic
change by introducing new ideas and persuading others to adopt, changing social patterns that
create social problems through breaking patterns. In transformative perspective, Bill Drayton
defines social entrepreneurs as creative thinkers continuously striving for innovations.
Transformative ideas can be seen through the invention of new technologies, methods of
production, supply sources and distribution outlets and social entrepreneurs have for this case
taken these innovative approaches further by devising strategies that have benefited the whole
society (Ashoka, 2010). Social entrepreneur have been evidenced to combine their own
innovative skills, research obtained from public sources and political influence in attaining
their goals. Their ability to involve major players in the entrepreneurship activities character
sets them apart from the traditional profit oriented organizations (Wolk, 2004, p.20).
Financial Sustainability
Market analysts urge private organizations and business to should try and find a model that
responds to their unique characters of their social problem. Wolk (2004) statements stressed
organization to obtain their own financial sustainability that will cushion them through the hard
economic times and engage in social reality projects that prefer productivity and efficient
management of their resources. He argues that businesses that adopt this approach often report
good report results on organizational performance and cost benefit returns on investment.
These organizations are also required to integrated financial and programmatic initiatives into
business activities to effectively capture organization problems and maximize their profits
(Wolk, 2004, p.170).
Non-financial Resources
Non-financial resources also known as volunteers are social entrepreneurs deemed to posses
both skilled and unskilled education and may at one time rely on donations to increase the
sustainability of their initiatives. These volunteers engage in public activities that develop and
implement social solutions like the Hurricane Katrina volunteers that came out in large
numbers to complete intensely needed work in a way the government could have never afforded
by themselves (Wolk, 2004, p.171).
Social entrepreneurs in New York State
Social enterprise is a new breed of entrepreneurship that exhibits the characteristics of
innovation, risk taking and large-scale transformation. They have provided a fertile ground for
young and upcoming entrepreneurship growth by identifying present change in social
economic environment. On New York perspective, the practice of responding to market failures
with transformative, financially sustainable innovations aimed at solving societal issues is
advancing at pace that exceeds comfort zone causing the government to suffer substantial
losses in funding charitable organizations. Although there exist a variety of projects within the
New Yolk state that seems to address serious challenges faced by the society, local businessmen
and social entrepreneurs are called upon by the State’s comptroller to mobilize their efforts in
implementing solutions that will lower administrative burdens and improve state’s
accountability and oversight (Dinapoli, 2010, p.1).
Some of the State’s initiatives that include youth programs, education services and arts council
are currently being threatened by the economic downturn and social entrepreneurs are for this
case trusted to have the potential for transform the social innovations. Dinapoli (2010) gives
us a perfect example of a successful community-based initiatives that have helped stimulate
the economy by illustrating the 2006 human service organizations social entrepreneurship
initiative that reported revenues of $132.9 billion in over 24,000 NFPs and provided nearly 1.2
million jobs which contributes to about 17% of the States work force. While in June 2009, the
State was reported to have had 31,000 contractors with NFPs totaling to $14.6 billion (Dinapoli,
2010, p.1).
New York State has also been facing serious issues in regard to increased demand for goods
and services resulting to increase pressure on the State’s budget. For example, between 2008
and 2009, the State’s unemployment rates increased from 5.8% to 8.9% simultaneously and
rose from 6.0 % in 2008 to10.3% in 2009 in the New York City. The overwhelming numbers
of dependable people increased the number of people receiving food stamps by 17.5% between
January and October the same year. The State continues to struggle with program funding as
more households continue to seek assistance of all types.
Dinapoli (2010) mentions other States deficit that might have increased pressure on demand
for goods and services to include; the Home Energy Assistance Program (HEAP) increased
deficit of 36.3 percent between 2008 and 2009, the State’s budget deficit of $4.1billion for the
fiscal year 2009-2010, and the projected deficit of more than $23 billion expected to hit through
SFY between 2011 to 2011. Charitable activities have also reduced their contributions to social
activities and private corporations and philanthropic organizations no longer provide
significant funds to finance societal services (Dinapoli, 2010, p.2).
Contracts Delays and Late Payments
Quite a number of not for profit (NFPs) organizations receive funding from the State through
contract allocations. According to the Office of the State Comptroller (OSC) of New York State,
about 87% of state contracts in 2009 were reported to have been delayed as a result of the
economic downturn. These delays forced NFPs to perform activities without any payments
hence resulting to increased borrowing to finance their projects. Dinapoli (2010) reports
indicated that about 69% of NFPs resorted to borrowing due the delayed government contracts
and payments. This gap can be bridged by businesses involvement in community initiatives
that require social enterprise participation (Dinapoli, 2010, p.4).
Social entrepreneurs have been identified to present change in social economic environment
by engaging businesses in their activities. Social entrepreneurs for this case involve players
such as volunteers and not for profit organizations in meeting social needs. Some of the inherent
benefits of including community activities in social entrepreneurship include full utilization of
human resources, increased diversity which reduces intercultural conflicts among community
members, enhances work relationship based on mutual respect and increased knowledge of
multicultural issues. It is also argued that community involvement Increases commitment
among diverse cultures and across all functions, increases community participation in key-
decision making and problem solving and improves productivity and reduces energy spend in
solving cultural clashes (Chase, 2000, p. 12; Simons, 2000, p.4).).
It’s important for users, service providers, the community and the government to stay ahead of
the societal challenges. Policy makers in this case require the public to take active roles in
providing innovative ideas to handle these changes. Chase (2000) requires the integration
between society and the economy in evaluating societal needs and the attainment of certain
social and economic goals. Chase (2000) definitions of social entrepreneurship are not aimed
at describing functions of social entrepreneurs but rather as effective instruments for combating
social problems and vehicle for social cohesion.
He defines social entrepreneurs as nonprofit agencies that maximize their mission-related
performance through development of new ventures or by reorganizing existing activities to
improve operational effectiveness. For profit companies that are involved in social activities
can also be referred as social enterprises embedded in social purpose. Non profit can be linked
to a wide range of foundations, associated organizations and organizations that operate outside
the parameters of common markets (Chase, 2000, p.12).
Although little research has been done on nonprofit organization from social entrepreneurship
perspective, Wolk (2004) recognizes them as powerful tools that have revitalized otherwise
deprived areas, communities and localities and produced services that are not being produced
by mainstream commercial enterprises. Ashoka foundation illustrates a perfect example of
social entrepreneurs that have become leaders in social change by providing sources through
inter-sectoral resources without limiting themselves to traditional charitable models.
Social entrepreneurs and nonprofit organization seem to be categorized in the same model of
community service as they both possess common themes in addressing complex social needs
in effective and integrated ways and regenerating communities’ needs. Another common
characteristics exhibited in these two organizations includes their ability to recognize the
society’s need for an incubation period, allows new ventures to mature, undergo rigorous
ongoing assessment to maximize outcomes and identify needs, support and develop them
(Simons, 2000, p.4).
To understand how social entrepreneurs contribute to the society. Three factors keep
reoccurring throughout the essay. First, social entrepreneurs have a capacity to be a leader in
the social field change which is achieved by their ability to break social reforms and design
innovative programs. Second, their rigorous approach in maximizing societal changes and
outcomes. And third, their ability to take outstanding or emerging social problems. The ability
to collaborate, challenge and support community initiatives in reference to the community,
business and government activities achieves them higher in the society (Simons, 2000, p.4).
Challenges often faced by social enterprise are their inability to collaborate all the three sectors
into long-term and strategic objectives of innovation, research and capacity building. All the
three sectors are required to harness capacities of all sectors in order to realize sustainable
societal change. For instance, development in social activities requires collaboration of both
research and development funds. Their aim is to provide resources that can be adopted into
different communities and service providers that will adapt rapidly to changing political, social
and funding environment. Research is also needed as means of investment in promoting good
practice and development of good policy (Simons, 2000, p.4).
Nonprofit organizations and social enterprises continue to seek solutions to social problems by
providing easy to interpret results. Their initiatives translate changing latent needs into explicit
demands, provide innovative goods and services by developing or running the local or
interregional networks, integrating human and financial services for mutual benefit. Just as
traditional enterprises are critical to such areas such as industry and technology, social
entrepreneurs are as well critical to areas of human needs such as health, environment, young
people, and revitalizing communities.
They transform the community by generating initiative approaches to needy private and public
sectors as well as nonprofit sectors (Wolk, 2004). Until corporations are willing to be
strategically involved in funding, designing and implementing community based programs,
corporate donations will still be necessary. Corporate should also work with volunteers in
implement positive and productive community initiatives. Although research in this essay keep
shifting from charitable activities to social entrepreneurship, its important to note that social
entrepreneurs still serve as seedbeds for innovations (Simons, 2000, p.1).
Adaptation of social entrepreneur initiatives into the community has however not been without
challenges. Providing leadership in a dynamic community often receives resistance in
adaptation and the sufferers are always the needy society members. Cooperation between
economic and social players, including government funding welfare programs should be
encouraged since they are the main reason for the growth of social enterprise.
Social entrepreneur have the ability to enhance their research capacity by strategizing in
research alliances and partnering with communities and government to ensure accurate
identification of problems and appropriate provision of resources. One best activity obtained
from social entrepreneurs should be combined community development and business skills to
ensure continued developments. The type of interventions emerging from social enterprise
model should focus on measures of community social capacity rather than concentrating on
profit motives (Simons, 2000, p.3).
Government Support for Social Entrepreneurs
Social entrepreneurs help in testing and developing promising solutions and compliment
governments role in addressing market failures that benefit the citizens. Billy shore founder of
Share Our Strength pointed out that social entrepreneurs create a pipeline for the government,
they take more risks and do things the government cannot do since they are closer to people.
Social entrepreneurship have added value to the community research and addressed major
micro-dimensions in the society that could otherwise have been ignored.
Their approach has also helped the government recognize the compatibility of their approach
in informing and influencing social policy according to emerging models hence improving
relationship between themselves and non-governmental organizations. Social entrepreneurs are
hoped for benefits, develop skills in anticipation and responding to those most at risk, and
enhance the ability to broker evidence based policy development.
They develop close to the grassroots, they interpret and anticipate the needs of most vulnerable
groups and further their integration into social and professional life. They can be hotbeds for
ideas and experiments. After they identify new and emerging demands, they present their ideas
to the public sector decision makers through their partnership with them. Their ethical approach
to new ideas adds extra value to production of goods and services to the society and decrease
administrative burdens (Wolk, 2004, p.188).
Building capacity for societal change and fostering the social innovation requires deliberate
strategies to foster the development of social enterprise and social entrepreneurs who drive
them. Having collected qualitative data from the government, social entrepreneurs are in a
better position to become brokers of evidence based policy development. They have a wealth
of knowledge and wisdom based on experience with the disadvantaged that can facilitate the
adoption of innovative policies at the central, regional and local governments. They facilitate
the community greater sense of partnership into the markets generated wealth, unlocking
opportunities and encourage community participation into policy making process (Wolk, 2004,
p.188).
Successful implementation of social entrepreneurship skills relies upon the active participation
of the three sectors which includes the government, business and community focused activities.
Social entrepreneurs for this case are required to remain alert to any for strategic alliance with
other segments of society that would help realize their dreams. Their main objective of the
strategic alliances is to facilitate the initiation and maintenance of relations across sectors and
help realize key outcomes, combating social exclusion, promotion of social cohesion and
unlocking opportunities for constructive participation.
They also act as outcomes measurements and provide reference points for the development of
benchmarks to assess ongoing and planned activities. Responding to the disadvantaged
simultaneously requires working for societal change for effective and sustainable outcomes. It
considers taking what is considered risky to provide joint leadership in working with others for
more a cohesive society (Wolk, 2004, p.189).
Social entrepreneurs are best known to leverage both public and private sectors, and test and
develop solutions. As evident from research gathered around the globe, the United States
government lacks strategic measures to help address the country’s social problems. The
government however has over the years tried supporting social entrepreneurs through creating
enabling environment for social entrepreneurial initiatives, rewarding initiatives for
performing, encouraging social innovation, scaling initiative success and producing knowledge
that enhances social entrepreneur efforts (Wolk, 2004, p.189).
Launching new initiatives in the markets may be a challenging task for social entrepreneurs.
To help them endure trials of the start up phase, many foundations such as Echoing Green and
Ashoka have been set up to provide support for early organizational development. Various
academic programs that sponsor competition and awards have also stepped up to encourage
social innovation and foundation of new initiatives.
The government should in this case follow this approach by taking proactive roles in
encouraging social innovation by acting as seedbeds in supporting their initiatives mostly in
the start-up phases. For example, the ITNAmerica would not have achieved its goals without
the federal monetary support. The Transit IDEA program sponsored by the Transport Research
Board benefited the public by providing feasibility study that enabled the foundation explore
senior citizens consumer behavior related to fee-based automobile transport services and
helped the foundation explore innovative payment plans and information system technology
(Wolk, 2004, p.189).
Social entrepreneurs often experience barriers addressing social problems, and the government
should in this case help by creating an enabling environment through removing barriers,
supporting collaboration and lending credibility. Existing laws and policy changes can act as
barrier for social innovation and the government should shift its focus from bureaucratic rules
and allow social cohesion and sustainable development. The government ca also show support
by rewarding performance. Howard Husock, the director of the Manhattan Institute Social
entrepreneurship Initiative points out in Wolk (2004) that “social entrepreneurs want access to
reliable sources of financing that recognize performance” (p.191).
Therefore the government can step up by supporting their initiatives through performance-
based rewards and by funding and purchasing their products and services. For example, the
RSVP’s initiative of reducing recidivism among criminal offenders, San Francisco city
managers continued funding RSVP line item long after grand funding ran out. Another example
is illustrated in Arkenstone Reading Machine that was purchased by U.S. Department of
Veterans Affair (VA) hospitals (Wolk, 2004, p.192).
Most societal innovations rely on published information provided by the government in helping
them find the target social problems and identify how many people are affected. Available
research data, funds evaluation that provide critical information documented by the
government helps in identifying problems and compare various interventions against standard
for success for those working towards solving social problems. Some of the initiatives that have
relied on government‘s data include KaBOOM and Benetech in understanding the nature of
the social problem.
For example, the federal funded ITNAmerica financed transport services that revealed the
safety concerns for older drivers that have become essential for citizens. Consensus data
provided by the government also helped social entrepreneurs predict the growing size of
American population that allowed program planning. Social entrepreneurs use government
reports to initiate projects, development and start up similar programs around the country. In
overall, government data is important in identifying social problems, setting standards and
gauging success (Wolk, 2004, p.196).
Conclusion
Research obtained from this essay argues that collaboration of any strategic plans in support of
the social entrepreneurship is particularly important to policy makers. Collaboration of
community members and the government in social entrepreneurship should therefore be
encouraged as it has seen to influence social entrepreneurship growth in the recent years.
Integration of business models and government initiative roles in utilizing market innovation
and productivity in responding to market failures, providing goods and services will decrease
administrative burdens, create transformative solutions and financial sustainable innovations
aimed at solving social problem.
The government on the other hand should shift its focus of bureaucratic rules and concentrate
on entrepreneurship innovations that provided a fertile ground for growth. In reducing New
York State’s deficit, the government should standardize contracts, make timely payments,
prioritize state funding and encourage financial support. Since social entrepreneurs facilitate
the community greater sense of partnership into the markets generated wealth, unlocking
opportunities that would have otherwise been ignored and includes community input into the
policy making process, public and private sectors partnership should always be encouraged in
order to develop solutions.
Organizations on the other hand should integrated financial and programmatic initiatives into
business activities to effectively capture organization problems and maximize their profits.
Incorporating new ideas from experts in the field of social entrepreneurship provides a fertile
ground for young and upcoming entrepreneurship growth by identifying present change in a
social economic environment. In evaluating the benefits of social entrepreneurs in our society,
it’s important for the government to award their efforts through sponsorship, purchase of their
products, prize awards and providing necessary research to facilitate their innovations.
Although there exist a variety of projects within the New Yolk state that seems to address
serious challenges faced by the society, local businessmen and social entrepreneurs are called
upon by the to mobilize their efforts in implementing solutions that will lower administrative
burdens and improve state’s accountability and lives of the local citizens. Since the process of
social entrepreneurship and its strategic goals for improving social welfare of the society
requires collaboration of different sectors across the economy, public, private and the
community enterprises should work in unity to help facilitate the initiation and maintenance of
innovative activities.
Social Entrepreneurs
Ashoka (2010) describes social entrepreneurs to be “people with ambitious and persistence
skills in tackling major social issues that offer new ideas for wide-scale change”(p.1). They
take proactive approaches in trying to change the system and provide solutions to societal
problems by mobilizing the entire society to take the leaps. Their initiatives focus on solving
the societal issues rather than leaving the issues to the government or business sectors. He also
defines them as mass recruiters with ethical skills and have the ability to mobilize people to
stand up for their ideas and implement them.
Social entrepreneurship use market-driven business model in addressing key environmental
issues and critical social needs. They take full responsibility of their project initiatives as they
don’t rely on government shifting focus. Ashoka (2010) also states that these kind of
entrepreneurs “ have the ability to grow to meet needs and priorities of the communities it
serves, as opposed to public sector limited to funds provided by the government” (p.1).
His definitions fits bigger concept of societal innovations as it broadly describes them as
entrepreneurs who provides solutions that are effective, efficient and sustainable to solve the
society social problems. The definitions are not limited to enterprise based approaches to
solving critical issues but also a social enterprise for social innovation. It should however be
noted that social enterprise is not about balancing the double standards of profit and social
impact but to obtain community sustainment projects (Ashoka, 2010).
Despite minimum support from the government and local volunteers, there seems to be general
agreement among the supporters of social entrepreneurship as to its key underlying goals and
their consequences for societal change. Social entrepreneurship innovative and interpretive
approach to societal problem has gained world wide recognition mainly from media houses
and policy makers, as a significant contributor to a country’s economy and to represent
distinctive part of the country’s social and economic activities.
These supporters deem to be building a perfect example of government and corporate bodies’
involvement in social activities. The United States government for example government
supports social entrepreneurs by allocating about $1 trillion every year to federal funds
dedicated to solving social issues. The monetary support may not be enough in the long run
since these organizations always desire for capital to develop their activities. Wolk (2004,
p.151) in his statement argues the government to form an alliance with social entrepreneurs to
generate transformative and cost-effective solutions to the most challenging social problems.
Incorporating new ideas from experts in the field of social entrepreneurship provides a fertile
ground for young and upcoming entrepreneurship growth by identifying present change in a
social economic environment. In evaluating the benefits of social entrepreneurs in our society,
it’s important to determine who social entrepreneurs are, how they benefit the government as
well as private and public businesses and what the government is doing to support them
(Simons, 2000, p.4).
The emergence of social entrepreneurs
Since the focus here is on the how social entrepreneurs has influenced the economy and
provided solutions to societal problems, three stages of responding to societal needs can be
identified. These stages, which correspond very closely with Roger and Osberg (2007, p.30)
include; a) market failures b) transformative innovations and; 3) financial sustainability. To
determine how social entrepreneur emerged as nexus from these factors, it’s important to
establish how it helped the government and improved the lives of public official constituents.
Although different aspects of social entrepreneur appear in all parts of the essay, case examples
illustrated throughout the paper help us understand how social entrepreneurship leverage public
and private resources, test and implement solutions to social by highlighting a number of
successful social entrepreneur initiatives (Wolk 2004, p156).
It was also realized that the triangulation of three sectors of the economy that consisted of the
government, private and public sectors acts as viable transport for innovation. However, there
appears to be a particular issue with regard to collaboration between social entrepreneurs and
the government. Their relationship has proven elusive and largely fruitless in resolving social
problems, transforming and implementing financially stable solutions. In order to enhance
functional relationship between these sectors, Martin and Osberg (2007, p.30) proposes for a
more rigorous approach of government involvement in social entrepreneurship that would later
boosted the economy (Martin& Osberg, 2007).
It’s quite unfortunate that the government has made little efforts in support of social-
entrepreneur initiatives. There has been growing consensus about government involvement in
social entrepreneurship initiatives with many speculating on their significant contribution.
Wolk (2004) mentions some of the strategies government has put in place in support of social
entrepreneur innovative and interpretive approach to include; 1) helping heighten their success
2) reward their performance 3) create supportive environment for innovation 4) encourage
them to innovate and; 5) offer knowledge through published reports and data to help them solve
problems (Wolk, 2004, p157).
History of Social entrepreneurship
According to Organization for Economic Co-Operation and Development (2006), quite a
majority of Americans live in poverty with about one quarter of the adults failing to complete
high school. The country’s health sector was also reported to have ranked 37 in the world’s
health review which was equivalent to status of a developing nation. These declines in both
economic and health sectors has increased the need for social entrepreneurship and its promises
as a means of addressing daunting social needs. Given the magnitude of needs the economy
has, the U.S government for this case is required to inject large sources of funds from federal
reserves, local government and the state to help solve these problems.
In attempting to fill this gap, Wolk (2004, p.155) proposes that the government should look
into the social entrepreneurship assistance for now ideas. He adds that the collaboration
between the two sectors will effectively identify societal needs and provide viable solutions to
the problems. His proposal throughout the essay attempts to define what social entrepreneur is
based on case studies and expert ideas and breaks the new ground in exploring new ways in
which government leaders as well as other constituents are benefiting from their efforts.
In today’s dynamic economy, there’s nothing as powerful as new ideas. Shoka (2010) quotes
more historical examples of social entrepreneurs to include “Susan B. Anthony (U.S.): Fought
for Women’s Rights in the United States, including the right to control property and helped
spearhead adoption of the 19th amendment” (p.1). He also mentions Vinaba Bhave founder of
the Land Gift Movement and the Italian social entrepreneur Dr. Maria Montessori founder of
Early Childhood Education among others (Ashoka, 2010).
In 2007, President George W. Bush acknowledged a variety of social entrepreneurs who have
helped the American society achieve a competitive age. Among the honored guests were Julie
Aigner-Clarke, founder of the Children Video Company and Baby Einstein producer of the
Child Safety Video. In his statement, president Bush (2007) acknowledged Julie’s efforts by
stating that
Julie represents the great enterprising spirit of America. And she is using her success to help
others….we are please to welcome this talented business entrepreneur and generous social
entrepreneur (p.1).
The president’s exploration of creative tasks delineateb by social entrepreneurs towards
community development applauded their efforts in responding to market failures, creating
transformative and financially sustainable innovations aimed at solving social problems.
Popular media has not been left behind on recognizing social entrepreneurs in our society. A
variety of media personalities for example have tried to redefined the term social
entrepreneurship to a greater household name. The Economists, Harvard Business Review, The
New York times among others have echoed this sentiment in an attempt to assess social
entrepreneurship achievements by publicizing their efforts.
According to Schumpeter (1982), markets exhibit a range of entrepreneur characteristics that
include innovative, risk-taking and large scale transformation. People deemed to possess these
characteristics were recognized in the 2006 U.S News and World Report to include Wendy
Kopp, founder of Teach For America, Michael Brown and Ali Khazei, founder of City Year
among others. Also included in the category were Grameen Bank, a Nobel Peace Winner,
Victoria Hale, founder of OneWorld Health Institute and Jim Fructerman from the MacArthur
Foundation (Wolk, 2004, 6).
Some historic examples of social innovators that changed the American social landscape are
also mentioned by Wolk (2004) to include Florence Nightingale of the 1800s foundation of the
modern field of nursing and Horace Mann, founder of public education. Wolk (2004) studies
argue that a social entrepreneur represent a distinctive part of a country’ social and economic
life and the United Stated for this case has gained tremendously. American entrepreneurship
can be traced within the context of changes that have taken place since 1980s.
The first entrepreneur recognized during that time was Edward Skloot who founded a non profit
consulting firm interested in creating business ventures. His work was published in Harvard
Business Review in 1983 as “nonprofit entrepreneurship” (Skloot, 1983, p.22) as a description
of business ventures that diversify nonprofit organization funding streams. Bill Drayton
founder of Ashoka came into play in 1981 as an Innovator for the Public to seek, support and
publicize public entrepreneurs. Pater Drucker of the management expert book was recognized
in 1985 among the first entrepreneurs to describe a phenomenon that extended into multiple
sectors (Battle& Dees, 2006, p.150).
Towards the mid 1990s social entrepreneurs began to gain new meaning as many scholars and
presses described them as anyone who started a nonprofit organization, or any business man
who integrated social responsibility into their operations. Here, social entrepreneurship is
described broadly to include a variety of organization structures and activities within the social
entrepreneurship context. Wolk (2004) argues here that social entrepreneurship stems from
initiatives that tend to exhibit the characteristics of innovations and risk taking.
He mentions various examples of social innovators throughout his research in illustrating how
entrepreneur initiatives act as seedbeds for development for non profit organizations, for profit
organizations and rather government programs. For this reason, it’s important to explain the
threes sectors in both social and economic perspective of an American economy by describe
their specific roles and responsibilities of in social entrepreneurship.. Below is an illustrated of
how social entrepreneurs have benefited the society within the context of public, private and
voluntary organizations and a description of trends that have eliminated the boundaries
between these sectors (Wolk, 2004, p.158).
Private Sector
Building capacity for societal change and fostering the social innovation requires full
participation of private and public sectors as well as voluntary organizations. A private sector
is defined by Wolk (2004) as “organization that incorporates activities of small business,
corporation and enterprises in utilizing market exchange for goods and services while
maximizing their profits” (p.158). Their strategies to foster development of social enterprises
and social entrepreneurship drive innovation and productivity into the economy.
Economists have long identified innovation as one of the major contributors to private sectors.
A former 1900s scholar Joseph Schumer once commended in Milton (1982) that “Further
contemporary economist Milton Friedman has argued that free markets, competition, and
consumer choices are also essential components of capitalism” (p.50). According to Wolk
(2004) reports, private sectors in the U.S economy represent approximately $13 trillion a year
in gross domestic product ranking the country top among the world’s largest economy.
This sector is also reported to be the major contributor to the country’s work force with 115
million employees currently working in private organizations. The public sector on the other
hand consists of about 87,900 government units with $4.3 trillion in earnings with 18 million
employees, while the non profit sectors contributes about $1.4 billion in revenue with 9.4
million employees and consists about 1.4 million organizations. The alliance between the three
sectors in carrying out social entrepreneurship has been credited to improve availability of jobs,
stimulate innovations and build wealth for the nation (Wolk, 2004, p.160).
Public Sectors
The public sector in support of social entrepreneurship is mentioned by Wolk (2004) to include
the following activities; 1) addressing inequalities in the markets by helping families living in
poverty by providing unemployment benefits and measurements for disaster assistance; 2)
providing public facilities such as policing, public defense, education and libraries to the most
needy in the society. In relation to market failure perspective, it seems complicated to define
the relationship between public sectors and social entrepreneurship as the services provided are
more than what the public is willing to pay for.
Social entrepreneurship distinctly addresses market failures since they are not profit oriented
and address the un-met public needs. The government role in re-distributing services to address
market failures is another way of contributing to social entrepreneurship. Its support of private
sectors in providing goods for the public helps address market inequalities and foster
environment for initiative development. Although a lot has been done to support these
initiatives, the government continues to face pressure in allocating resources to meet all the
societal needs (Wolk, 2004, p.161).
Non Profit Sectors
Non profit sectors have been traditionally known to engage in a variety of activities that support
social goals. Perfect examples of such organizations include private hospitals and schools,
religious organizations, and social service providers. Nonprofit sectors efforts in support social
activities are recognized when both private and public sectors have failed to meet particular
social needs and since they can not distribute the profits to their leaders, these sectors are placed
at a better position to use their revenues to sustain growth and grow their organizations.
Although they are by far the smallest sectors, nonprofit organization are known to be the fastest
growing organizations. In 1994 for example, the nonprofit organization were reported to have
doubled in number with almost 65 % growth rate which added up to 10.5% of the country’s
work force (Wolk, 2004, p.161).
Nicholls (2006) a scholar from Oxford university defines social entrepreneur to include both
multi-dimensional and dynamic construct of the economy rather than their organizational form.
All the three sectors play distinctive roles in resolving societal needs by ensuring public needs
are met. However, several trends have continued to emerge within the social entrepreneurship
spectrum bridging the gap between these sectors hence creating conducive environment for
social entrepreneurs to emerge and grow.
In private sectors for example, businesses and employees are increasingly engaging in activities
previously regarded as non-profitable as many have started engaging in educational and social
projects providing companies’ opportunity to offer services that could not have been considered
in the first place or regarded as government activities (Light, 2003). Osborne and Gaebler
(1993) journal reports states that, between 1999 and 2002, the U.S government reported to have
awarded about 700,000 contracts in federal funds to private enterprises and the public sectors
seem to have also shifted their focus from maximizing profits to engaging in social activities.
According to Goldsmith and Eggers (2004), the government engages in social enterprises by
offering opportunities to public enterprises to privatize their firms which call for business ethics
in turn promoting more competitive business environment. Private sectors have also increased
demand for efficiency and accountability and bridged the gaps in public sector delivery and
created public sector responsibility.
Goldsmith and his colleague also argue that social entrepreneurs have increased efficiency in
government funds as they only inject resources to market demands and increased preference
on issues ranging from public utilities to public schools. Government’s strategy of
monopolizing public sectors and reliance on private sectors in managing contracts and
allocating funds has greatly increased social responsibility and helped fill the gap in public
service delivery by ensuring the best services are provided (Goldsmith and Eggers, 2004).
Response to Market failures
As already discussed, social entrepreneurs characterized by their ethical skills are able to
identify to market failures and commit their resources to affect to the neediest in the society.
Because private sectors or even the government are unable to generate enough profits to
respond to these problems, these sectors bridge the gap by finding market opportunities and
maximizing their potential. Under normal circumstances, the government would try to address
the unmet needs by deploying public funds into the sectors, which has already been proven
futile in the long run. Social entrepreneurs in this case present viable options for addressing
market failures by seeking opportunities to create value rather than economical benefit.
Gregory Dees, founder of social entrepreneur argues that market approach to market
evaluations on social improvement do not adequately identify harms for people who cannot
afford to pay for the service and social entrepreneurs presence would distinctly cater for the
economy’s needs (Battle&Dees, 2006, p.160).
Social entrepreneurs insight exploration of societal problems have the ability to provide
transformational benefit that targets education and employment activities as well as the
marginalized areas that would have never been considered by the government. Wolk (2004)
categorizes market approaches into three broad perspectives that include; “no market approach,
limited market and low-profit market approach in targeting beneficiaries and responding to
market failures” (p.168).
He identifies no market approach as a social entrepreneurship strategy that offers products and
services to its potential beneficiaries without requesting for any payments. So this could mean
that the organization depends entirely on its own funding to sustain the initiatives. Limited
market approach on the other hand required beneficiaries to pay partial of the costs so sustain
the project activities, a common trend exhibited in non-profit organizations. He explains low-
profit market approach to require full payment of goods and services obtained as illustrated in
most private organizations that have the potential of generating profits (Wolk, 2004, p.168).
Transformative Innovations
Social entrepreneurs are described by many scholars as change agents, creating systematic
change by introducing new ideas and persuading others to adopt, changing social patterns that
create social problems through breaking patterns. In transformative perspective, Bill Drayton
defines social entrepreneurs as creative thinkers continuously striving for innovations.
Transformative ideas can be seen through the invention of new technologies, methods of
production, supply sources and distribution outlets and social entrepreneurs have for this case
taken these innovative approaches further by devising strategies that have benefited the whole
society (Ashoka, 2010). Social entrepreneur have been evidenced to combine their own
innovative skills, research obtained from public sources and political influence in attaining
their goals. Their ability to involve major players in the entrepreneurship activities character
sets them apart from the traditional profit oriented organizations (Wolk, 2004, p.20).
Financial Sustainability
Market analysts urge private organizations and business to should try and find a model that
responds to their unique characters of their social problem. Wolk (2004) statements stressed
organization to obtain their own financial sustainability that will cushion them through the hard
economic times and engage in social reality projects that prefer productivity and efficient
management of their resources. He argues that businesses that adopt this approach often report
good report results on organizational performance and cost benefit returns on investment.
These organizations are also required to integrated financial and programmatic initiatives into
business activities to effectively capture organization problems and maximize their profits
(Wolk, 2004, p.170).
Non-financial Resources
Non-financial resources also known as volunteers are social entrepreneurs deemed to posses
both skilled and unskilled education and may at one time rely on donations to increase the
sustainability of their initiatives. These volunteers engage in public activities that develop and
implement social solutions like the Hurricane Katrina volunteers that came out in large
numbers to complete intensely needed work in a way the government could have never afforded
by themselves (Wolk, 2004, p.171).
Social entrepreneurs in New York State
Social enterprise is a new breed of entrepreneurship that exhibits the characteristics of
innovation, risk taking and large-scale transformation. They have provided a fertile ground for
young and upcoming entrepreneurship growth by identifying present change in social
economic environment. On New York perspective, the practice of responding to market failures
with transformative, financially sustainable innovations aimed at solving societal issues is
advancing at pace that exceeds comfort zone causing the government to suffer substantial
losses in funding charitable organizations. Although there exist a variety of projects within the
New Yolk state that seems to address serious challenges faced by the society, local businessmen
and social entrepreneurs are called upon by the State’s comptroller to mobilize their efforts in
implementing solutions that will lower administrative burdens and improve state’s
accountability and oversight (Dinapoli, 2010, p.1).
Some of the State’s initiatives that include youth programs, education services and arts council
are currently being threatened by the economic downturn and social entrepreneurs are for this
case trusted to have the potential for transform the social innovations. Dinapoli (2010) gives
us a perfect example of a successful community-based initiatives that have helped stimulate
the economy by illustrating the 2006 human service organizations social entrepreneurship
initiative that reported revenues of $132.9 billion in over 24,000 NFPs and provided nearly 1.2
million jobs which contributes to about 17% of the States work force. While in June 2009, the
State was reported to have had 31,000 contractors with NFPs totaling to $14.6 billion (Dinapoli,
2010, p.1).
New York State has also been facing serious issues in regard to increased demand for goods
and services resulting to increase pressure on the State’s budget. For example, between 2008
and 2009, the State’s unemployment rates increased from 5.8% to 8.9% simultaneously and
rose from 6.0 % in 2008 to10.3% in 2009 in the New York City. The overwhelming numbers
of dependable people increased the number of people receiving food stamps by 17.5% between
January and October the same year. The State continues to struggle with program funding as
more households continue to seek assistance of all types.
Dinapoli (2010) mentions other States deficit that might have increased pressure on demand
for goods and services to include; the Home Energy Assistance Program (HEAP) increased
deficit of 36.3 percent between 2008 and 2009, the State’s budget deficit of $4.1billion for the
fiscal year 2009-2010, and the projected deficit of more than $23 billion expected to hit through
SFY between 2011 to 2011. Charitable activities have also reduced their contributions to social
activities and private corporations and philanthropic organizations no longer provide
significant funds to finance societal services (Dinapoli, 2010, p.2).
Contracts Delays and Late Payments
Quite a number of not for profit (NFPs) organizations receive funding from the State through
contract allocations. According to the Office of the State Comptroller (OSC) of New York State,
about 87% of state contracts in 2009 were reported to have been delayed as a result of the
economic downturn. These delays forced NFPs to perform activities without any payments
hence resulting to increased borrowing to finance their projects. Dinapoli (2010) reports
indicated that about 69% of NFPs resorted to borrowing due the delayed government contracts
and payments. This gap can be bridged by businesses involvement in community initiatives
that require social enterprise participation (Dinapoli, 2010, p.4).
Social entrepreneurs have been identified to present change in social economic environment
by engaging businesses in their activities. Social entrepreneurs for this case involve players
such as volunteers and not for profit organizations in meeting social needs. Some of the inherent
benefits of including community activities in social entrepreneurship include full utilization of
human resources, increased diversity which reduces intercultural conflicts among community
members, enhances work relationship based on mutual respect and increased knowledge of
multicultural issues. It is also argued that community involvement Increases commitment
among diverse cultures and across all functions, increases community participation in key-
decision making and problem solving and improves productivity and reduces energy spend in
solving cultural clashes (Chase, 2000, p. 12; Simons, 2000, p.4).).
It’s important for users, service providers, the community and the government to stay ahead of
the societal challenges. Policy makers in this case require the public to take active roles in
providing innovative ideas to handle these changes. Chase (2000) requires the integration
between society and the economy in evaluating societal needs and the attainment of certain
social and economic goals. Chase (2000) definitions of social entrepreneurship are not aimed
at describing functions of social entrepreneurs but rather as effective instruments for combating
social problems and vehicle for social cohesion.
He defines social entrepreneurs as nonprofit agencies that maximize their mission-related
performance through development of new ventures or by reorganizing existing activities to
improve operational effectiveness. For profit companies that are involved in social activities
can also be referred as social enterprises embedded in social purpose. Non profit can be linked
to a wide range of foundations, associated organizations and organizations that operate outside
the parameters of common markets (Chase, 2000, p.12).
Although little research has been done on nonprofit organization from social entrepreneurship
perspective, Wolk (2004) recognizes them as powerful tools that have revitalized otherwise
deprived areas, communities and localities and produced services that are not being produced
by mainstream commercial enterprises. Ashoka foundation illustrates a perfect example of
social entrepreneurs that have become leaders in social change by providing sources through
inter-sectoral resources without limiting themselves to traditional charitable models.
Social entrepreneurs and nonprofit organization seem to be categorized in the same model of
community service as they both possess common themes in addressing complex social needs
in effective and integrated ways and regenerating communities’ needs. Another common
characteristics exhibited in these two organizations includes their ability to recognize the
society’s need for an incubation period, allows new ventures to mature, undergo rigorous
ongoing assessment to maximize outcomes and identify needs, support and develop them
(Simons, 2000, p.4).
To understand how social entrepreneurs contribute to the society. Three factors keep
reoccurring throughout the essay. First, social entrepreneurs have a capacity to be a leader in
the social field change which is achieved by their ability to break social reforms and design
innovative programs. Second, their rigorous approach in maximizing societal changes and
outcomes. And third, their ability to take outstanding or emerging social problems. The ability
to collaborate, challenge and support community initiatives in reference to the community,
business and government activities achieves them higher in the society (Simons, 2000, p.4).
Challenges often faced by social enterprise are their inability to collaborate all the three sectors
into long-term and strategic objectives of innovation, research and capacity building. All the
three sectors are required to harness capacities of all sectors in order to realize sustainable
societal change. For instance, development in social activities requires collaboration of both
research and development funds. Their aim is to provide resources that can be adopted into
different communities and service providers that will adapt rapidly to changing political, social
and funding environment. Research is also needed as means of investment in promoting good
practice and development of good policy (Simons, 2000, p.4).
Nonprofit organizations and social enterprises continue to seek solutions to social problems by
providing easy to interpret results. Their initiatives translate changing latent needs into explicit
demands, provide innovative goods and services by developing or running the local or
interregional networks, integrating human and financial services for mutual benefit. Just as
traditional enterprises are critical to such areas such as industry and technology, social
entrepreneurs are as well critical to areas of human needs such as health, environment, young
people, and revitalizing communities.
They transform the community by generating initiative approaches to needy private and public
sectors as well as nonprofit sectors (Wolk, 2004). Until corporations are willing to be
strategically involved in funding, designing and implementing community based programs,
corporate donations will still be necessary. Corporate should also work with volunteers in
implement positive and productive community initiatives. Although research in this essay keep
shifting from charitable activities to social entrepreneurship, its important to note that social
entrepreneurs still serve as seedbeds for innovations (Simons, 2000, p.1).
Adaptation of social entrepreneur initiatives into the community has however not been without
challenges. Providing leadership in a dynamic community often receives resistance in
adaptation and the sufferers are always the needy society members. Cooperation between
economic and social players, including government funding welfare programs should be
encouraged since they are the main reason for the growth of social enterprise.
Social entrepreneur have the ability to enhance their research capacity by strategizing in
research alliances and partnering with communities and government to ensure accurate
identification of problems and appropriate provision of resources. One best activity obtained
from social entrepreneurs should be combined community development and business skills to
ensure continued developments. The type of interventions emerging from social enterprise
model should focus on measures of community social capacity rather than concentrating on
profit motives (Simons, 2000, p.3).
Government Support for Social Entrepreneurs
Social entrepreneurs help in testing and developing promising solutions and compliment
governments role in addressing market failures that benefit the citizens. Billy shore founder of
Share Our Strength pointed out that social entrepreneurs create a pipeline for the government,
they take more risks and do things the government cannot do since they are closer to people.
Social entrepreneurship have added value to the community research and addressed major
micro-dimensions in the society that could otherwise have been ignored.
Their approach has also helped the government recognize the compatibility of their approach
in informing and influencing social policy according to emerging models hence improving
relationship between themselves and non-governmental organizations. Social entrepreneurs are
hoped for benefits, develop skills in anticipation and responding to those most at risk, and
enhance the ability to broker evidence based policy development.
They develop close to the grassroots, they interpret and anticipate the needs of most vulnerable
groups and further their integration into social and professional life. They can be hotbeds for
ideas and experiments. After they identify new and emerging demands, they present their ideas
to the public sector decision makers through their partnership with them. Their ethical approach
to new ideas adds extra value to production of goods and services to the society and decrease
administrative burdens (Wolk, 2004, p.188).
Building capacity for societal change and fostering the social innovation requires deliberate
strategies to foster the development of social enterprise and social entrepreneurs who drive
them. Having collected qualitative data from the government, social entrepreneurs are in a
better position to become brokers of evidence based policy development. They have a wealth
of knowledge and wisdom based on experience with the disadvantaged that can facilitate the
adoption of innovative policies at the central, regional and local governments. They facilitate
the community greater sense of partnership into the markets generated wealth, unlocking
opportunities and encourage community participation into policy making process (Wolk, 2004,
p.188).
Successful implementation of social entrepreneurship skills relies upon the active participation
of the three sectors which includes the government, business and community focused activities.
Social entrepreneurs for this case are required to remain alert to any for strategic alliance with
other segments of society that would help realize their dreams. Their main objective of the
strategic alliances is to facilitate the initiation and maintenance of relations across sectors and
help realize key outcomes, combating social exclusion, promotion of social cohesion and
unlocking opportunities for constructive participation.
They also act as outcomes measurements and provide reference points for the development of
benchmarks to assess ongoing and planned activities. Responding to the disadvantaged
simultaneously requires working for societal change for effective and sustainable outcomes. It
considers taking what is considered risky to provide joint leadership in working with others for
more a cohesive society (Wolk, 2004, p.189).
Social entrepreneurs are best known to leverage both public and private sectors, and test and
develop solutions. As evident from research gathered around the globe, the United States
government lacks strategic measures to help address the country’s social problems. The
government however has over the years tried supporting social entrepreneurs through creating
enabling environment for social entrepreneurial initiatives, rewarding initiatives for
performing, encouraging social innovation, scaling initiative success and producing knowledge
that enhances social entrepreneur efforts (Wolk, 2004, p.189).
Launching new initiatives in the markets may be a challenging task for social entrepreneurs.
To help them endure trials of the start up phase, many foundations such as Echoing Green and
Ashoka have been set up to provide support for early organizational development. Various
academic programs that sponsor competition and awards have also stepped up to encourage
social innovation and foundation of new initiatives.
The government should in this case follow this approach by taking proactive roles in
encouraging social innovation by acting as seedbeds in supporting their initiatives mostly in
the start-up phases. For example, the ITNAmerica would not have achieved its goals without
the federal monetary support. The Transit IDEA program sponsored by the Transport Research
Board benefited the public by providing feasibility study that enabled the foundation explore
senior citizens consumer behavior related to fee-based automobile transport services and
helped the foundation explore innovative payment plans and information system technology
(Wolk, 2004, p.189).
Social entrepreneurs often experience barriers addressing social problems, and the government
should in this case help by creating an enabling environment through removing barriers,
supporting collaboration and lending credibility. Existing laws and policy changes can act as
barrier for social innovation and the government should shift its focus from bureaucratic rules
and allow social cohesion and sustainable development. The government ca also show support
by rewarding performance. Howard Husock, the director of the Manhattan Institute Social
entrepreneurship Initiative points out in Wolk (2004) that “social entrepreneurs want access to
reliable sources of financing that recognize performance” (p.191).
Therefore the government can step up by supporting their initiatives through performance-
based rewards and by funding and purchasing their products and services. For example, the
RSVP’s initiative of reducing recidivism among criminal offenders, San Francisco city
managers continued funding RSVP line item long after grand funding ran out. Another example
is illustrated in Arkenstone Reading Machine that was purchased by U.S. Department of
Veterans Affair (VA) hospitals (Wolk, 2004, p.192).
Most societal innovations rely on published information provided by the government in helping
them find the target social problems and identify how many people are affected. Available
research data, funds evaluation that provide critical information documented by the
government helps in identifying problems and compare various interventions against standard
for success for those working towards solving social problems. Some of the initiatives that have
relied on government‘s data include KaBOOM and Benetech in understanding the nature of
the social problem.
For example, the federal funded ITNAmerica financed transport services that revealed the
safety concerns for older drivers that have become essential for citizens. Consensus data
provided by the government also helped social entrepreneurs predict the growing size of
American population that allowed program planning. Social entrepreneurs use government
reports to initiate projects, development and start up similar programs around the country. In
overall, government data is important in identifying social problems, setting standards and
gauging success (Wolk, 2004, p.196).
Conclusion
Research obtained from this essay argues that collaboration of any strategic plans in support of
the social entrepreneurship is particularly important to policy makers. Collaboration of
community members and the government in social entrepreneurship should therefore be
encouraged as it has seen to influence social entrepreneurship growth in the recent years.
Integration of business models and government initiative roles in utilizing market innovation
and productivity in responding to market failures, providing goods and services will decrease
administrative burdens, create transformative solutions and financial sustainable innovations
aimed at solving social problem.
The government on the other hand should shift its focus of bureaucratic rules and concentrate
on entrepreneurship innovations that provided a fertile ground for growth. In reducing New
York State’s deficit, the government should standardize contracts, make timely payments,
prioritize state funding and encourage financial support. Since social entrepreneurs facilitate
the community greater sense of partnership into the markets generated wealth, unlocking
opportunities that would have otherwise been ignored and includes community input into the
policy making process, public and private sectors partnership should always be encouraged in
order to develop solutions.
Organizations on the other hand should integrated financial and programmatic initiatives into
business activities to effectively capture organization problems and maximize their profits.
Incorporating new ideas from experts in the field of social entrepreneurship provides a fertile
ground for young and upcoming entrepreneurship growth by identifying present change in a
social economic environment. In evaluating the benefits of social entrepreneurs in our society,
it’s important for the government to award their efforts through sponsorship, purchase of their
products, prize awards and providing necessary research to facilitate their innovations.
Although there exist a variety of projects within the New Yolk state that seems to address
serious challenges faced by the society, local businessmen and social entrepreneurs are called
upon by the to mobilize their efforts in implementing solutions that will lower administrative
burdens and improve state’s accountability and lives of the local citizens. Since the process of
social entrepreneurship and its strategic goals for improving social welfare of the society
requires collaboration of different sectors across the economy, public, private and the
community enterprises should work in unity to help facilitate the initiation and maintenance of
innovative activities.
Social Entrepreneurs
Ashoka (2010) describes social entrepreneurs to be “people with ambitious and persistence
skills in tackling major social issues that offer new ideas for wide-scale change”(p.1). They
take proactive approaches in trying to change the system and provide solutions to societal
problems by mobilizing the entire society to take the leaps. Their initiatives focus on solving
the societal issues rather than leaving the issues to the government or business sectors. He also
defines them as mass recruiters with ethical skills and have the ability to mobilize people to
stand up for their ideas and implement them.
Social entrepreneurship use market-driven business model in addressing key environmental
issues and critical social needs. They take full responsibility of their project initiatives as they
don’t rely on government shifting focus. Ashoka (2010) also states that these kind of
entrepreneurs “ have the ability to grow to meet needs and priorities of the communities it
serves, as opposed to public sector limited to funds provided by the government” (p.1).
His definitions fits bigger concept of societal innovations as it broadly describes them as
entrepreneurs who provides solutions that are effective, efficient and sustainable to solve the
society social problems. The definitions are not limited to enterprise based approaches to
solving critical issues but also a social enterprise for social innovation. It should however be
noted that social enterprise is not about balancing the double standards of profit and social
impact but to obtain community sustainment projects (Ashoka, 2010).
Despite minimum support from the government and local volunteers, there seems to be general
agreement among the supporters of social entrepreneurship as to its key underlying goals and
their consequences for societal change. Social entrepreneurship innovative and interpretive
approach to societal problem has gained world wide recognition mainly from media houses
and policy makers, as a significant contributor to a country’s economy and to represent
distinctive part of the country’s social and economic activities.
These supporters deem to be building a perfect example of government and corporate bodies’
involvement in social activities. The United States government for example government
supports social entrepreneurs by allocating about $1 trillion every year to federal funds
dedicated to solving social issues. The monetary support may not be enough in the long run
since these organizations always desire for capital to develop their activities. Wolk (2004,
p.151) in his statement argues the government to form an alliance with social entrepreneurs to
generate transformative and cost-effective solutions to the most challenging social problems.
Incorporating new ideas from experts in the field of social entrepreneurship provides a fertile
ground for young and upcoming entrepreneurship growth by identifying present change in a
social economic environment. In evaluating the benefits of social entrepreneurs in our society,
it’s important to determine who social entrepreneurs are, how they benefit the government as
well as private and public businesses and what the government is doing to support them
(Simons, 2000, p.4).
The emergence of social entrepreneurs
Since the focus here is on the how social entrepreneurs has influenced the economy and
provided solutions to societal problems, three stages of responding to societal needs can be
identified. These stages, which correspond very closely with Roger and Osberg (2007, p.30)
include; a) market failures b) transformative innovations and; 3) financial sustainability. To
determine how social entrepreneur emerged as nexus from these factors, it’s important to
establish how it helped the government and improved the lives of public official constituents.
Although different aspects of social entrepreneur appear in all parts of the essay, case examples
illustrated throughout the paper help us understand how social entrepreneurship leverage public
and private resources, test and implement solutions to social by highlighting a number of
successful social entrepreneur initiatives (Wolk 2004, p156).
It was also realized that the triangulation of three sectors of the economy that consisted of the
government, private and public sectors acts as viable transport for innovation. However, there
appears to be a particular issue with regard to collaboration between social entrepreneurs and
the government. Their relationship has proven elusive and largely fruitless in resolving social
problems, transforming and implementing financially stable solutions. In order to enhance
functional relationship between these sectors, Martin and Osberg (2007, p.30) proposes for a
more rigorous approach of government involvement in social entrepreneurship that would later
boosted the economy (Martin& Osberg, 2007).
It’s quite unfortunate that the government has made little efforts in support of social-
entrepreneur initiatives. There has been growing consensus about government involvement in
social entrepreneurship initiatives with many speculating on their significant contribution.
Wolk (2004) mentions some of the strategies government has put in place in support of social
entrepreneur innovative and interpretive approach to include; 1) helping heighten their success
2) reward their performance 3) create supportive environment for innovation 4) encourage
them to innovate and; 5) offer knowledge through published reports and data to help them solve
problems (Wolk, 2004, p157).
History of Social entrepreneurship
According to Organization for Economic Co-Operation and Development (2006), quite a
majority of Americans live in poverty with about one quarter of the adults failing to complete
high school. The country’s health sector was also reported to have ranked 37 in the world’s
health review which was equivalent to status of a developing nation. These declines in both
economic and health sectors has increased the need for social entrepreneurship and its promises
as a means of addressing daunting social needs. Given the magnitude of needs the economy
has, the U.S government for this case is required to inject large sources of funds from federal
reserves, local government and the state to help solve these problems.
In attempting to fill this gap, Wolk (2004, p.155) proposes that the government should look
into the social entrepreneurship assistance for now ideas. He adds that the collaboration
between the two sectors will effectively identify societal needs and provide viable solutions to
the problems. His proposal throughout the essay attempts to define what social entrepreneur is
based on case studies and expert ideas and breaks the new ground in exploring new ways in
which government leaders as well as other constituents are benefiting from their efforts.
In today’s dynamic economy, there’s nothing as powerful as new ideas. Shoka (2010) quotes
more historical examples of social entrepreneurs to include “Susan B. Anthony (U.S.): Fought
for Women’s Rights in the United States, including the right to control property and helped
spearhead adoption of the 19th amendment” (p.1). He also mentions Vinaba Bhave founder of
the Land Gift Movement and the Italian social entrepreneur Dr. Maria Montessori founder of
Early Childhood Education among others (Ashoka, 2010).
In 2007, President George W. Bush acknowledged a variety of social entrepreneurs who have
helped the American society achieve a competitive age. Among the honored guests were Julie
Aigner-Clarke, founder of the Children Video Company and Baby Einstein producer of the
Child Safety Video. In his statement, president Bush (2007) acknowledged Julie’s efforts by
stating that
Julie represents the great enterprising spirit of America. And she is using her success to help
others….we are please to welcome this talented business entrepreneur and generous social
entrepreneur (p.1).
The president’s exploration of creative tasks delineateb by social entrepreneurs towards
community development applauded their efforts in responding to market failures, creating
transformative and financially sustainable innovations aimed at solving social problems.
Popular media has not been left behind on recognizing social entrepreneurs in our society. A
variety of media personalities for example have tried to redefined the term social
entrepreneurship to a greater household name. The Economists, Harvard Business Review, The
New York times among others have echoed this sentiment in an attempt to assess social
entrepreneurship achievements by publicizing their efforts.
According to Schumpeter (1982), markets exhibit a range of entrepreneur characteristics that
include innovative, risk-taking and large scale transformation. People deemed to possess these
characteristics were recognized in the 2006 U.S News and World Report to include Wendy
Kopp, founder of Teach For America, Michael Brown and Ali Khazei, founder of City Year
among others. Also included in the category were Grameen Bank, a Nobel Peace Winner,
Victoria Hale, founder of OneWorld Health Institute and Jim Fructerman from the MacArthur
Foundation (Wolk, 2004, 6).
Some historic examples of social innovators that changed the American social landscape are
also mentioned by Wolk (2004) to include Florence Nightingale of the 1800s foundation of the
modern field of nursing and Horace Mann, founder of public education. Wolk (2004) studies
argue that a social entrepreneur represent a distinctive part of a country’ social and economic
life and the United Stated for this case has gained tremendously. American entrepreneurship
can be traced within the context of changes that have taken place since 1980s.
The first entrepreneur recognized during that time was Edward Skloot who founded a non profit
consulting firm interested in creating business ventures. His work was published in Harvard
Business Review in 1983 as “nonprofit entrepreneurship” (Skloot, 1983, p.22) as a description
of business ventures that diversify nonprofit organization funding streams. Bill Drayton
founder of Ashoka came into play in 1981 as an Innovator for the Public to seek, support and
publicize public entrepreneurs. Pater Drucker of the management expert book was recognized
in 1985 among the first entrepreneurs to describe a phenomenon that extended into multiple
sectors (Battle& Dees, 2006, p.150).
Towards the mid 1990s social entrepreneurs began to gain new meaning as many scholars and
presses described them as anyone who started a nonprofit organization, or any business man
who integrated social responsibility into their operations. Here, social entrepreneurship is
described broadly to include a variety of organization structures and activities within the social
entrepreneurship context. Wolk (2004) argues here that social entrepreneurship stems from
initiatives that tend to exhibit the characteristics of innovations and risk taking.
He mentions various examples of social innovators throughout his research in illustrating how
entrepreneur initiatives act as seedbeds for development for non profit organizations, for profit
organizations and rather government programs. For this reason, it’s important to explain the
threes sectors in both social and economic perspective of an American economy by describe
their specific roles and responsibilities of in social entrepreneurship.. Below is an illustrated of
how social entrepreneurs have benefited the society within the context of public, private and
voluntary organizations and a description of trends that have eliminated the boundaries
between these sectors (Wolk, 2004, p.158).
Private Sector
Building capacity for societal change and fostering the social innovation requires full
participation of private and public sectors as well as voluntary organizations. A private sector
is defined by Wolk (2004) as “organization that incorporates activities of small business,
corporation and enterprises in utilizing market exchange for goods and services while
maximizing their profits” (p.158). Their strategies to foster development of social enterprises
and social entrepreneurship drive innovation and productivity into the economy.
Economists have long identified innovation as one of the major contributors to private sectors.
A former 1900s scholar Joseph Schumer once commended in Milton (1982) that “Further
contemporary economist Milton Friedman has argued that free markets, competition, and
consumer choices are also essential components of capitalism” (p.50). According to Wolk
(2004) reports, private sectors in the U.S economy represent approximately $13 trillion a year
in gross domestic product ranking the country top among the world’s largest economy.
This sector is also reported to be the major contributor to the country’s work force with 115
million employees currently working in private organizations. The public sector on the other
hand consists of about 87,900 government units with $4.3 trillion in earnings with 18 million
employees, while the non profit sectors contributes about $1.4 billion in revenue with 9.4
million employees and consists about 1.4 million organizations. The alliance between the three
sectors in carrying out social entrepreneurship has been credited to improve availability of jobs,
stimulate innovations and build wealth for the nation (Wolk, 2004, p.160).
Public Sectors
The public sector in support of social entrepreneurship is mentioned by Wolk (2004) to include
the following activities; 1) addressing inequalities in the markets by helping families living in
poverty by providing unemployment benefits and measurements for disaster assistance; 2)
providing public facilities such as policing, public defense, education and libraries to the most
needy in the society. In relation to market failure perspective, it seems complicated to define
the relationship between public sectors and social entrepreneurship as the services provided are
more than what the public is willing to pay for.
Social entrepreneurship distinctly addresses market failures since they are not profit oriented
and address the un-met public needs. The government role in re-distributing services to address
market failures is another way of contributing to social entrepreneurship. Its support of private
sectors in providing goods for the public helps address market inequalities and foster
environment for initiative development. Although a lot has been done to support these
initiatives, the government continues to face pressure in allocating resources to meet all the
societal needs (Wolk, 2004, p.161).
Non Profit Sectors
Non profit sectors have been traditionally known to engage in a variety of activities that support
social goals. Perfect examples of such organizations include private hospitals and schools,
religious organizations, and social service providers. Nonprofit sectors efforts in support social
activities are recognized when both private and public sectors have failed to meet particular
social needs and since they can not distribute the profits to their leaders, these sectors are placed
at a better position to use their revenues to sustain growth and grow their organizations.
Although they are by far the smallest sectors, nonprofit organization are known to be the fastest
growing organizations. In 1994 for example, the nonprofit organization were reported to have
doubled in number with almost 65 % growth rate which added up to 10.5% of the country’s
work force (Wolk, 2004, p.161).
Nicholls (2006) a scholar from Oxford university defines social entrepreneur to include both
multi-dimensional and dynamic construct of the economy rather than their organizational form.
All the three sectors play distinctive roles in resolving societal needs by ensuring public needs
are met. However, several trends have continued to emerge within the social entrepreneurship
spectrum bridging the gap between these sectors hence creating conducive environment for
social entrepreneurs to emerge and grow.
In private sectors for example, businesses and employees are increasingly engaging in activities
previously regarded as non-profitable as many have started engaging in educational and social
projects providing companies’ opportunity to offer services that could not have been considered
in the first place or regarded as government activities (Light, 2003). Osborne and Gaebler
(1993) journal reports states that, between 1999 and 2002, the U.S government reported to have
awarded about 700,000 contracts in federal funds to private enterprises and the public sectors
seem to have also shifted their focus from maximizing profits to engaging in social activities.
According to Goldsmith and Eggers (2004), the government engages in social enterprises by
offering opportunities to public enterprises to privatize their firms which call for business ethics
in turn promoting more competitive business environment. Private sectors have also increased
demand for efficiency and accountability and bridged the gaps in public sector delivery and
created public sector responsibility.
Goldsmith and his colleague also argue that social entrepreneurs have increased efficiency in
government funds as they only inject resources to market demands and increased preference
on issues ranging from public utilities to public schools. Government’s strategy of
monopolizing public sectors and reliance on private sectors in managing contracts and
allocating funds has greatly increased social responsibility and helped fill the gap in public
service delivery by ensuring the best services are provided (Goldsmith and Eggers, 2004).
Response to Market failures
As already discussed, social entrepreneurs characterized by their ethical skills are able to
identify to market failures and commit their resources to affect to the neediest in the society.
Because private sectors or even the government are unable to generate enough profits to
respond to these problems, these sectors bridge the gap by finding market opportunities and
maximizing their potential. Under normal circumstances, the government would try to address
the unmet needs by deploying public funds into the sectors, which has already been proven
futile in the long run. Social entrepreneurs in this case present viable options for addressing
market failures by seeking opportunities to create value rather than economical benefit.
Gregory Dees, founder of social entrepreneur argues that market approach to market
evaluations on social improvement do not adequately identify harms for people who cannot
afford to pay for the service and social entrepreneurs presence would distinctly cater for the
economy’s needs (Battle&Dees, 2006, p.160).
Social entrepreneurs insight exploration of societal problems have the ability to provide
transformational benefit that targets education and employment activities as well as the
marginalized areas that would have never been considered by the government. Wolk (2004)
categorizes market approaches into three broad perspectives that include; “no market approach,
limited market and low-profit market approach in targeting beneficiaries and responding to
market failures” (p.168).
He identifies no market approach as a social entrepreneurship strategy that offers products and
services to its potential beneficiaries without requesting for any payments. So this could mean
that the organization depends entirely on its own funding to sustain the initiatives. Limited
market approach on the other hand required beneficiaries to pay partial of the costs so sustain
the project activities, a common trend exhibited in non-profit organizations. He explains low-
profit market approach to require full payment of goods and services obtained as illustrated in
most private organizations that have the potential of generating profits (Wolk, 2004, p.168).
Transformative Innovations
Social entrepreneurs are described by many scholars as change agents, creating systematic
change by introducing new ideas and persuading others to adopt, changing social patterns that
create social problems through breaking patterns. In transformative perspective, Bill Drayton
defines social entrepreneurs as creative thinkers continuously striving for innovations.
Transformative ideas can be seen through the invention of new technologies, methods of
production, supply sources and distribution outlets and social entrepreneurs have for this case
taken these innovative approaches further by devising strategies that have benefited the whole
society (Ashoka, 2010). Social entrepreneur have been evidenced to combine their own
innovative skills, research obtained from public sources and political influence in attaining
their goals. Their ability to involve major players in the entrepreneurship activities character
sets them apart from the traditional profit oriented organizations (Wolk, 2004, p.20).
Financial Sustainability
Market analysts urge private organizations and business to should try and find a model that
responds to their unique characters of their social problem. Wolk (2004) statements stressed
organization to obtain their own financial sustainability that will cushion them through the hard
economic times and engage in social reality projects that prefer productivity and efficient
management of their resources. He argues that businesses that adopt this approach often report
good report results on organizational performance and cost benefit returns on investment.
These organizations are also required to integrated financial and programmatic initiatives into
business activities to effectively capture organization problems and maximize their profits
(Wolk, 2004, p.170).
Non-financial Resources
Non-financial resources also known as volunteers are social entrepreneurs deemed to posses
both skilled and unskilled education and may at one time rely on donations to increase the
sustainability of their initiatives. These volunteers engage in public activities that develop and
implement social solutions like the Hurricane Katrina volunteers that came out in large
numbers to complete intensely needed work in a way the government could have never afforded
by themselves (Wolk, 2004, p.171).
Social entrepreneurs in New York State
Social enterprise is a new breed of entrepreneurship that exhibits the characteristics of
innovation, risk taking and large-scale transformation. They have provided a fertile ground for
young and upcoming entrepreneurship growth by identifying present change in social
economic environment. On New York perspective, the practice of responding to market failures
with transformative, financially sustainable innovations aimed at solving societal issues is
advancing at pace that exceeds comfort zone causing the government to suffer substantial
losses in funding charitable organizations. Although there exist a variety of projects within the
New Yolk state that seems to address serious challenges faced by the society, local businessmen
and social entrepreneurs are called upon by the State’s comptroller to mobilize their efforts in
implementing solutions that will lower administrative burdens and improve state’s
accountability and oversight (Dinapoli, 2010, p.1).
Some of the State’s initiatives that include youth programs, education services and arts council
are currently being threatened by the economic downturn and social entrepreneurs are for this
case trusted to have the potential for transform the social innovations. Dinapoli (2010) gives
us a perfect example of a successful community-based initiatives that have helped stimulate
the economy by illustrating the 2006 human service organizations social entrepreneurship
initiative that reported revenues of $132.9 billion in over 24,000 NFPs and provided nearly 1.2
million jobs which contributes to about 17% of the States work force. While in June 2009, the
State was reported to have had 31,000 contractors with NFPs totaling to $14.6 billion (Dinapoli,
2010, p.1).
New York State has also been facing serious issues in regard to increased demand for goods
and services resulting to increase pressure on the State’s budget. For example, between 2008
and 2009, the State’s unemployment rates increased from 5.8% to 8.9% simultaneously and
rose from 6.0 % in 2008 to10.3% in 2009 in the New York City. The overwhelming numbers
of dependable people increased the number of people receiving food stamps by 17.5% between
January and October the same year. The State continues to struggle with program funding as
more households continue to seek assistance of all types.
Dinapoli (2010) mentions other States deficit that might have increased pressure on demand
for goods and services to include; the Home Energy Assistance Program (HEAP) increased
deficit of 36.3 percent between 2008 and 2009, the State’s budget deficit of $4.1billion for the
fiscal year 2009-2010, and the projected deficit of more than $23 billion expected to hit through
SFY between 2011 to 2011. Charitable activities have also reduced their contributions to social
activities and private corporations and philanthropic organizations no longer provide
significant funds to finance societal services (Dinapoli, 2010, p.2).
Contracts Delays and Late Payments
Quite a number of not for profit (NFPs) organizations receive funding from the State through
contract allocations. According to the Office of the State Comptroller (OSC) of New York State,
about 87% of state contracts in 2009 were reported to have been delayed as a result of the
economic downturn. These delays forced NFPs to perform activities without any payments
hence resulting to increased borrowing to finance their projects. Dinapoli (2010) reports
indicated that about 69% of NFPs resorted to borrowing due the delayed government contracts
and payments. This gap can be bridged by businesses involvement in community initiatives
that require social enterprise participation (Dinapoli, 2010, p.4).
Social entrepreneurs have been identified to present change in social economic environment
by engaging businesses in their activities. Social entrepreneurs for this case involve players
such as volunteers and not for profit organizations in meeting social needs. Some of the inherent
benefits of including community activities in social entrepreneurship include full utilization of
human resources, increased diversity which reduces intercultural conflicts among community
members, enhances work relationship based on mutual respect and increased knowledge of
multicultural issues. It is also argued that community involvement Increases commitment
among diverse cultures and across all functions, increases community participation in key-
decision making and problem solving and improves productivity and reduces energy spend in
solving cultural clashes (Chase, 2000, p. 12; Simons, 2000, p.4).).
It’s important for users, service providers, the community and the government to stay ahead of
the societal challenges. Policy makers in this case require the public to take active roles in
providing innovative ideas to handle these changes. Chase (2000) requires the integration
between society and the economy in evaluating societal needs and the attainment of certain
social and economic goals. Chase (2000) definitions of social entrepreneurship are not aimed
at describing functions of social entrepreneurs but rather as effective instruments for combating
social problems and vehicle for social cohesion.
He defines social entrepreneurs as nonprofit agencies that maximize their mission-related
performance through development of new ventures or by reorganizing existing activities to
improve operational effectiveness. For profit companies that are involved in social activities
can also be referred as social enterprises embedded in social purpose. Non profit can be linked
to a wide range of foundations, associated organizations and organizations that operate outside
the parameters of common markets (Chase, 2000, p.12).
Although little research has been done on nonprofit organization from social entrepreneurship
perspective, Wolk (2004) recognizes them as powerful tools that have revitalized otherwise
deprived areas, communities and localities and produced services that are not being produced
by mainstream commercial enterprises. Ashoka foundation illustrates a perfect example of
social entrepreneurs that have become leaders in social change by providing sources through
inter-sectoral resources without limiting themselves to traditional charitable models.
Social entrepreneurs and nonprofit organization seem to be categorized in the same model of
community service as they both possess common themes in addressing complex social needs
in effective and integrated ways and regenerating communities’ needs. Another common
characteristics exhibited in these two organizations includes their ability to recognize the
society’s need for an incubation period, allows new ventures to mature, undergo rigorous
ongoing assessment to maximize outcomes and identify needs, support and develop them
(Simons, 2000, p.4).
To understand how social entrepreneurs contribute to the society. Three factors keep
reoccurring throughout the essay. First, social entrepreneurs have a capacity to be a leader in
the social field change which is achieved by their ability to break social reforms and design
innovative programs. Second, their rigorous approach in maximizing societal changes and
outcomes. And third, their ability to take outstanding or emerging social problems. The ability
to collaborate, challenge and support community initiatives in reference to the community,
business and government activities achieves them higher in the society (Simons, 2000, p.4).
Challenges often faced by social enterprise are their inability to collaborate all the three sectors
into long-term and strategic objectives of innovation, research and capacity building. All the
three sectors are required to harness capacities of all sectors in order to realize sustainable
societal change. For instance, development in social activities requires collaboration of both
research and development funds. Their aim is to provide resources that can be adopted into
different communities and service providers that will adapt rapidly to changing political, social
and funding environment. Research is also needed as means of investment in promoting good
practice and development of good policy (Simons, 2000, p.4).
Nonprofit organizations and social enterprises continue to seek solutions to social problems by
providing easy to interpret results. Their initiatives translate changing latent needs into explicit
demands, provide innovative goods and services by developing or running the local or
interregional networks, integrating human and financial services for mutual benefit. Just as
traditional enterprises are critical to such areas such as industry and technology, social
entrepreneurs are as well critical to areas of human needs such as health, environment, young
people, and revitalizing communities.
They transform the community by generating initiative approaches to needy private and public
sectors as well as nonprofit sectors (Wolk, 2004). Until corporations are willing to be
strategically involved in funding, designing and implementing community based programs,
corporate donations will still be necessary. Corporate should also work with volunteers in
implement positive and productive community initiatives. Although research in this essay keep
shifting from charitable activities to social entrepreneurship, its important to note that social
entrepreneurs still serve as seedbeds for innovations (Simons, 2000, p.1).
Adaptation of social entrepreneur initiatives into the community has however not been without
challenges. Providing leadership in a dynamic community often receives resistance in
adaptation and the sufferers are always the needy society members. Cooperation between
economic and social players, including government funding welfare programs should be
encouraged since they are the main reason for the growth of social enterprise.
Social entrepreneur have the ability to enhance their research capacity by strategizing in
research alliances and partnering with communities and government to ensure accurate
identification of problems and appropriate provision of resources. One best activity obtained
from social entrepreneurs should be combined community development and business skills to
ensure continued developments. The type of interventions emerging from social enterprise
model should focus on measures of community social capacity rather than concentrating on
profit motives (Simons, 2000, p.3).
Government Support for Social Entrepreneurs
Social entrepreneurs help in testing and developing promising solutions and compliment
governments role in addressing market failures that benefit the citizens. Billy shore founder of
Share Our Strength pointed out that social entrepreneurs create a pipeline for the government,
they take more risks and do things the government cannot do since they are closer to people.
Social entrepreneurship have added value to the community research and addressed major
micro-dimensions in the society that could otherwise have been ignored.
Their approach has also helped the government recognize the compatibility of their approach
in informing and influencing social policy according to emerging models hence improving
relationship between themselves and non-governmental organizations. Social entrepreneurs are
hoped for benefits, develop skills in anticipation and responding to those most at risk, and
enhance the ability to broker evidence based policy development.
They develop close to the grassroots, they interpret and anticipate the needs of most vulnerable
groups and further their integration into social and professional life. They can be hotbeds for
ideas and experiments. After they identify new and emerging demands, they present their ideas
to the public sector decision makers through their partnership with them. Their ethical approach
to new ideas adds extra value to production of goods and services to the society and decrease
administrative burdens (Wolk, 2004, p.188).
Building capacity for societal change and fostering the social innovation requires deliberate
strategies to foster the development of social enterprise and social entrepreneurs who drive
them. Having collected qualitative data from the government, social entrepreneurs are in a
better position to become brokers of evidence based policy development. They have a wealth
of knowledge and wisdom based on experience with the disadvantaged that can facilitate the
adoption of innovative policies at the central, regional and local governments. They facilitate
the community greater sense of partnership into the markets generated wealth, unlocking
opportunities and encourage community participation into policy making process (Wolk, 2004,
p.188).
Successful implementation of social entrepreneurship skills relies upon the active participation
of the three sectors which includes the government, business and community focused activities.
Social entrepreneurs for this case are required to remain alert to any for strategic alliance with
other segments of society that would help realize their dreams. Their main objective of the
strategic alliances is to facilitate the initiation and maintenance of relations across sectors and
help realize key outcomes, combating social exclusion, promotion of social cohesion and
unlocking opportunities for constructive participation.
They also act as outcomes measurements and provide reference points for the development of
benchmarks to assess ongoing and planned activities. Responding to the disadvantaged
simultaneously requires working for societal change for effective and sustainable outcomes. It
considers taking what is considered risky to provide joint leadership in working with others for
more a cohesive society (Wolk, 2004, p.189).
Social entrepreneurs are best known to leverage both public and private sectors, and test and
develop solutions. As evident from research gathered around the globe, the United States
government lacks strategic measures to help address the country’s social problems. The
government however has over the years tried supporting social entrepreneurs through creating
enabling environment for social entrepreneurial initiatives, rewarding initiatives for
performing, encouraging social innovation, scaling initiative success and producing knowledge
that enhances social entrepreneur efforts (Wolk, 2004, p.189).
Launching new initiatives in the markets may be a challenging task for social entrepreneurs.
To help them endure trials of the start up phase, many foundations such as Echoing Green and
Ashoka have been set up to provide support for early organizational development. Various
academic programs that sponsor competition and awards have also stepped up to encourage
social innovation and foundation of new initiatives.
The government should in this case follow this approach by taking proactive roles in
encouraging social innovation by acting as seedbeds in supporting their initiatives mostly in
the start-up phases. For example, the ITNAmerica would not have achieved its goals without
the federal monetary support. The Transit IDEA program sponsored by the Transport Research
Board benefited the public by providing feasibility study that enabled the foundation explore
senior citizens consumer behavior related to fee-based automobile transport services and
helped the foundation explore innovative payment plans and information system technology
(Wolk, 2004, p.189).
Social entrepreneurs often experience barriers addressing social problems, and the government
should in this case help by creating an enabling environment through removing barriers,
supporting collaboration and lending credibility. Existing laws and policy changes can act as
barrier for social innovation and the government should shift its focus from bureaucratic rules
and allow social cohesion and sustainable development. The government ca also show support
by rewarding performance. Howard Husock, the director of the Manhattan Institute Social
entrepreneurship Initiative points out in Wolk (2004) that “social entrepreneurs want access to
reliable sources of financing that recognize performance” (p.191).
Therefore the government can step up by supporting their initiatives through performance-
based rewards and by funding and purchasing their products and services. For example, the
RSVP’s initiative of reducing recidivism among criminal offenders, San Francisco city
managers continued funding RSVP line item long after grand funding ran out. Another example
is illustrated in Arkenstone Reading Machine that was purchased by U.S. Department of
Veterans Affair (VA) hospitals (Wolk, 2004, p.192).
Most societal innovations rely on published information provided by the government in helping
them find the target social problems and identify how many people are affected. Available
research data, funds evaluation that provide critical information documented by the
government helps in identifying problems and compare various interventions against standard
for success for those working towards solving social problems. Some of the initiatives that have
relied on government‘s data include KaBOOM and Benetech in understanding the nature of
the social problem.
For example, the federal funded ITNAmerica financed transport services that revealed the
safety concerns for older drivers that have become essential for citizens. Consensus data
provided by the government also helped social entrepreneurs predict the growing size of
American population that allowed program planning. Social entrepreneurs use government
reports to initiate projects, development and start up similar programs around the country. In
overall, government data is important in identifying social problems, setting standards and
gauging success (Wolk, 2004, p.196).
Conclusion
Research obtained from this essay argues that collaboration of any strategic plans in support of
the social entrepreneurship is particularly important to policy makers. Collaboration of
community members and the government in social entrepreneurship should therefore be
encouraged as it has seen to influence social entrepreneurship growth in the recent years.
Integration of business models and government initiative roles in utilizing market innovation
and productivity in responding to market failures, providing goods and services will decrease
administrative burdens, create transformative solutions and financial sustainable innovations
aimed at solving social problem.
The government on the other hand should shift its focus of bureaucratic rules and concentrate
on entrepreneurship innovations that provided a fertile ground for growth. In reducing New
York State’s deficit, the government should standardize contracts, make timely payments,
prioritize state funding and encourage financial support. Since social entrepreneurs facilitate
the community greater sense of partnership into the markets generated wealth, unlocking
opportunities that would have otherwise been ignored and includes community input into the
policy making process, public and private sectors partnership should always be encouraged in
order to develop solutions.
Organizations on the other hand should integrated financial and programmatic initiatives into
business activities to effectively capture organization problems and maximize their profits.
Incorporating new ideas from experts in the field of social entrepreneurship provides a fertile
ground for young and upcoming entrepreneurship growth by identifying present change in a
social economic environment. In evaluating the benefits of social entrepreneurs in our society,
it’s important for the government to award their efforts through sponsorship, purchase of their
products, prize awards and providing necessary research to facilitate their innovations.
Although there exist a variety of projects within the New Yolk state that seems to address
serious challenges faced by the society, local businessmen and social entrepreneurs are called
upon by the to mobilize their efforts in implementing solutions that will lower administrative
burdens and improve state’s accountability and lives of the local citizens. Since the process of
social entrepreneurship and its strategic goals for improving social welfare of the society
requires collaboration of different sectors across the economy, public, private and the
community enterprises should work in unity to help facilitate the initiation and maintenance of
innovative activities.
Social Entrepreneurs
Ashoka (2010) describes social entrepreneurs to be “people with ambitious and persistence
skills in tackling major social issues that offer new ideas for wide-scale change”(p.1). They
take proactive approaches in trying to change the system and provide solutions to societal
problems by mobilizing the entire society to take the leaps. Their initiatives focus on solving
the societal issues rather than leaving the issues to the government or business sectors. He also
defines them as mass recruiters with ethical skills and have the ability to mobilize people to
stand up for their ideas and implement them.
Social entrepreneurship use market-driven business model in addressing key environmental
issues and critical social needs. They take full responsibility of their project initiatives as they
don’t rely on government shifting focus. Ashoka (2010) also states that these kind of
entrepreneurs “ have the ability to grow to meet needs and priorities of the communities it
serves, as opposed to public sector limited to funds provided by the government” (p.1).
His definitions fits bigger concept of societal innovations as it broadly describes them as
entrepreneurs who provides solutions that are effective, efficient and sustainable to solve the
society social problems. The definitions are not limited to enterprise based approaches to
solving critical issues but also a social enterprise for social innovation. It should however be
noted that social enterprise is not about balancing the double standards of profit and social
impact but to obtain community sustainment projects (Ashoka, 2010).
Despite minimum support from the government and local volunteers, there seems to be general
agreement among the supporters of social entrepreneurship as to its key underlying goals and
their consequences for societal change. Social entrepreneurship innovative and interpretive
approach to societal problem has gained world wide recognition mainly from media houses
and policy makers, as a significant contributor to a country’s economy and to represent
distinctive part of the country’s social and economic activities.
These supporters deem to be building a perfect example of government and corporate bodies’
involvement in social activities. The United States government for example government
supports social entrepreneurs by allocating about $1 trillion every year to federal funds
dedicated to solving social issues. The monetary support may not be enough in the long run
since these organizations always desire for capital to develop their activities. Wolk (2004,
p.151) in his statement argues the government to form an alliance with social entrepreneurs to
generate transformative and cost-effective solutions to the most challenging social problems.
Incorporating new ideas from experts in the field of social entrepreneurship provides a fertile
ground for young and upcoming entrepreneurship growth by identifying present change in a
social economic environment. In evaluating the benefits of social entrepreneurs in our society,
it’s important to determine who social entrepreneurs are, how they benefit the government as
well as private and public businesses and what the government is doing to support them
(Simons, 2000, p.4).
The emergence of social entrepreneurs
Since the focus here is on the how social entrepreneurs has influenced the economy and
provided solutions to societal problems, three stages of responding to societal needs can be
identified. These stages, which correspond very closely with Roger and Osberg (2007, p.30)
include; a) market failures b) transformative innovations and; 3) financial sustainability. To
determine how social entrepreneur emerged as nexus from these factors, it’s important to
establish how it helped the government and improved the lives of public official constituents.
Although different aspects of social entrepreneur appear in all parts of the essay, case examples
illustrated throughout the paper help us understand how social entrepreneurship leverage public
and private resources, test and implement solutions to social by highlighting a number of
successful social entrepreneur initiatives (Wolk 2004, p156).
It was also realized that the triangulation of three sectors of the economy that consisted of the
government, private and public sectors acts as viable transport for innovation. However, there
appears to be a particular issue with regard to collaboration between social entrepreneurs and
the government. Their relationship has proven elusive and largely fruitless in resolving social
problems, transforming and implementing financially stable solutions. In order to enhance
functional relationship between these sectors, Martin and Osberg (2007, p.30) proposes for a
more rigorous approach of government involvement in social entrepreneurship that would later
boosted the economy (Martin& Osberg, 2007).
It’s quite unfortunate that the government has made little efforts in support of social-
entrepreneur initiatives. There has been growing consensus about government involvement in
social entrepreneurship initiatives with many speculating on their significant contribution.
Wolk (2004) mentions some of the strategies government has put in place in support of social
entrepreneur innovative and interpretive approach to include; 1) helping heighten their success
2) reward their performance 3) create supportive environment for innovation 4) encourage
them to innovate and; 5) offer knowledge through published reports and data to help them solve
problems (Wolk, 2004, p157).
History of Social entrepreneurship
According to Organization for Economic Co-Operation and Development (2006), quite a
majority of Americans live in poverty with about one quarter of the adults failing to complete
high school. The country’s health sector was also reported to have ranked 37 in the world’s
health review which was equivalent to status of a developing nation. These declines in both
economic and health sectors has increased the need for social entrepreneurship and its promises
as a means of addressing daunting social needs. Given the magnitude of needs the economy
has, the U.S government for this case is required to inject large sources of funds from federal
reserves, local government and the state to help solve these problems.
In attempting to fill this gap, Wolk (2004, p.155) proposes that the government should look
into the social entrepreneurship assistance for now ideas. He adds that the collaboration
between the two sectors will effectively identify societal needs and provide viable solutions to
the problems. His proposal throughout the essay attempts to define what social entrepreneur is
based on case studies and expert ideas and breaks the new ground in exploring new ways in
which government leaders as well as other constituents are benefiting from their efforts.
In today’s dynamic economy, there’s nothing as powerful as new ideas. Shoka (2010) quotes
more historical examples of social entrepreneurs to include “Susan B. Anthony (U.S.): Fought
for Women’s Rights in the United States, including the right to control property and helped
spearhead adoption of the 19th amendment” (p.1). He also mentions Vinaba Bhave founder of
the Land Gift Movement and the Italian social entrepreneur Dr. Maria Montessori founder of
Early Childhood Education among others (Ashoka, 2010).
In 2007, President George W. Bush acknowledged a variety of social entrepreneurs who have
helped the American society achieve a competitive age. Among the honored guests were Julie
Aigner-Clarke, founder of the Children Video Company and Baby Einstein producer of the
Child Safety Video. In his statement, president Bush (2007) acknowledged Julie’s efforts by
stating that
Julie represents the great enterprising spirit of America. And she is using her success to help
others….we are please to welcome this talented business entrepreneur and generous social
entrepreneur (p.1).
The president’s exploration of creative tasks delineateb by social entrepreneurs towards
community development applauded their efforts in responding to market failures, creating
transformative and financially sustainable innovations aimed at solving social problems.
Popular media has not been left behind on recognizing social entrepreneurs in our society. A
variety of media personalities for example have tried to redefined the term social
entrepreneurship to a greater household name. The Economists, Harvard Business Review, The
New York times among others have echoed this sentiment in an attempt to assess social
entrepreneurship achievements by publicizing their efforts.
According to Schumpeter (1982), markets exhibit a range of entrepreneur characteristics that
include innovative, risk-taking and large scale transformation. People deemed to possess these
characteristics were recognized in the 2006 U.S News and World Report to include Wendy
Kopp, founder of Teach For America, Michael Brown and Ali Khazei, founder of City Year
among others. Also included in the category were Grameen Bank, a Nobel Peace Winner,
Victoria Hale, founder of OneWorld Health Institute and Jim Fructerman from the MacArthur
Foundation (Wolk, 2004, 6).
Some historic examples of social innovators that changed the American social landscape are
also mentioned by Wolk (2004) to include Florence Nightingale of the 1800s foundation of the
modern field of nursing and Horace Mann, founder of public education. Wolk (2004) studies
argue that a social entrepreneur represent a distinctive part of a country’ social and economic
life and the United Stated for this case has gained tremendously. American entrepreneurship
can be traced within the context of changes that have taken place since 1980s.
The first entrepreneur recognized during that time was Edward Skloot who founded a non profit
consulting firm interested in creating business ventures. His work was published in Harvard
Business Review in 1983 as “nonprofit entrepreneurship” (Skloot, 1983, p.22) as a description
of business ventures that diversify nonprofit organization funding streams. Bill Drayton
founder of Ashoka came into play in 1981 as an Innovator for the Public to seek, support and
publicize public entrepreneurs. Pater Drucker of the management expert book was recognized
in 1985 among the first entrepreneurs to describe a phenomenon that extended into multiple
sectors (Battle& Dees, 2006, p.150).
Towards the mid 1990s social entrepreneurs began to gain new meaning as many scholars and
presses described them as anyone who started a nonprofit organization, or any business man
who integrated social responsibility into their operations. Here, social entrepreneurship is
described broadly to include a variety of organization structures and activities within the social
entrepreneurship context. Wolk (2004) argues here that social entrepreneurship stems from
initiatives that tend to exhibit the characteristics of innovations and risk taking.
He mentions various examples of social innovators throughout his research in illustrating how
entrepreneur initiatives act as seedbeds for development for non profit organizations, for profit
organizations and rather government programs. For this reason, it’s important to explain the
threes sectors in both social and economic perspective of an American economy by describe
their specific roles and responsibilities of in social entrepreneurship.. Below is an illustrated of
how social entrepreneurs have benefited the society within the context of public, private and
voluntary organizations and a description of trends that have eliminated the boundaries
between these sectors (Wolk, 2004, p.158).
Private Sector
Building capacity for societal change and fostering the social innovation requires full
participation of private and public sectors as well as voluntary organizations. A private sector
is defined by Wolk (2004) as “organization that incorporates activities of small business,
corporation and enterprises in utilizing market exchange for goods and services while
maximizing their profits” (p.158). Their strategies to foster development of social enterprises
and social entrepreneurship drive innovation and productivity into the economy.
Economists have long identified innovation as one of the major contributors to private sectors.
A former 1900s scholar Joseph Schumer once commended in Milton (1982) that “Further
contemporary economist Milton Friedman has argued that free markets, competition, and
consumer choices are also essential components of capitalism” (p.50). According to Wolk
(2004) reports, private sectors in the U.S economy represent approximately $13 trillion a year
in gross domestic product ranking the country top among the world’s largest economy.
This sector is also reported to be the major contributor to the country’s work force with 115
million employees currently working in private organizations. The public sector on the other
hand consists of about 87,900 government units with $4.3 trillion in earnings with 18 million
employees, while the non profit sectors contributes about $1.4 billion in revenue with 9.4
million employees and consists about 1.4 million organizations. The alliance between the three
sectors in carrying out social entrepreneurship has been credited to improve availability of jobs,
stimulate innovations and build wealth for the nation (Wolk, 2004, p.160).
Public Sectors
The public sector in support of social entrepreneurship is mentioned by Wolk (2004) to include
the following activities; 1) addressing inequalities in the markets by helping families living in
poverty by providing unemployment benefits and measurements for disaster assistance; 2)
providing public facilities such as policing, public defense, education and libraries to the most
needy in the society. In relation to market failure perspective, it seems complicated to define
the relationship between public sectors and social entrepreneurship as the services provided are
more than what the public is willing to pay for.
Social entrepreneurship distinctly addresses market failures since they are not profit oriented
and address the un-met public needs. The government role in re-distributing services to address
market failures is another way of contributing to social entrepreneurship. Its support of private
sectors in providing goods for the public helps address market inequalities and foster
environment for initiative development. Although a lot has been done to support these
initiatives, the government continues to face pressure in allocating resources to meet all the
societal needs (Wolk, 2004, p.161).
Non Profit Sectors
Non profit sectors have been traditionally known to engage in a variety of activities that support
social goals. Perfect examples of such organizations include private hospitals and schools,
religious organizations, and social service providers. Nonprofit sectors efforts in support social
activities are recognized when both private and public sectors have failed to meet particular
social needs and since they can not distribute the profits to their leaders, these sectors are placed
at a better position to use their revenues to sustain growth and grow their organizations.
Although they are by far the smallest sectors, nonprofit organization are known to be the fastest
growing organizations. In 1994 for example, the nonprofit organization were reported to have
doubled in number with almost 65 % growth rate which added up to 10.5% of the country’s
work force (Wolk, 2004, p.161).
Nicholls (2006) a scholar from Oxford university defines social entrepreneur to include both
multi-dimensional and dynamic construct of the economy rather than their organizational form.
All the three sectors play distinctive roles in resolving societal needs by ensuring public needs
are met. However, several trends have continued to emerge within the social entrepreneurship
spectrum bridging the gap between these sectors hence creating conducive environment for
social entrepreneurs to emerge and grow.
In private sectors for example, businesses and employees are increasingly engaging in activities
previously regarded as non-profitable as many have started engaging in educational and social
projects providing companies’ opportunity to offer services that could not have been considered
in the first place or regarded as government activities (Light, 2003). Osborne and Gaebler
(1993) journal reports states that, between 1999 and 2002, the U.S government reported to have
awarded about 700,000 contracts in federal funds to private enterprises and the public sectors
seem to have also shifted their focus from maximizing profits to engaging in social activities.
According to Goldsmith and Eggers (2004), the government engages in social enterprises by
offering opportunities to public enterprises to privatize their firms which call for business ethics
in turn promoting more competitive business environment. Private sectors have also increased
demand for efficiency and accountability and bridged the gaps in public sector delivery and
created public sector responsibility.
Goldsmith and his colleague also argue that social entrepreneurs have increased efficiency in
government funds as they only inject resources to market demands and increased preference
on issues ranging from public utilities to public schools. Government’s strategy of
monopolizing public sectors and reliance on private sectors in managing contracts and
allocating funds has greatly increased social responsibility and helped fill the gap in public
service delivery by ensuring the best services are provided (Goldsmith and Eggers, 2004).
Response to Market failures
As already discussed, social entrepreneurs characterized by their ethical skills are able to
identify to market failures and commit their resources to affect to the neediest in the society.
Because private sectors or even the government are unable to generate enough profits to
respond to these problems, these sectors bridge the gap by finding market opportunities and
maximizing their potential. Under normal circumstances, the government would try to address
the unmet needs by deploying public funds into the sectors, which has already been proven
futile in the long run. Social entrepreneurs in this case present viable options for addressing
market failures by seeking opportunities to create value rather than economical benefit.
Gregory Dees, founder of social entrepreneur argues that market approach to market
evaluations on social improvement do not adequately identify harms for people who cannot
afford to pay for the service and social entrepreneurs presence would distinctly cater for the
economy’s needs (Battle&Dees, 2006, p.160).
Social entrepreneurs insight exploration of societal problems have the ability to provide
transformational benefit that targets education and employment activities as well as the
marginalized areas that would have never been considered by the government. Wolk (2004)
categorizes market approaches into three broad perspectives that include; “no market approach,
limited market and low-profit market approach in targeting beneficiaries and responding to
market failures” (p.168).
He identifies no market approach as a social entrepreneurship strategy that offers products and
services to its potential beneficiaries without requesting for any payments. So this could mean
that the organization depends entirely on its own funding to sustain the initiatives. Limited
market approach on the other hand required beneficiaries to pay partial of the costs so sustain
the project activities, a common trend exhibited in non-profit organizations. He explains low-
profit market approach to require full payment of goods and services obtained as illustrated in
most private organizations that have the potential of generating profits (Wolk, 2004, p.168).
Transformative Innovations
Social entrepreneurs are described by many scholars as change agents, creating systematic
change by introducing new ideas and persuading others to adopt, changing social patterns that
create social problems through breaking patterns. In transformative perspective, Bill Drayton
defines social entrepreneurs as creative thinkers continuously striving for innovations.
Transformative ideas can be seen through the invention of new technologies, methods of
production, supply sources and distribution outlets and social entrepreneurs have for this case
taken these innovative approaches further by devising strategies that have benefited the whole
society (Ashoka, 2010). Social entrepreneur have been evidenced to combine their own
innovative skills, research obtained from public sources and political influence in attaining
their goals. Their ability to involve major players in the entrepreneurship activities character
sets them apart from the traditional profit oriented organizations (Wolk, 2004, p.20).
Financial Sustainability
Market analysts urge private organizations and business to should try and find a model that
responds to their unique characters of their social problem. Wolk (2004) statements stressed
organization to obtain their own financial sustainability that will cushion them through the hard
economic times and engage in social reality projects that prefer productivity and efficient
management of their resources. He argues that businesses that adopt this approach often report
good report results on organizational performance and cost benefit returns on investment.
These organizations are also required to integrated financial and programmatic initiatives into
business activities to effectively capture organization problems and maximize their profits
(Wolk, 2004, p.170).
Non-financial Resources
Non-financial resources also known as volunteers are social entrepreneurs deemed to posses
both skilled and unskilled education and may at one time rely on donations to increase the
sustainability of their initiatives. These volunteers engage in public activities that develop and
implement social solutions like the Hurricane Katrina volunteers that came out in large
numbers to complete intensely needed work in a way the government could have never afforded
by themselves (Wolk, 2004, p.171).
Social entrepreneurs in New York State
Social enterprise is a new breed of entrepreneurship that exhibits the characteristics of
innovation, risk taking and large-scale transformation. They have provided a fertile ground for
young and upcoming entrepreneurship growth by identifying present change in social
economic environment. On New York perspective, the practice of responding to market failures
with transformative, financially sustainable innovations aimed at solving societal issues is
advancing at pace that exceeds comfort zone causing the government to suffer substantial
losses in funding charitable organizations. Although there exist a variety of projects within the
New Yolk state that seems to address serious challenges faced by the society, local businessmen
and social entrepreneurs are called upon by the State’s comptroller to mobilize their efforts in
implementing solutions that will lower administrative burdens and improve state’s
accountability and oversight (Dinapoli, 2010, p.1).
Some of the State’s initiatives that include youth programs, education services and arts council
are currently being threatened by the economic downturn and social entrepreneurs are for this
case trusted to have the potential for transform the social innovations. Dinapoli (2010) gives
us a perfect example of a successful community-based initiatives that have helped stimulate
the economy by illustrating the 2006 human service organizations social entrepreneurship
initiative that reported revenues of $132.9 billion in over 24,000 NFPs and provided nearly 1.2
million jobs which contributes to about 17% of the States work force. While in June 2009, the
State was reported to have had 31,000 contractors with NFPs totaling to $14.6 billion (Dinapoli,
2010, p.1).
New York State has also been facing serious issues in regard to increased demand for goods
and services resulting to increase pressure on the State’s budget. For example, between 2008
and 2009, the State’s unemployment rates increased from 5.8% to 8.9% simultaneously and
rose from 6.0 % in 2008 to10.3% in 2009 in the New York City. The overwhelming numbers
of dependable people increased the number of people receiving food stamps by 17.5% between
January and October the same year. The State continues to struggle with program funding as
more households continue to seek assistance of all types.
Dinapoli (2010) mentions other States deficit that might have increased pressure on demand
for goods and services to include; the Home Energy Assistance Program (HEAP) increased
deficit of 36.3 percent between 2008 and 2009, the State’s budget deficit of $4.1billion for the
fiscal year 2009-2010, and the projected deficit of more than $23 billion expected to hit through
SFY between 2011 to 2011. Charitable activities have also reduced their contributions to social
activities and private corporations and philanthropic organizations no longer provide
significant funds to finance societal services (Dinapoli, 2010, p.2).
Contracts Delays and Late Payments
Quite a number of not for profit (NFPs) organizations receive funding from the State through
contract allocations. According to the Office of the State Comptroller (OSC) of New York State,
about 87% of state contracts in 2009 were reported to have been delayed as a result of the
economic downturn. These delays forced NFPs to perform activities without any payments
hence resulting to increased borrowing to finance their projects. Dinapoli (2010) reports
indicated that about 69% of NFPs resorted to borrowing due the delayed government contracts
and payments. This gap can be bridged by businesses involvement in community initiatives
that require social enterprise participation (Dinapoli, 2010, p.4).
Social entrepreneurs have been identified to present change in social economic environment
by engaging businesses in their activities. Social entrepreneurs for this case involve players
such as volunteers and not for profit organizations in meeting social needs. Some of the inherent
benefits of including community activities in social entrepreneurship include full utilization of
human resources, increased diversity which reduces intercultural conflicts among community
members, enhances work relationship based on mutual respect and increased knowledge of
multicultural issues. It is also argued that community involvement Increases commitment
among diverse cultures and across all functions, increases community participation in key-
decision making and problem solving and improves productivity and reduces energy spend in
solving cultural clashes (Chase, 2000, p. 12; Simons, 2000, p.4).).
It’s important for users, service providers, the community and the government to stay ahead of
the societal challenges. Policy makers in this case require the public to take active roles in
providing innovative ideas to handle these changes. Chase (2000) requires the integration
between society and the economy in evaluating societal needs and the attainment of certain
social and economic goals. Chase (2000) definitions of social entrepreneurship are not aimed
at describing functions of social entrepreneurs but rather as effective instruments for combating
social problems and vehicle for social cohesion.
He defines social entrepreneurs as nonprofit agencies that maximize their mission-related
performance through development of new ventures or by reorganizing existing activities to
improve operational effectiveness. For profit companies that are involved in social activities
can also be referred as social enterprises embedded in social purpose. Non profit can be linked
to a wide range of foundations, associated organizations and organizations that operate outside
the parameters of common markets (Chase, 2000, p.12).
Although little research has been done on nonprofit organization from social entrepreneurship
perspective, Wolk (2004) recognizes them as powerful tools that have revitalized otherwise
deprived areas, communities and localities and produced services that are not being produced
by mainstream commercial enterprises. Ashoka foundation illustrates a perfect example of
social entrepreneurs that have become leaders in social change by providing sources through
inter-sectoral resources without limiting themselves to traditional charitable models.
Social entrepreneurs and nonprofit organization seem to be categorized in the same model of
community service as they both possess common themes in addressing complex social needs
in effective and integrated ways and regenerating communities’ needs. Another common
characteristics exhibited in these two organizations includes their ability to recognize the
society’s need for an incubation period, allows new ventures to mature, undergo rigorous
ongoing assessment to maximize outcomes and identify needs, support and develop them
(Simons, 2000, p.4).
To understand how social entrepreneurs contribute to the society. Three factors keep
reoccurring throughout the essay. First, social entrepreneurs have a capacity to be a leader in
the social field change which is achieved by their ability to break social reforms and design
innovative programs. Second, their rigorous approach in maximizing societal changes and
outcomes. And third, their ability to take outstanding or emerging social problems. The ability
to collaborate, challenge and support community initiatives in reference to the community,
business and government activities achieves them higher in the society (Simons, 2000, p.4).
Challenges often faced by social enterprise are their inability to collaborate all the three sectors
into long-term and strategic objectives of innovation, research and capacity building. All the
three sectors are required to harness capacities of all sectors in order to realize sustainable
societal change. For instance, development in social activities requires collaboration of both
research and development funds. Their aim is to provide resources that can be adopted into
different communities and service providers that will adapt rapidly to changing political, social
and funding environment. Research is also needed as means of investment in promoting good
practice and development of good policy (Simons, 2000, p.4).
Nonprofit organizations and social enterprises continue to seek solutions to social problems by
providing easy to interpret results. Their initiatives translate changing latent needs into explicit
demands, provide innovative goods and services by developing or running the local or
interregional networks, integrating human and financial services for mutual benefit. Just as
traditional enterprises are critical to such areas such as industry and technology, social
entrepreneurs are as well critical to areas of human needs such as health, environment, young
people, and revitalizing communities.
They transform the community by generating initiative approaches to needy private and public
sectors as well as nonprofit sectors (Wolk, 2004). Until corporations are willing to be
strategically involved in funding, designing and implementing community based programs,
corporate donations will still be necessary. Corporate should also work with volunteers in
implement positive and productive community initiatives. Although research in this essay keep
shifting from charitable activities to social entrepreneurship, its important to note that social
entrepreneurs still serve as seedbeds for innovations (Simons, 2000, p.1).
Adaptation of social entrepreneur initiatives into the community has however not been without
challenges. Providing leadership in a dynamic community often receives resistance in
adaptation and the sufferers are always the needy society members. Cooperation between
economic and social players, including government funding welfare programs should be
encouraged since they are the main reason for the growth of social enterprise.
Social entrepreneur have the ability to enhance their research capacity by strategizing in
research alliances and partnering with communities and government to ensure accurate
identification of problems and appropriate provision of resources. One best activity obtained
from social entrepreneurs should be combined community development and business skills to
ensure continued developments. The type of interventions emerging from social enterprise
model should focus on measures of community social capacity rather than concentrating on
profit motives (Simons, 2000, p.3).
Government Support for Social Entrepreneurs
Social entrepreneurs help in testing and developing promising solutions and compliment
governments role in addressing market failures that benefit the citizens. Billy shore founder of
Share Our Strength pointed out that social entrepreneurs create a pipeline for the government,
they take more risks and do things the government cannot do since they are closer to people.
Social entrepreneurship have added value to the community research and addressed major
micro-dimensions in the society that could otherwise have been ignored.
Their approach has also helped the government recognize the compatibility of their approach
in informing and influencing social policy according to emerging models hence improving
relationship between themselves and non-governmental organizations. Social entrepreneurs are
hoped for benefits, develop skills in anticipation and responding to those most at risk, and
enhance the ability to broker evidence based policy development.
They develop close to the grassroots, they interpret and anticipate the needs of most vulnerable
groups and further their integration into social and professional life. They can be hotbeds for
ideas and experiments. After they identify new and emerging demands, they present their ideas
to the public sector decision makers through their partnership with them. Their ethical approach
to new ideas adds extra value to production of goods and services to the society and decrease
administrative burdens (Wolk, 2004, p.188).
Building capacity for societal change and fostering the social innovation requires deliberate
strategies to foster the development of social enterprise and social entrepreneurs who drive
them. Having collected qualitative data from the government, social entrepreneurs are in a
better position to become brokers of evidence based policy development. They have a wealth
of knowledge and wisdom based on experience with the disadvantaged that can facilitate the
adoption of innovative policies at the central, regional and local governments. They facilitate
the community greater sense of partnership into the markets generated wealth, unlocking
opportunities and encourage community participation into policy making process (Wolk, 2004,
p.188).
Successful implementation of social entrepreneurship skills relies upon the active participation
of the three sectors which includes the government, business and community focused activities.
Social entrepreneurs for this case are required to remain alert to any for strategic alliance with
other segments of society that would help realize their dreams. Their main objective of the
strategic alliances is to facilitate the initiation and maintenance of relations across sectors and
help realize key outcomes, combating social exclusion, promotion of social cohesion and
unlocking opportunities for constructive participation.
They also act as outcomes measurements and provide reference points for the development of
benchmarks to assess ongoing and planned activities. Responding to the disadvantaged
simultaneously requires working for societal change for effective and sustainable outcomes. It
considers taking what is considered risky to provide joint leadership in working with others for
more a cohesive society (Wolk, 2004, p.189).
Social entrepreneurs are best known to leverage both public and private sectors, and test and
develop solutions. As evident from research gathered around the globe, the United States
government lacks strategic measures to help address the country’s social problems. The
government however has over the years tried supporting social entrepreneurs through creating
enabling environment for social entrepreneurial initiatives, rewarding initiatives for
performing, encouraging social innovation, scaling initiative success and producing knowledge
that enhances social entrepreneur efforts (Wolk, 2004, p.189).
Launching new initiatives in the markets may be a challenging task for social entrepreneurs.
To help them endure trials of the start up phase, many foundations such as Echoing Green and
Ashoka have been set up to provide support for early organizational development. Various
academic programs that sponsor competition and awards have also stepped up to encourage
social innovation and foundation of new initiatives.
The government should in this case follow this approach by taking proactive roles in
encouraging social innovation by acting as seedbeds in supporting their initiatives mostly in
the start-up phases. For example, the ITNAmerica would not have achieved its goals without
the federal monetary support. The Transit IDEA program sponsored by the Transport Research
Board benefited the public by providing feasibility study that enabled the foundation explore
senior citizens consumer behavior related to fee-based automobile transport services and
helped the foundation explore innovative payment plans and information system technology
(Wolk, 2004, p.189).
Social entrepreneurs often experience barriers addressing social problems, and the government
should in this case help by creating an enabling environment through removing barriers,
supporting collaboration and lending credibility. Existing laws and policy changes can act as
barrier for social innovation and the government should shift its focus from bureaucratic rules
and allow social cohesion and sustainable development. The government ca also show support
by rewarding performance. Howard Husock, the director of the Manhattan Institute Social
entrepreneurship Initiative points out in Wolk (2004) that “social entrepreneurs want access to
reliable sources of financing that recognize performance” (p.191).
Therefore the government can step up by supporting their initiatives through performance-
based rewards and by funding and purchasing their products and services. For example, the
RSVP’s initiative of reducing recidivism among criminal offenders, San Francisco city
managers continued funding RSVP line item long after grand funding ran out. Another example
is illustrated in Arkenstone Reading Machine that was purchased by U.S. Department of
Veterans Affair (VA) hospitals (Wolk, 2004, p.192).
Most societal innovations rely on published information provided by the government in helping
them find the target social problems and identify how many people are affected. Available
research data, funds evaluation that provide critical information documented by the
government helps in identifying problems and compare various interventions against standard
for success for those working towards solving social problems. Some of the initiatives that have
relied on government‘s data include KaBOOM and Benetech in understanding the nature of
the social problem.
For example, the federal funded ITNAmerica financed transport services that revealed the
safety concerns for older drivers that have become essential for citizens. Consensus data
provided by the government also helped social entrepreneurs predict the growing size of
American population that allowed program planning. Social entrepreneurs use government
reports to initiate projects, development and start up similar programs around the country. In
overall, government data is important in identifying social problems, setting standards and
gauging success (Wolk, 2004, p.196).
Conclusion
Research obtained from this essay argues that collaboration of any strategic plans in support of
the social entrepreneurship is particularly important to policy makers. Collaboration of
community members and the government in social entrepreneurship should therefore be
encouraged as it has seen to influence social entrepreneurship growth in the recent years.
Integration of business models and government initiative roles in utilizing market innovation
and productivity in responding to market failures, providing goods and services will decrease
administrative burdens, create transformative solutions and financial sustainable innovations
aimed at solving social problem.
The government on the other hand should shift its focus of bureaucratic rules and concentrate
on entrepreneurship innovations that provided a fertile ground for growth. In reducing New
York State’s deficit, the government should standardize contracts, make timely payments,
prioritize state funding and encourage financial support. Since social entrepreneurs facilitate
the community greater sense of partnership into the markets generated wealth, unlocking
opportunities that would have otherwise been ignored and includes community input into the
policy making process, public and private sectors partnership should always be encouraged in
order to develop solutions.
Organizations on the other hand should integrated financial and programmatic initiatives into
business activities to effectively capture organization problems and maximize their profits.
Incorporating new ideas from experts in the field of social entrepreneurship provides a fertile
ground for young and upcoming entrepreneurship growth by identifying present change in a
social economic environment. In evaluating the benefits of social entrepreneurs in our society,
it’s important for the government to award their efforts through sponsorship, purchase of their
products, prize awards and providing necessary research to facilitate their innovations.
Although there exist a variety of projects within the New Yolk state that seems to address
serious challenges faced by the society, local businessmen and social entrepreneurs are called
upon by the to mobilize their efforts in implementing solutions that will lower administrative
burdens and improve state’s accountability and lives of the local citizens. Since the process of
social entrepreneurship and its strategic goals for improving social welfare of the society
requires collaboration of different sectors across the economy, public, private and the
community enterprises should work in unity to help facilitate the initiation and maintenance of
innovative activities.
Social Entrepreneurs
Ashoka (2010) describes social entrepreneurs to be “people with ambitious and persistence
skills in tackling major social issues that offer new ideas for wide-scale change”(p.1). They
take proactive approaches in trying to change the system and provide solutions to societal
problems by mobilizing the entire society to take the leaps. Their initiatives focus on solving
the societal issues rather than leaving the issues to the government or business sectors. He also
defines them as mass recruiters with ethical skills and have the ability to mobilize people to
stand up for their ideas and implement them.
Social entrepreneurship use market-driven business model in addressing key environmental
issues and critical social needs. They take full responsibility of their project initiatives as they
don’t rely on government shifting focus. Ashoka (2010) also states that these kind of
entrepreneurs “ have the ability to grow to meet needs and priorities of the communities it
serves, as opposed to public sector limited to funds provided by the government” (p.1).
His definitions fits bigger concept of societal innovations as it broadly describes them as
entrepreneurs who provides solutions that are effective, efficient and sustainable to solve the
society social problems. The definitions are not limited to enterprise based approaches to
solving critical issues but also a social enterprise for social innovation. It should however be
noted that social enterprise is not about balancing the double standards of profit and social
impact but to obtain community sustainment projects (Ashoka, 2010).
Despite minimum support from the government and local volunteers, there seems to be general
agreement among the supporters of social entrepreneurship as to its key underlying goals and
their consequences for societal change. Social entrepreneurship innovative and interpretive
approach to societal problem has gained world wide recognition mainly from media houses
and policy makers, as a significant contributor to a country’s economy and to represent
distinctive part of the country’s social and economic activities.
These supporters deem to be building a perfect example of government and corporate bodies’
involvement in social activities. The United States government for example government
supports social entrepreneurs by allocating about $1 trillion every year to federal funds
dedicated to solving social issues. The monetary support may not be enough in the long run
since these organizations always desire for capital to develop their activities. Wolk (2004,
p.151) in his statement argues the government to form an alliance with social entrepreneurs to
generate transformative and cost-effective solutions to the most challenging social problems.
Incorporating new ideas from experts in the field of social entrepreneurship provides a fertile
ground for young and upcoming entrepreneurship growth by identifying present change in a
social economic environment. In evaluating the benefits of social entrepreneurs in our society,
it’s important to determine who social entrepreneurs are, how they benefit the government as
well as private and public businesses and what the government is doing to support them
(Simons, 2000, p.4).
The emergence of social entrepreneurs
Since the focus here is on the how social entrepreneurs has influenced the economy and
provided solutions to societal problems, three stages of responding to societal needs can be
identified. These stages, which correspond very closely with Roger and Osberg (2007, p.30)
include; a) market failures b) transformative innovations and; 3) financial sustainability. To
determine how social entrepreneur emerged as nexus from these factors, it’s important to
establish how it helped the government and improved the lives of public official constituents.
Although different aspects of social entrepreneur appear in all parts of the essay, case examples
illustrated throughout the paper help us understand how social entrepreneurship leverage public
and private resources, test and implement solutions to social by highlighting a number of
successful social entrepreneur initiatives (Wolk 2004, p156).
It was also realized that the triangulation of three sectors of the economy that consisted of the
government, private and public sectors acts as viable transport for innovation. However, there
appears to be a particular issue with regard to collaboration between social entrepreneurs and
the government. Their relationship has proven elusive and largely fruitless in resolving social
problems, transforming and implementing financially stable solutions. In order to enhance
functional relationship between these sectors, Martin and Osberg (2007, p.30) proposes for a
more rigorous approach of government involvement in social entrepreneurship that would later
boosted the economy (Martin& Osberg, 2007).
It’s quite unfortunate that the government has made little efforts in support of social-
entrepreneur initiatives. There has been growing consensus about government involvement in
social entrepreneurship initiatives with many speculating on their significant contribution.
Wolk (2004) mentions some of the strategies government has put in place in support of social
entrepreneur innovative and interpretive approach to include; 1) helping heighten their success
2) reward their performance 3) create supportive environment for innovation 4) encourage
them to innovate and; 5) offer knowledge through published reports and data to help them solve
problems (Wolk, 2004, p157).
History of Social entrepreneurship
According to Organization for Economic Co-Operation and Development (2006), quite a
majority of Americans live in poverty with about one quarter of the adults failing to complete
high school. The country’s health sector was also reported to have ranked 37 in the world’s
health review which was equivalent to status of a developing nation. These declines in both
economic and health sectors has increased the need for social entrepreneurship and its promises
as a means of addressing daunting social needs. Given the magnitude of needs the economy
has, the U.S government for this case is required to inject large sources of funds from federal
reserves, local government and the state to help solve these problems.
In attempting to fill this gap, Wolk (2004, p.155) proposes that the government should look
into the social entrepreneurship assistance for now ideas. He adds that the collaboration
between the two sectors will effectively identify societal needs and provide viable solutions to
the problems. His proposal throughout the essay attempts to define what social entrepreneur is
based on case studies and expert ideas and breaks the new ground in exploring new ways in
which government leaders as well as other constituents are benefiting from their efforts.
In today’s dynamic economy, there’s nothing as powerful as new ideas. Shoka (2010) quotes
more historical examples of social entrepreneurs to include “Susan B. Anthony (U.S.): Fought
for Women’s Rights in the United States, including the right to control property and helped
spearhead adoption of the 19th amendment” (p.1). He also mentions Vinaba Bhave founder of
the Land Gift Movement and the Italian social entrepreneur Dr. Maria Montessori founder of
Early Childhood Education among others (Ashoka, 2010).
In 2007, President George W. Bush acknowledged a variety of social entrepreneurs who have
helped the American society achieve a competitive age. Among the honored guests were Julie
Aigner-Clarke, founder of the Children Video Company and Baby Einstein producer of the
Child Safety Video. In his statement, president Bush (2007) acknowledged Julie’s efforts by
stating that
Julie represents the great enterprising spirit of America. And she is using her success to help
others….we are please to welcome this talented business entrepreneur and generous social
entrepreneur (p.1).
The president’s exploration of creative tasks delineateb by social entrepreneurs towards
community development applauded their efforts in responding to market failures, creating
transformative and financially sustainable innovations aimed at solving social problems.
Popular media has not been left behind on recognizing social entrepreneurs in our society. A
variety of media personalities for example have tried to redefined the term social
entrepreneurship to a greater household name. The Economists, Harvard Business Review, The
New York times among others have echoed this sentiment in an attempt to assess social
entrepreneurship achievements by publicizing their efforts.
According to Schumpeter (1982), markets exhibit a range of entrepreneur characteristics that
include innovative, risk-taking and large scale transformation. People deemed to possess these
characteristics were recognized in the 2006 U.S News and World Report to include Wendy
Kopp, founder of Teach For America, Michael Brown and Ali Khazei, founder of City Year
among others. Also included in the category were Grameen Bank, a Nobel Peace Winner,
Victoria Hale, founder of OneWorld Health Institute and Jim Fructerman from the MacArthur
Foundation (Wolk, 2004, 6).
Some historic examples of social innovators that changed the American social landscape are
also mentioned by Wolk (2004) to include Florence Nightingale of the 1800s foundation of the
modern field of nursing and Horace Mann, founder of public education. Wolk (2004) studies
argue that a social entrepreneur represent a distinctive part of a country’ social and economic
life and the United Stated for this case has gained tremendously. American entrepreneurship
can be traced within the context of changes that have taken place since 1980s.
The first entrepreneur recognized during that time was Edward Skloot who founded a non profit
consulting firm interested in creating business ventures. His work was published in Harvard
Business Review in 1983 as “nonprofit entrepreneurship” (Skloot, 1983, p.22) as a description
of business ventures that diversify nonprofit organization funding streams. Bill Drayton
founder of Ashoka came into play in 1981 as an Innovator for the Public to seek, support and
publicize public entrepreneurs. Pater Drucker of the management expert book was recognized
in 1985 among the first entrepreneurs to describe a phenomenon that extended into multiple
sectors (Battle& Dees, 2006, p.150).
Towards the mid 1990s social entrepreneurs began to gain new meaning as many scholars and
presses described them as anyone who started a nonprofit organization, or any business man
who integrated social responsibility into their operations. Here, social entrepreneurship is
described broadly to include a variety of organization structures and activities within the social
entrepreneurship context. Wolk (2004) argues here that social entrepreneurship stems from
initiatives that tend to exhibit the characteristics of innovations and risk taking.
He mentions various examples of social innovators throughout his research in illustrating how
entrepreneur initiatives act as seedbeds for development for non profit organizations, for profit
organizations and rather government programs. For this reason, it’s important to explain the
threes sectors in both social and economic perspective of an American economy by describe
their specific roles and responsibilities of in social entrepreneurship.. Below is an illustrated of
how social entrepreneurs have benefited the society within the context of public, private and
voluntary organizations and a description of trends that have eliminated the boundaries
between these sectors (Wolk, 2004, p.158).
Private Sector
Building capacity for societal change and fostering the social innovation requires full
participation of private and public sectors as well as voluntary organizations. A private sector
is defined by Wolk (2004) as “organization that incorporates activities of small business,
corporation and enterprises in utilizing market exchange for goods and services while
maximizing their profits” (p.158). Their strategies to foster development of social enterprises
and social entrepreneurship drive innovation and productivity into the economy.
Economists have long identified innovation as one of the major contributors to private sectors.
A former 1900s scholar Joseph Schumer once commended in Milton (1982) that “Further
contemporary economist Milton Friedman has argued that free markets, competition, and
consumer choices are also essential components of capitalism” (p.50). According to Wolk
(2004) reports, private sectors in the U.S economy represent approximately $13 trillion a year
in gross domestic product ranking the country top among the world’s largest economy.
This sector is also reported to be the major contributor to the country’s work force with 115
million employees currently working in private organizations. The public sector on the other
hand consists of about 87,900 government units with $4.3 trillion in earnings with 18 million
employees, while the non profit sectors contributes about $1.4 billion in revenue with 9.4
million employees and consists about 1.4 million organizations. The alliance between the three
sectors in carrying out social entrepreneurship has been credited to improve availability of jobs,
stimulate innovations and build wealth for the nation (Wolk, 2004, p.160).
Public Sectors
The public sector in support of social entrepreneurship is mentioned by Wolk (2004) to include
the following activities; 1) addressing inequalities in the markets by helping families living in
poverty by providing unemployment benefits and measurements for disaster assistance; 2)
providing public facilities such as policing, public defense, education and libraries to the most
needy in the society. In relation to market failure perspective, it seems complicated to define
the relationship between public sectors and social entrepreneurship as the services provided are
more than what the public is willing to pay for.
Social entrepreneurship distinctly addresses market failures since they are not profit oriented
and address the un-met public needs. The government role in re-distributing services to address
market failures is another way of contributing to social entrepreneurship. Its support of private
sectors in providing goods for the public helps address market inequalities and foster
environment for initiative development. Although a lot has been done to support these
initiatives, the government continues to face pressure in allocating resources to meet all the
societal needs (Wolk, 2004, p.161).
Non Profit Sectors
Non profit sectors have been traditionally known to engage in a variety of activities that support
social goals. Perfect examples of such organizations include private hospitals and schools,
religious organizations, and social service providers. Nonprofit sectors efforts in support social
activities are recognized when both private and public sectors have failed to meet particular
social needs and since they can not distribute the profits to their leaders, these sectors are placed
at a better position to use their revenues to sustain growth and grow their organizations.
Although they are by far the smallest sectors, nonprofit organization are known to be the fastest
growing organizations. In 1994 for example, the nonprofit organization were reported to have
doubled in number with almost 65 % growth rate which added up to 10.5% of the country’s
work force (Wolk, 2004, p.161).
Nicholls (2006) a scholar from Oxford university defines social entrepreneur to include both
multi-dimensional and dynamic construct of the economy rather than their organizational form.
All the three sectors play distinctive roles in resolving societal needs by ensuring public needs
are met. However, several trends have continued to emerge within the social entrepreneurship
spectrum bridging the gap between these sectors hence creating conducive environment for
social entrepreneurs to emerge and grow.
In private sectors for example, businesses and employees are increasingly engaging in activities
previously regarded as non-profitable as many have started engaging in educational and social
projects providing companies’ opportunity to offer services that could not have been considered
in the first place or regarded as government activities (Light, 2003). Osborne and Gaebler
(1993) journal reports states that, between 1999 and 2002, the U.S government reported to have
awarded about 700,000 contracts in federal funds to private enterprises and the public sectors
seem to have also shifted their focus from maximizing profits to engaging in social activities.
According to Goldsmith and Eggers (2004), the government engages in social enterprises by
offering opportunities to public enterprises to privatize their firms which call for business ethics
in turn promoting more competitive business environment. Private sectors have also increased
demand for efficiency and accountability and bridged the gaps in public sector delivery and
created public sector responsibility.
Goldsmith and his colleague also argue that social entrepreneurs have increased efficiency in
government funds as they only inject resources to market demands and increased preference
on issues ranging from public utilities to public schools. Government’s strategy of
monopolizing public sectors and reliance on private sectors in managing contracts and
allocating funds has greatly increased social responsibility and helped fill the gap in public
service delivery by ensuring the best services are provided (Goldsmith and Eggers, 2004).
Response to Market failures
As already discussed, social entrepreneurs characterized by their ethical skills are able to
identify to market failures and commit their resources to affect to the neediest in the society.
Because private sectors or even the government are unable to generate enough profits to
respond to these problems, these sectors bridge the gap by finding market opportunities and
maximizing their potential. Under normal circumstances, the government would try to address
the unmet needs by deploying public funds into the sectors, which has already been proven
futile in the long run. Social entrepreneurs in this case present viable options for addressing
market failures by seeking opportunities to create value rather than economical benefit.
Gregory Dees, founder of social entrepreneur argues that market approach to market
evaluations on social improvement do not adequately identify harms for people who cannot
afford to pay for the service and social entrepreneurs presence would distinctly cater for the
economy’s needs (Battle&Dees, 2006, p.160).
Social entrepreneurs insight exploration of societal problems have the ability to provide
transformational benefit that targets education and employment activities as well as the
marginalized areas that would have never been considered by the government. Wolk (2004)
categorizes market approaches into three broad perspectives that include; “no market approach,
limited market and low-profit market approach in targeting beneficiaries and responding to
market failures” (p.168).
He identifies no market approach as a social entrepreneurship strategy that offers products and
services to its potential beneficiaries without requesting for any payments. So this could mean
that the organization depends entirely on its own funding to sustain the initiatives. Limited
market approach on the other hand required beneficiaries to pay partial of the costs so sustain
the project activities, a common trend exhibited in non-profit organizations. He explains low-
profit market approach to require full payment of goods and services obtained as illustrated in
most private organizations that have the potential of generating profits (Wolk, 2004, p.168).
Transformative Innovations
Social entrepreneurs are described by many scholars as change agents, creating systematic
change by introducing new ideas and persuading others to adopt, changing social patterns that
create social problems through breaking patterns. In transformative perspective, Bill Drayton
defines social entrepreneurs as creative thinkers continuously striving for innovations.
Transformative ideas can be seen through the invention of new technologies, methods of
production, supply sources and distribution outlets and social entrepreneurs have for this case
taken these innovative approaches further by devising strategies that have benefited the whole
society (Ashoka, 2010). Social entrepreneur have been evidenced to combine their own
innovative skills, research obtained from public sources and political influence in attaining
their goals. Their ability to involve major players in the entrepreneurship activities character
sets them apart from the traditional profit oriented organizations (Wolk, 2004, p.20).
Financial Sustainability
Market analysts urge private organizations and business to should try and find a model that
responds to their unique characters of their social problem. Wolk (2004) statements stressed
organization to obtain their own financial sustainability that will cushion them through the hard
economic times and engage in social reality projects that prefer productivity and efficient
management of their resources. He argues that businesses that adopt this approach often report
good report results on organizational performance and cost benefit returns on investment.
These organizations are also required to integrated financial and programmatic initiatives into
business activities to effectively capture organization problems and maximize their profits
(Wolk, 2004, p.170).
Non-financial Resources
Non-financial resources also known as volunteers are social entrepreneurs deemed to posses
both skilled and unskilled education and may at one time rely on donations to increase the
sustainability of their initiatives. These volunteers engage in public activities that develop and
implement social solutions like the Hurricane Katrina volunteers that came out in large
numbers to complete intensely needed work in a way the government could have never afforded
by themselves (Wolk, 2004, p.171).
Social entrepreneurs in New York State
Social enterprise is a new breed of entrepreneurship that exhibits the characteristics of
innovation, risk taking and large-scale transformation. They have provided a fertile ground for
young and upcoming entrepreneurship growth by identifying present change in social
economic environment. On New York perspective, the practice of responding to market failures
with transformative, financially sustainable innovations aimed at solving societal issues is
advancing at pace that exceeds comfort zone causing the government to suffer substantial
losses in funding charitable organizations. Although there exist a variety of projects within the
New Yolk state that seems to address serious challenges faced by the society, local businessmen
and social entrepreneurs are called upon by the State’s comptroller to mobilize their efforts in
implementing solutions that will lower administrative burdens and improve state’s
accountability and oversight (Dinapoli, 2010, p.1).
Some of the State’s initiatives that include youth programs, education services and arts council
are currently being threatened by the economic downturn and social entrepreneurs are for this
case trusted to have the potential for transform the social innovations. Dinapoli (2010) gives
us a perfect example of a successful community-based initiatives that have helped stimulate
the economy by illustrating the 2006 human service organizations social entrepreneurship
initiative that reported revenues of $132.9 billion in over 24,000 NFPs and provided nearly 1.2
million jobs which contributes to about 17% of the States work force. While in June 2009, the
State was reported to have had 31,000 contractors with NFPs totaling to $14.6 billion (Dinapoli,
2010, p.1).
New York State has also been facing serious issues in regard to increased demand for goods
and services resulting to increase pressure on the State’s budget. For example, between 2008
and 2009, the State’s unemployment rates increased from 5.8% to 8.9% simultaneously and
rose from 6.0 % in 2008 to10.3% in 2009 in the New York City. The overwhelming numbers
of dependable people increased the number of people receiving food stamps by 17.5% between
January and October the same year. The State continues to struggle with program funding as
more households continue to seek assistance of all types.
Dinapoli (2010) mentions other States deficit that might have increased pressure on demand
for goods and services to include; the Home Energy Assistance Program (HEAP) increased
deficit of 36.3 percent between 2008 and 2009, the State’s budget deficit of $4.1billion for the
fiscal year 2009-2010, and the projected deficit of more than $23 billion expected to hit through
SFY between 2011 to 2011. Charitable activities have also reduced their contributions to social
activities and private corporations and philanthropic organizations no longer provide
significant funds to finance societal services (Dinapoli, 2010, p.2).
Contracts Delays and Late Payments
Quite a number of not for profit (NFPs) organizations receive funding from the State through
contract allocations. According to the Office of the State Comptroller (OSC) of New York State,
about 87% of state contracts in 2009 were reported to have been delayed as a result of the
economic downturn. These delays forced NFPs to perform activities without any payments
hence resulting to increased borrowing to finance their projects. Dinapoli (2010) reports
indicated that about 69% of NFPs resorted to borrowing due the delayed government contracts
and payments. This gap can be bridged by businesses involvement in community initiatives
that require social enterprise participation (Dinapoli, 2010, p.4).
Social entrepreneurs have been identified to present change in social economic environment
by engaging businesses in their activities. Social entrepreneurs for this case involve players
such as volunteers and not for profit organizations in meeting social needs. Some of the inherent
benefits of including community activities in social entrepreneurship include full utilization of
human resources, increased diversity which reduces intercultural conflicts among community
members, enhances work relationship based on mutual respect and increased knowledge of
multicultural issues. It is also argued that community involvement Increases commitment
among diverse cultures and across all functions, increases community participation in key-
decision making and problem solving and improves productivity and reduces energy spend in
solving cultural clashes (Chase, 2000, p. 12; Simons, 2000, p.4).).
It’s important for users, service providers, the community and the government to stay ahead of
the societal challenges. Policy makers in this case require the public to take active roles in
providing innovative ideas to handle these changes. Chase (2000) requires the integration
between society and the economy in evaluating societal needs and the attainment of certain
social and economic goals. Chase (2000) definitions of social entrepreneurship are not aimed
at describing functions of social entrepreneurs but rather as effective instruments for combating
social problems and vehicle for social cohesion.
He defines social entrepreneurs as nonprofit agencies that maximize their mission-related
performance through development of new ventures or by reorganizing existing activities to
improve operational effectiveness. For profit companies that are involved in social activities
can also be referred as social enterprises embedded in social purpose. Non profit can be linked
to a wide range of foundations, associated organizations and organizations that operate outside
the parameters of common markets (Chase, 2000, p.12).
Although little research has been done on nonprofit organization from social entrepreneurship
perspective, Wolk (2004) recognizes them as powerful tools that have revitalized otherwise
deprived areas, communities and localities and produced services that are not being produced
by mainstream commercial enterprises. Ashoka foundation illustrates a perfect example of
social entrepreneurs that have become leaders in social change by providing sources through
inter-sectoral resources without limiting themselves to traditional charitable models.
Social entrepreneurs and nonprofit organization seem to be categorized in the same model of
community service as they both possess common themes in addressing complex social needs
in effective and integrated ways and regenerating communities’ needs. Another common
characteristics exhibited in these two organizations includes their ability to recognize the
society’s need for an incubation period, allows new ventures to mature, undergo rigorous
ongoing assessment to maximize outcomes and identify needs, support and develop them
(Simons, 2000, p.4).
To understand how social entrepreneurs contribute to the society. Three factors keep
reoccurring throughout the essay. First, social entrepreneurs have a capacity to be a leader in
the social field change which is achieved by their ability to break social reforms and design
innovative programs. Second, their rigorous approach in maximizing societal changes and
outcomes. And third, their ability to take outstanding or emerging social problems. The ability
to collaborate, challenge and support community initiatives in reference to the community,
business and government activities achieves them higher in the society (Simons, 2000, p.4).
Challenges often faced by social enterprise are their inability to collaborate all the three sectors
into long-term and strategic objectives of innovation, research and capacity building. All the
three sectors are required to harness capacities of all sectors in order to realize sustainable
societal change. For instance, development in social activities requires collaboration of both
research and development funds. Their aim is to provide resources that can be adopted into
different communities and service providers that will adapt rapidly to changing political, social
and funding environment. Research is also needed as means of investment in promoting good
practice and development of good policy (Simons, 2000, p.4).
Nonprofit organizations and social enterprises continue to seek solutions to social problems by
providing easy to interpret results. Their initiatives translate changing latent needs into explicit
demands, provide innovative goods and services by developing or running the local or
interregional networks, integrating human and financial services for mutual benefit. Just as
traditional enterprises are critical to such areas such as industry and technology, social
entrepreneurs are as well critical to areas of human needs such as health, environment, young
people, and revitalizing communities.
They transform the community by generating initiative approaches to needy private and public
sectors as well as nonprofit sectors (Wolk, 2004). Until corporations are willing to be
strategically involved in funding, designing and implementing community based programs,
corporate donations will still be necessary. Corporate should also work with volunteers in
implement positive and productive community initiatives. Although research in this essay keep
shifting from charitable activities to social entrepreneurship, its important to note that social
entrepreneurs still serve as seedbeds for innovations (Simons, 2000, p.1).
Adaptation of social entrepreneur initiatives into the community has however not been without
challenges. Providing leadership in a dynamic community often receives resistance in
adaptation and the sufferers are always the needy society members. Cooperation between
economic and social players, including government funding welfare programs should be
encouraged since they are the main reason for the growth of social enterprise.
Social entrepreneur have the ability to enhance their research capacity by strategizing in
research alliances and partnering with communities and government to ensure accurate
identification of problems and appropriate provision of resources. One best activity obtained
from social entrepreneurs should be combined community development and business skills to
ensure continued developments. The type of interventions emerging from social enterprise
model should focus on measures of community social capacity rather than concentrating on
profit motives (Simons, 2000, p.3).
Government Support for Social Entrepreneurs
Social entrepreneurs help in testing and developing promising solutions and compliment
governments role in addressing market failures that benefit the citizens. Billy shore founder of
Share Our Strength pointed out that social entrepreneurs create a pipeline for the government,
they take more risks and do things the government cannot do since they are closer to people.
Social entrepreneurship have added value to the community research and addressed major
micro-dimensions in the society that could otherwise have been ignored.
Their approach has also helped the government recognize the compatibility of their approach
in informing and influencing social policy according to emerging models hence improving
relationship between themselves and non-governmental organizations. Social entrepreneurs are
hoped for benefits, develop skills in anticipation and responding to those most at risk, and
enhance the ability to broker evidence based policy development.
They develop close to the grassroots, they interpret and anticipate the needs of most vulnerable
groups and further their integration into social and professional life. They can be hotbeds for
ideas and experiments. After they identify new and emerging demands, they present their ideas
to the public sector decision makers through their partnership with them. Their ethical approach
to new ideas adds extra value to production of goods and services to the society and decrease
administrative burdens (Wolk, 2004, p.188).
Building capacity for societal change and fostering the social innovation requires deliberate
strategies to foster the development of social enterprise and social entrepreneurs who drive
them. Having collected qualitative data from the government, social entrepreneurs are in a
better position to become brokers of evidence based policy development. They have a wealth
of knowledge and wisdom based on experience with the disadvantaged that can facilitate the
adoption of innovative policies at the central, regional and local governments. They facilitate
the community greater sense of partnership into the markets generated wealth, unlocking
opportunities and encourage community participation into policy making process (Wolk, 2004,
p.188).
Successful implementation of social entrepreneurship skills relies upon the active participation
of the three sectors which includes the government, business and community focused activities.
Social entrepreneurs for this case are required to remain alert to any for strategic alliance with
other segments of society that would help realize their dreams. Their main objective of the
strategic alliances is to facilitate the initiation and maintenance of relations across sectors and
help realize key outcomes, combating social exclusion, promotion of social cohesion and
unlocking opportunities for constructive participation.
They also act as outcomes measurements and provide reference points for the development of
benchmarks to assess ongoing and planned activities. Responding to the disadvantaged
simultaneously requires working for societal change for effective and sustainable outcomes. It
considers taking what is considered risky to provide joint leadership in working with others for
more a cohesive society (Wolk, 2004, p.189).
Social entrepreneurs are best known to leverage both public and private sectors, and test and
develop solutions. As evident from research gathered around the globe, the United States
government lacks strategic measures to help address the country’s social problems. The
government however has over the years tried supporting social entrepreneurs through creating
enabling environment for social entrepreneurial initiatives, rewarding initiatives for
performing, encouraging social innovation, scaling initiative success and producing knowledge
that enhances social entrepreneur efforts (Wolk, 2004, p.189).
Launching new initiatives in the markets may be a challenging task for social entrepreneurs.
To help them endure trials of the start up phase, many foundations such as Echoing Green and
Ashoka have been set up to provide support for early organizational development. Various
academic programs that sponsor competition and awards have also stepped up to encourage
social innovation and foundation of new initiatives.
The government should in this case follow this approach by taking proactive roles in
encouraging social innovation by acting as seedbeds in supporting their initiatives mostly in
the start-up phases. For example, the ITNAmerica would not have achieved its goals without
the federal monetary support. The Transit IDEA program sponsored by the Transport Research
Board benefited the public by providing feasibility study that enabled the foundation explore
senior citizens consumer behavior related to fee-based automobile transport services and
helped the foundation explore innovative payment plans and information system technology
(Wolk, 2004, p.189).
Social entrepreneurs often experience barriers addressing social problems, and the government
should in this case help by creating an enabling environment through removing barriers,
supporting collaboration and lending credibility. Existing laws and policy changes can act as
barrier for social innovation and the government should shift its focus from bureaucratic rules
and allow social cohesion and sustainable development. The government ca also show support
by rewarding performance. Howard Husock, the director of the Manhattan Institute Social
entrepreneurship Initiative points out in Wolk (2004) that “social entrepreneurs want access to
reliable sources of financing that recognize performance” (p.191).
Therefore the government can step up by supporting their initiatives through performance-
based rewards and by funding and purchasing their products and services. For example, the
RSVP’s initiative of reducing recidivism among criminal offenders, San Francisco city
managers continued funding RSVP line item long after grand funding ran out. Another example
is illustrated in Arkenstone Reading Machine that was purchased by U.S. Department of
Veterans Affair (VA) hospitals (Wolk, 2004, p.192).
Most societal innovations rely on published information provided by the government in helping
them find the target social problems and identify how many people are affected. Available
research data, funds evaluation that provide critical information documented by the
government helps in identifying problems and compare various interventions against standard
for success for those working towards solving social problems. Some of the initiatives that have
relied on government‘s data include KaBOOM and Benetech in understanding the nature of
the social problem.
For example, the federal funded ITNAmerica financed transport services that revealed the
safety concerns for older drivers that have become essential for citizens. Consensus data
provided by the government also helped social entrepreneurs predict the growing size of
American population that allowed program planning. Social entrepreneurs use government
reports to initiate projects, development and start up similar programs around the country. In
overall, government data is important in identifying social problems, setting standards and
gauging success (Wolk, 2004, p.196).
Conclusion
Research obtained from this essay argues that collaboration of any strategic plans in support of
the social entrepreneurship is particularly important to policy makers. Collaboration of
community members and the government in social entrepreneurship should therefore be
encouraged as it has seen to influence social entrepreneurship growth in the recent years.
Integration of business models and government initiative roles in utilizing market innovation
and productivity in responding to market failures, providing goods and services will decrease
administrative burdens, create transformative solutions and financial sustainable innovations
aimed at solving social problem.
The government on the other hand should shift its focus of bureaucratic rules and concentrate
on entrepreneurship innovations that provided a fertile ground for growth. In reducing New
York State’s deficit, the government should standardize contracts, make timely payments,
prioritize state funding and encourage financial support. Since social entrepreneurs facilitate
the community greater sense of partnership into the markets generated wealth, unlocking
opportunities that would have otherwise been ignored and includes community input into the
policy making process, public and private sectors partnership should always be encouraged in
order to develop solutions.
Organizations on the other hand should integrated financial and programmatic initiatives into
business activities to effectively capture organization problems and maximize their profits.
Incorporating new ideas from experts in the field of social entrepreneurship provides a fertile
ground for young and upcoming entrepreneurship growth by identifying present change in a
social economic environment. In evaluating the benefits of social entrepreneurs in our society,
it’s important for the government to award their efforts through sponsorship, purchase of their
products, prize awards and providing necessary research to facilitate their innovations.
Although there exist a variety of projects within the New Yolk state that seems to address
serious challenges faced by the society, local businessmen and social entrepreneurs are called
upon by the to mobilize their efforts in implementing solutions that will lower administrative
burdens and improve state’s accountability and lives of the local citizens. Since the process of
social entrepreneurship and its strategic goals for improving social welfare of the society
requires collaboration of different sectors across the economy, public, private and the
community enterprises should work in unity to help facilitate the initiation and maintenance of
innovative activities.
Social Entrepreneurs
Ashoka (2010) describes social entrepreneurs to be “people with ambitious and persistence
skills in tackling major social issues that offer new ideas for wide-scale change”(p.1). They
take proactive approaches in trying to change the system and provide solutions to societal
problems by mobilizing the entire society to take the leaps. Their initiatives focus on solving
the societal issues rather than leaving the issues to the government or business sectors. He also
defines them as mass recruiters with ethical skills and have the ability to mobilize people to
stand up for their ideas and implement them.
Social entrepreneurship use market-driven business model in addressing key environmental
issues and critical social needs. They take full responsibility of their project initiatives as they
don’t rely on government shifting focus. Ashoka (2010) also states that these kind of
entrepreneurs “ have the ability to grow to meet needs and priorities of the communities it
serves, as opposed to public sector limited to funds provided by the government” (p.1).
His definitions fits bigger concept of societal innovations as it broadly describes them as
entrepreneurs who provides solutions that are effective, efficient and sustainable to solve the
society social problems. The definitions are not limited to enterprise based approaches to
solving critical issues but also a social enterprise for social innovation. It should however be
noted that social enterprise is not about balancing the double standards of profit and social
impact but to obtain community sustainment projects (Ashoka, 2010).
Despite minimum support from the government and local volunteers, there seems to be general
agreement among the supporters of social entrepreneurship as to its key underlying goals and
their consequences for societal change. Social entrepreneurship innovative and interpretive
approach to societal problem has gained world wide recognition mainly from media houses
and policy makers, as a significant contributor to a country’s economy and to represent
distinctive part of the country’s social and economic activities.
These supporters deem to be building a perfect example of government and corporate bodies’
involvement in social activities. The United States government for example government
supports social entrepreneurs by allocating about $1 trillion every year to federal funds
dedicated to solving social issues. The monetary support may not be enough in the long run
since these organizations always desire for capital to develop their activities. Wolk (2004,
p.151) in his statement argues the government to form an alliance with social entrepreneurs to
generate transformative and cost-effective solutions to the most challenging social problems.
Incorporating new ideas from experts in the field of social entrepreneurship provides a fertile
ground for young and upcoming entrepreneurship growth by identifying present change in a
social economic environment. In evaluating the benefits of social entrepreneurs in our society,
it’s important to determine who social entrepreneurs are, how they benefit the government as
well as private and public businesses and what the government is doing to support them
(Simons, 2000, p.4).
The emergence of social entrepreneurs
Since the focus here is on the how social entrepreneurs has influenced the economy and
provided solutions to societal problems, three stages of responding to societal needs can be
identified. These stages, which correspond very closely with Roger and Osberg (2007, p.30)
include; a) market failures b) transformative innovations and; 3) financial sustainability. To
determine how social entrepreneur emerged as nexus from these factors, it’s important to
establish how it helped the government and improved the lives of public official constituents.
Although different aspects of social entrepreneur appear in all parts of the essay, case examples
illustrated throughout the paper help us understand how social entrepreneurship leverage public
and private resources, test and implement solutions to social by highlighting a number of
successful social entrepreneur initiatives (Wolk 2004, p156).
It was also realized that the triangulation of three sectors of the economy that consisted of the
government, private and public sectors acts as viable transport for innovation. However, there
appears to be a particular issue with regard to collaboration between social entrepreneurs and
the government. Their relationship has proven elusive and largely fruitless in resolving social
problems, transforming and implementing financially stable solutions. In order to enhance
functional relationship between these sectors, Martin and Osberg (2007, p.30) proposes for a
more rigorous approach of government involvement in social entrepreneurship that would later
boosted the economy (Martin& Osberg, 2007).
It’s quite unfortunate that the government has made little efforts in support of social-
entrepreneur initiatives. There has been growing consensus about government involvement in
social entrepreneurship initiatives with many speculating on their significant contribution.
Wolk (2004) mentions some of the strategies government has put in place in support of social
entrepreneur innovative and interpretive approach to include; 1) helping heighten their success
2) reward their performance 3) create supportive environment for innovation 4) encourage
them to innovate and; 5) offer knowledge through published reports and data to help them solve
problems (Wolk, 2004, p157).
History of Social entrepreneurship
According to Organization for Economic Co-Operation and Development (2006), quite a
majority of Americans live in poverty with about one quarter of the adults failing to complete
high school. The country’s health sector was also reported to have ranked 37 in the world’s
health review which was equivalent to status of a developing nation. These declines in both
economic and health sectors has increased the need for social entrepreneurship and its promises
as a means of addressing daunting social needs. Given the magnitude of needs the economy
has, the U.S government for this case is required to inject large sources of funds from federal
reserves, local government and the state to help solve these problems.
In attempting to fill this gap, Wolk (2004, p.155) proposes that the government should look
into the social entrepreneurship assistance for now ideas. He adds that the collaboration
between the two sectors will effectively identify societal needs and provide viable solutions to
the problems. His proposal throughout the essay attempts to define what social entrepreneur is
based on case studies and expert ideas and breaks the new ground in exploring new ways in
which government leaders as well as other constituents are benefiting from their efforts.
In today’s dynamic economy, there’s nothing as powerful as new ideas. Shoka (2010) quotes
more historical examples of social entrepreneurs to include “Susan B. Anthony (U.S.): Fought
for Women’s Rights in the United States, including the right to control property and helped
spearhead adoption of the 19th amendment” (p.1). He also mentions Vinaba Bhave founder of
the Land Gift Movement and the Italian social entrepreneur Dr. Maria Montessori founder of
Early Childhood Education among others (Ashoka, 2010).
In 2007, President George W. Bush acknowledged a variety of social entrepreneurs who have
helped the American society achieve a competitive age. Among the honored guests were Julie
Aigner-Clarke, founder of the Children Video Company and Baby Einstein producer of the
Child Safety Video. In his statement, president Bush (2007) acknowledged Julie’s efforts by
stating that
Julie represents the great enterprising spirit of America. And she is using her success to help
others….we are please to welcome this talented business entrepreneur and generous social
entrepreneur (p.1).
The president’s exploration of creative tasks delineateb by social entrepreneurs towards
community development applauded their efforts in responding to market failures, creating
transformative and financially sustainable innovations aimed at solving social problems.
Popular media has not been left behind on recognizing social entrepreneurs in our society. A
variety of media personalities for example have tried to redefined the term social
entrepreneurship to a greater household name. The Economists, Harvard Business Review, The
New York times among others have echoed this sentiment in an attempt to assess social
entrepreneurship achievements by publicizing their efforts.
According to Schumpeter (1982), markets exhibit a range of entrepreneur characteristics that
include innovative, risk-taking and large scale transformation. People deemed to possess these
characteristics were recognized in the 2006 U.S News and World Report to include Wendy
Kopp, founder of Teach For America, Michael Brown and Ali Khazei, founder of City Year
among others. Also included in the category were Grameen Bank, a Nobel Peace Winner,
Victoria Hale, founder of OneWorld Health Institute and Jim Fructerman from the MacArthur
Foundation (Wolk, 2004, 6).
Some historic examples of social innovators that changed the American social landscape are
also mentioned by Wolk (2004) to include Florence Nightingale of the 1800s foundation of the
modern field of nursing and Horace Mann, founder of public education. Wolk (2004) studies
argue that a social entrepreneur represent a distinctive part of a country’ social and economic
life and the United Stated for this case has gained tremendously. American entrepreneurship
can be traced within the context of changes that have taken place since 1980s.
The first entrepreneur recognized during that time was Edward Skloot who founded a non profit
consulting firm interested in creating business ventures. His work was published in Harvard
Business Review in 1983 as “nonprofit entrepreneurship” (Skloot, 1983, p.22) as a description
of business ventures that diversify nonprofit organization funding streams. Bill Drayton
founder of Ashoka came into play in 1981 as an Innovator for the Public to seek, support and
publicize public entrepreneurs. Pater Drucker of the management expert book was recognized
in 1985 among the first entrepreneurs to describe a phenomenon that extended into multiple
sectors (Battle& Dees, 2006, p.150).
Towards the mid 1990s social entrepreneurs began to gain new meaning as many scholars and
presses described them as anyone who started a nonprofit organization, or any business man
who integrated social responsibility into their operations. Here, social entrepreneurship is
described broadly to include a variety of organization structures and activities within the social
entrepreneurship context. Wolk (2004) argues here that social entrepreneurship stems from
initiatives that tend to exhibit the characteristics of innovations and risk taking.
He mentions various examples of social innovators throughout his research in illustrating how
entrepreneur initiatives act as seedbeds for development for non profit organizations, for profit
organizations and rather government programs. For this reason, it’s important to explain the
threes sectors in both social and economic perspective of an American economy by describe
their specific roles and responsibilities of in social entrepreneurship.. Below is an illustrated of
how social entrepreneurs have benefited the society within the context of public, private and
voluntary organizations and a description of trends that have eliminated the boundaries
between these sectors (Wolk, 2004, p.158).
Private Sector
Building capacity for societal change and fostering the social innovation requires full
participation of private and public sectors as well as voluntary organizations. A private sector
is defined by Wolk (2004) as “organization that incorporates activities of small business,
corporation and enterprises in utilizing market exchange for goods and services while
maximizing their profits” (p.158). Their strategies to foster development of social enterprises
and social entrepreneurship drive innovation and productivity into the economy.
Economists have long identified innovation as one of the major contributors to private sectors.
A former 1900s scholar Joseph Schumer once commended in Milton (1982) that “Further
contemporary economist Milton Friedman has argued that free markets, competition, and
consumer choices are also essential components of capitalism” (p.50). According to Wolk
(2004) reports, private sectors in the U.S economy represent approximately $13 trillion a year
in gross domestic product ranking the country top among the world’s largest economy.
This sector is also reported to be the major contributor to the country’s work force with 115
million employees currently working in private organizations. The public sector on the other
hand consists of about 87,900 government units with $4.3 trillion in earnings with 18 million
employees, while the non profit sectors contributes about $1.4 billion in revenue with 9.4
million employees and consists about 1.4 million organizations. The alliance between the three
sectors in carrying out social entrepreneurship has been credited to improve availability of jobs,
stimulate innovations and build wealth for the nation (Wolk, 2004, p.160).
Public Sectors
The public sector in support of social entrepreneurship is mentioned by Wolk (2004) to include
the following activities; 1) addressing inequalities in the markets by helping families living in
poverty by providing unemployment benefits and measurements for disaster assistance; 2)
providing public facilities such as policing, public defense, education and libraries to the most
needy in the society. In relation to market failure perspective, it seems complicated to define
the relationship between public sectors and social entrepreneurship as the services provided are
more than what the public is willing to pay for.
Social entrepreneurship distinctly addresses market failures since they are not profit oriented
and address the un-met public needs. The government role in re-distributing services to address
market failures is another way of contributing to social entrepreneurship. Its support of private
sectors in providing goods for the public helps address market inequalities and foster
environment for initiative development. Although a lot has been done to support these
initiatives, the government continues to face pressure in allocating resources to meet all the
societal needs (Wolk, 2004, p.161).
Non Profit Sectors
Non profit sectors have been traditionally known to engage in a variety of activities that support
social goals. Perfect examples of such organizations include private hospitals and schools,
religious organizations, and social service providers. Nonprofit sectors efforts in support social
activities are recognized when both private and public sectors have failed to meet particular
social needs and since they can not distribute the profits to their leaders, these sectors are placed
at a better position to use their revenues to sustain growth and grow their organizations.
Although they are by far the smallest sectors, nonprofit organization are known to be the fastest
growing organizations. In 1994 for example, the nonprofit organization were reported to have
doubled in number with almost 65 % growth rate which added up to 10.5% of the country’s
work force (Wolk, 2004, p.161).
Nicholls (2006) a scholar from Oxford university defines social entrepreneur to include both
multi-dimensional and dynamic construct of the economy rather than their organizational form.
All the three sectors play distinctive roles in resolving societal needs by ensuring public needs
are met. However, several trends have continued to emerge within the social entrepreneurship
spectrum bridging the gap between these sectors hence creating conducive environment for
social entrepreneurs to emerge and grow.
In private sectors for example, businesses and employees are increasingly engaging in activities
previously regarded as non-profitable as many have started engaging in educational and social
projects providing companies’ opportunity to offer services that could not have been considered
in the first place or regarded as government activities (Light, 2003). Osborne and Gaebler
(1993) journal reports states that, between 1999 and 2002, the U.S government reported to have
awarded about 700,000 contracts in federal funds to private enterprises and the public sectors
seem to have also shifted their focus from maximizing profits to engaging in social activities.
According to Goldsmith and Eggers (2004), the government engages in social enterprises by
offering opportunities to public enterprises to privatize their firms which call for business ethics
in turn promoting more competitive business environment. Private sectors have also increased
demand for efficiency and accountability and bridged the gaps in public sector delivery and
created public sector responsibility.
Goldsmith and his colleague also argue that social entrepreneurs have increased efficiency in
government funds as they only inject resources to market demands and increased preference
on issues ranging from public utilities to public schools. Government’s strategy of
monopolizing public sectors and reliance on private sectors in managing contracts and
allocating funds has greatly increased social responsibility and helped fill the gap in public
service delivery by ensuring the best services are provided (Goldsmith and Eggers, 2004).
Response to Market failures
As already discussed, social entrepreneurs characterized by their ethical skills are able to
identify to market failures and commit their resources to affect to the neediest in the society.
Because private sectors or even the government are unable to generate enough profits to
respond to these problems, these sectors bridge the gap by finding market opportunities and
maximizing their potential. Under normal circumstances, the government would try to address
the unmet needs by deploying public funds into the sectors, which has already been proven
futile in the long run. Social entrepreneurs in this case present viable options for addressing
market failures by seeking opportunities to create value rather than economical benefit.
Gregory Dees, founder of social entrepreneur argues that market approach to market
evaluations on social improvement do not adequately identify harms for people who cannot
afford to pay for the service and social entrepreneurs presence would distinctly cater for the
economy’s needs (Battle&Dees, 2006, p.160).
Social entrepreneurs insight exploration of societal problems have the ability to provide
transformational benefit that targets education and employment activities as well as the
marginalized areas that would have never been considered by the government. Wolk (2004)
categorizes market approaches into three broad perspectives that include; “no market approach,
limited market and low-profit market approach in targeting beneficiaries and responding to
market failures” (p.168).
He identifies no market approach as a social entrepreneurship strategy that offers products and
services to its potential beneficiaries without requesting for any payments. So this could mean
that the organization depends entirely on its own funding to sustain the initiatives. Limited
market approach on the other hand required beneficiaries to pay partial of the costs so sustain
the project activities, a common trend exhibited in non-profit organizations. He explains low-
profit market approach to require full payment of goods and services obtained as illustrated in
most private organizations that have the potential of generating profits (Wolk, 2004, p.168).
Transformative Innovations
Social entrepreneurs are described by many scholars as change agents, creating systematic
change by introducing new ideas and persuading others to adopt, changing social patterns that
create social problems through breaking patterns. In transformative perspective, Bill Drayton
defines social entrepreneurs as creative thinkers continuously striving for innovations.
Transformative ideas can be seen through the invention of new technologies, methods of
production, supply sources and distribution outlets and social entrepreneurs have for this case
taken these innovative approaches further by devising strategies that have benefited the whole
society (Ashoka, 2010). Social entrepreneur have been evidenced to combine their own
innovative skills, research obtained from public sources and political influence in attaining
their goals. Their ability to involve major players in the entrepreneurship activities character
sets them apart from the traditional profit oriented organizations (Wolk, 2004, p.20).
Financial Sustainability
Market analysts urge private organizations and business to should try and find a model that
responds to their unique characters of their social problem. Wolk (2004) statements stressed
organization to obtain their own financial sustainability that will cushion them through the hard
economic times and engage in social reality projects that prefer productivity and efficient
management of their resources. He argues that businesses that adopt this approach often report
good report results on organizational performance and cost benefit returns on investment.
These organizations are also required to integrated financial and programmatic initiatives into
business activities to effectively capture organization problems and maximize their profits
(Wolk, 2004, p.170).
Non-financial Resources
Non-financial resources also known as volunteers are social entrepreneurs deemed to posses
both skilled and unskilled education and may at one time rely on donations to increase the
sustainability of their initiatives. These volunteers engage in public activities that develop and
implement social solutions like the Hurricane Katrina volunteers that came out in large
numbers to complete intensely needed work in a way the government could have never afforded
by themselves (Wolk, 2004, p.171).
Social entrepreneurs in New York State
Social enterprise is a new breed of entrepreneurship that exhibits the characteristics of
innovation, risk taking and large-scale transformation. They have provided a fertile ground for
young and upcoming entrepreneurship growth by identifying present change in social
economic environment. On New York perspective, the practice of responding to market failures
with transformative, financially sustainable innovations aimed at solving societal issues is
advancing at pace that exceeds comfort zone causing the government to suffer substantial
losses in funding charitable organizations. Although there exist a variety of projects within the
New Yolk state that seems to address serious challenges faced by the society, local businessmen
and social entrepreneurs are called upon by the State’s comptroller to mobilize their efforts in
implementing solutions that will lower administrative burdens and improve state’s
accountability and oversight (Dinapoli, 2010, p.1).
Some of the State’s initiatives that include youth programs, education services and arts council
are currently being threatened by the economic downturn and social entrepreneurs are for this
case trusted to have the potential for transform the social innovations. Dinapoli (2010) gives
us a perfect example of a successful community-based initiatives that have helped stimulate
the economy by illustrating the 2006 human service organizations social entrepreneurship
initiative that reported revenues of $132.9 billion in over 24,000 NFPs and provided nearly 1.2
million jobs which contributes to about 17% of the States work force. While in June 2009, the
State was reported to have had 31,000 contractors with NFPs totaling to $14.6 billion (Dinapoli,
2010, p.1).
New York State has also been facing serious issues in regard to increased demand for goods
and services resulting to increase pressure on the State’s budget. For example, between 2008
and 2009, the State’s unemployment rates increased from 5.8% to 8.9% simultaneously and
rose from 6.0 % in 2008 to10.3% in 2009 in the New York City. The overwhelming numbers
of dependable people increased the number of people receiving food stamps by 17.5% between
January and October the same year. The State continues to struggle with program funding as
more households continue to seek assistance of all types.
Dinapoli (2010) mentions other States deficit that might have increased pressure on demand
for goods and services to include; the Home Energy Assistance Program (HEAP) increased
deficit of 36.3 percent between 2008 and 2009, the State’s budget deficit of $4.1billion for the
fiscal year 2009-2010, and the projected deficit of more than $23 billion expected to hit through
SFY between 2011 to 2011. Charitable activities have also reduced their contributions to social
activities and private corporations and philanthropic organizations no longer provide
significant funds to finance societal services (Dinapoli, 2010, p.2).
Contracts Delays and Late Payments
Quite a number of not for profit (NFPs) organizations receive funding from the State through
contract allocations. According to the Office of the State Comptroller (OSC) of New York State,
about 87% of state contracts in 2009 were reported to have been delayed as a result of the
economic downturn. These delays forced NFPs to perform activities without any payments
hence resulting to increased borrowing to finance their projects. Dinapoli (2010) reports
indicated that about 69% of NFPs resorted to borrowing due the delayed government contracts
and payments. This gap can be bridged by businesses involvement in community initiatives
that require social enterprise participation (Dinapoli, 2010, p.4).
Social entrepreneurs have been identified to present change in social economic environment
by engaging businesses in their activities. Social entrepreneurs for this case involve players
such as volunteers and not for profit organizations in meeting social needs. Some of the inherent
benefits of including community activities in social entrepreneurship include full utilization of
human resources, increased diversity which reduces intercultural conflicts among community
members, enhances work relationship based on mutual respect and increased knowledge of
multicultural issues. It is also argued that community involvement Increases commitment
among diverse cultures and across all functions, increases community participation in key-
decision making and problem solving and improves productivity and reduces energy spend in
solving cultural clashes (Chase, 2000, p. 12; Simons, 2000, p.4).).
It’s important for users, service providers, the community and the government to stay ahead of
the societal challenges. Policy makers in this case require the public to take active roles in
providing innovative ideas to handle these changes. Chase (2000) requires the integration
between society and the economy in evaluating societal needs and the attainment of certain
social and economic goals. Chase (2000) definitions of social entrepreneurship are not aimed
at describing functions of social entrepreneurs but rather as effective instruments for combating
social problems and vehicle for social cohesion.
He defines social entrepreneurs as nonprofit agencies that maximize their mission-related
performance through development of new ventures or by reorganizing existing activities to
improve operational effectiveness. For profit companies that are involved in social activities
can also be referred as social enterprises embedded in social purpose. Non profit can be linked
to a wide range of foundations, associated organizations and organizations that operate outside
the parameters of common markets (Chase, 2000, p.12).
Although little research has been done on nonprofit organization from social entrepreneurship
perspective, Wolk (2004) recognizes them as powerful tools that have revitalized otherwise
deprived areas, communities and localities and produced services that are not being produced
by mainstream commercial enterprises. Ashoka foundation illustrates a perfect example of
social entrepreneurs that have become leaders in social change by providing sources through
inter-sectoral resources without limiting themselves to traditional charitable models.
Social entrepreneurs and nonprofit organization seem to be categorized in the same model of
community service as they both possess common themes in addressing complex social needs
in effective and integrated ways and regenerating communities’ needs. Another common
characteristics exhibited in these two organizations includes their ability to recognize the
society’s need for an incubation period, allows new ventures to mature, undergo rigorous
ongoing assessment to maximize outcomes and identify needs, support and develop them
(Simons, 2000, p.4).
To understand how social entrepreneurs contribute to the society. Three factors keep
reoccurring throughout the essay. First, social entrepreneurs have a capacity to be a leader in
the social field change which is achieved by their ability to break social reforms and design
innovative programs. Second, their rigorous approach in maximizing societal changes and
outcomes. And third, their ability to take outstanding or emerging social problems. The ability
to collaborate, challenge and support community initiatives in reference to the community,
business and government activities achieves them higher in the society (Simons, 2000, p.4).
Challenges often faced by social enterprise are their inability to collaborate all the three sectors
into long-term and strategic objectives of innovation, research and capacity building. All the
three sectors are required to harness capacities of all sectors in order to realize sustainable
societal change. For instance, development in social activities requires collaboration of both
research and development funds. Their aim is to provide resources that can be adopted into
different communities and service providers that will adapt rapidly to changing political, social
and funding environment. Research is also needed as means of investment in promoting good
practice and development of good policy (Simons, 2000, p.4).
Nonprofit organizations and social enterprises continue to seek solutions to social problems by
providing easy to interpret results. Their initiatives translate changing latent needs into explicit
demands, provide innovative goods and services by developing or running the local or
interregional networks, integrating human and financial services for mutual benefit. Just as
traditional enterprises are critical to such areas such as industry and technology, social
entrepreneurs are as well critical to areas of human needs such as health, environment, young
people, and revitalizing communities.
They transform the community by generating initiative approaches to needy private and public
sectors as well as nonprofit sectors (Wolk, 2004). Until corporations are willing to be
strategically involved in funding, designing and implementing community based programs,
corporate donations will still be necessary. Corporate should also work with volunteers in
implement positive and productive community initiatives. Although research in this essay keep
shifting from charitable activities to social entrepreneurship, its important to note that social
entrepreneurs still serve as seedbeds for innovations (Simons, 2000, p.1).
Adaptation of social entrepreneur initiatives into the community has however not been without
challenges. Providing leadership in a dynamic community often receives resistance in
adaptation and the sufferers are always the needy society members. Cooperation between
economic and social players, including government funding welfare programs should be
encouraged since they are the main reason for the growth of social enterprise.
Social entrepreneur have the ability to enhance their research capacity by strategizing in
research alliances and partnering with communities and government to ensure accurate
identification of problems and appropriate provision of resources. One best activity obtained
from social entrepreneurs should be combined community development and business skills to
ensure continued developments. The type of interventions emerging from social enterprise
model should focus on measures of community social capacity rather than concentrating on
profit motives (Simons, 2000, p.3).
Government Support for Social Entrepreneurs
Social entrepreneurs help in testing and developing promising solutions and compliment
governments role in addressing market failures that benefit the citizens. Billy shore founder of
Share Our Strength pointed out that social entrepreneurs create a pipeline for the government,
they take more risks and do things the government cannot do since they are closer to people.
Social entrepreneurship have added value to the community research and addressed major
micro-dimensions in the society that could otherwise have been ignored.
Their approach has also helped the government recognize the compatibility of their approach
in informing and influencing social policy according to emerging models hence improving
relationship between themselves and non-governmental organizations. Social entrepreneurs are
hoped for benefits, develop skills in anticipation and responding to those most at risk, and
enhance the ability to broker evidence based policy development.
They develop close to the grassroots, they interpret and anticipate the needs of most vulnerable
groups and further their integration into social and professional life. They can be hotbeds for
ideas and experiments. After they identify new and emerging demands, they present their ideas
to the public sector decision makers through their partnership with them. Their ethical approach
to new ideas adds extra value to production of goods and services to the society and decrease
administrative burdens (Wolk, 2004, p.188).
Building capacity for societal change and fostering the social innovation requires deliberate
strategies to foster the development of social enterprise and social entrepreneurs who drive
them. Having collected qualitative data from the government, social entrepreneurs are in a
better position to become brokers of evidence based policy development. They have a wealth
of knowledge and wisdom based on experience with the disadvantaged that can facilitate the
adoption of innovative policies at the central, regional and local governments. They facilitate
the community greater sense of partnership into the markets generated wealth, unlocking
opportunities and encourage community participation into policy making process (Wolk, 2004,
p.188).
Successful implementation of social entrepreneurship skills relies upon the active participation
of the three sectors which includes the government, business and community focused activities.
Social entrepreneurs for this case are required to remain alert to any for strategic alliance with
other segments of society that would help realize their dreams. Their main objective of the
strategic alliances is to facilitate the initiation and maintenance of relations across sectors and
help realize key outcomes, combating social exclusion, promotion of social cohesion and
unlocking opportunities for constructive participation.
They also act as outcomes measurements and provide reference points for the development of
benchmarks to assess ongoing and planned activities. Responding to the disadvantaged
simultaneously requires working for societal change for effective and sustainable outcomes. It
considers taking what is considered risky to provide joint leadership in working with others for
more a cohesive society (Wolk, 2004, p.189).
Social entrepreneurs are best known to leverage both public and private sectors, and test and
develop solutions. As evident from research gathered around the globe, the United States
government lacks strategic measures to help address the country’s social problems. The
government however has over the years tried supporting social entrepreneurs through creating
enabling environment for social entrepreneurial initiatives, rewarding initiatives for
performing, encouraging social innovation, scaling initiative success and producing knowledge
that enhances social entrepreneur efforts (Wolk, 2004, p.189).
Launching new initiatives in the markets may be a challenging task for social entrepreneurs.
To help them endure trials of the start up phase, many foundations such as Echoing Green and
Ashoka have been set up to provide support for early organizational development. Various
academic programs that sponsor competition and awards have also stepped up to encourage
social innovation and foundation of new initiatives.
The government should in this case follow this approach by taking proactive roles in
encouraging social innovation by acting as seedbeds in supporting their initiatives mostly in
the start-up phases. For example, the ITNAmerica would not have achieved its goals without
the federal monetary support. The Transit IDEA program sponsored by the Transport Research
Board benefited the public by providing feasibility study that enabled the foundation explore
senior citizens consumer behavior related to fee-based automobile transport services and
helped the foundation explore innovative payment plans and information system technology
(Wolk, 2004, p.189).
Social entrepreneurs often experience barriers addressing social problems, and the government
should in this case help by creating an enabling environment through removing barriers,
supporting collaboration and lending credibility. Existing laws and policy changes can act as
barrier for social innovation and the government should shift its focus from bureaucratic rules
and allow social cohesion and sustainable development. The government ca also show support
by rewarding performance. Howard Husock, the director of the Manhattan Institute Social
entrepreneurship Initiative points out in Wolk (2004) that “social entrepreneurs want access to
reliable sources of financing that recognize performance” (p.191).
Therefore the government can step up by supporting their initiatives through performance-
based rewards and by funding and purchasing their products and services. For example, the
RSVP’s initiative of reducing recidivism among criminal offenders, San Francisco city
managers continued funding RSVP line item long after grand funding ran out. Another example
is illustrated in Arkenstone Reading Machine that was purchased by U.S. Department of
Veterans Affair (VA) hospitals (Wolk, 2004, p.192).
Most societal innovations rely on published information provided by the government in helping
them find the target social problems and identify how many people are affected. Available
research data, funds evaluation that provide critical information documented by the
government helps in identifying problems and compare various interventions against standard
for success for those working towards solving social problems. Some of the initiatives that have
relied on government‘s data include KaBOOM and Benetech in understanding the nature of
the social problem.
For example, the federal funded ITNAmerica financed transport services that revealed the
safety concerns for older drivers that have become essential for citizens. Consensus data
provided by the government also helped social entrepreneurs predict the growing size of
American population that allowed program planning. Social entrepreneurs use government
reports to initiate projects, development and start up similar programs around the country. In
overall, government data is important in identifying social problems, setting standards and
gauging success (Wolk, 2004, p.196).
Conclusion
Research obtained from this essay argues that collaboration of any strategic plans in support of
the social entrepreneurship is particularly important to policy makers. Collaboration of
community members and the government in social entrepreneurship should therefore be
encouraged as it has seen to influence social entrepreneurship growth in the recent years.
Integration of business models and government initiative roles in utilizing market innovation
and productivity in responding to market failures, providing goods and services will decrease
administrative burdens, create transformative solutions and financial sustainable innovations
aimed at solving social problem.
The government on the other hand should shift its focus of bureaucratic rules and concentrate
on entrepreneurship innovations that provided a fertile ground for growth. In reducing New
York State’s deficit, the government should standardize contracts, make timely payments,
prioritize state funding and encourage financial support. Since social entrepreneurs facilitate
the community greater sense of partnership into the markets generated wealth, unlocking
opportunities that would have otherwise been ignored and includes community input into the
policy making process, public and private sectors partnership should always be encouraged in
order to develop solutions.
Organizations on the other hand should integrated financial and programmatic initiatives into
business activities to effectively capture organization problems and maximize their profits.
Incorporating new ideas from experts in the field of social entrepreneurship provides a fertile
ground for young and upcoming entrepreneurship growth by identifying present change in a
social economic environment. In evaluating the benefits of social entrepreneurs in our society,
it’s important for the government to award their efforts through sponsorship, purchase of their
products, prize awards and providing necessary research to facilitate their innovations.
Although there exist a variety of projects within the New Yolk state that seems to address
serious challenges faced by the society, local businessmen and social entrepreneurs are called
upon by the to mobilize their efforts in implementing solutions that will lower administrative
burdens and improve state’s accountability and lives of the local citizens. Since the process of
social entrepreneurship and its strategic goals for improving social welfare of the society
requires collaboration of different sectors across the economy, public, private and the
community enterprises should work in unity to help facilitate the initiation and maintenance of
innovative activities.
Social Entrepreneurs
Ashoka (2010) describes social entrepreneurs to be “people with ambitious and persistence
skills in tackling major social issues that offer new ideas for wide-scale change”(p.1). They
take proactive approaches in trying to change the system and provide solutions to societal
problems by mobilizing the entire society to take the leaps. Their initiatives focus on solving
the societal issues rather than leaving the issues to the government or business sectors. He also
defines them as mass recruiters with ethical skills and have the ability to mobilize people to
stand up for their ideas and implement them.
Social entrepreneurship use market-driven business model in addressing key environmental
issues and critical social needs. They take full responsibility of their project initiatives as they
don’t rely on government shifting focus. Ashoka (2010) also states that these kind of
entrepreneurs “ have the ability to grow to meet needs and priorities of the communities it
serves, as opposed to public sector limited to funds provided by the government” (p.1).
His definitions fits bigger concept of societal innovations as it broadly describes them as
entrepreneurs who provides solutions that are effective, efficient and sustainable to solve the
society social problems. The definitions are not limited to enterprise based approaches to
solving critical issues but also a social enterprise for social innovation. It should however be
noted that social enterprise is not about balancing the double standards of profit and social
impact but to obtain community sustainment projects (Ashoka, 2010).
Despite minimum support from the government and local volunteers, there seems to be general
agreement among the supporters of social entrepreneurship as to its key underlying goals and
their consequences for societal change. Social entrepreneurship innovative and interpretive
approach to societal problem has gained world wide recognition mainly from media houses
and policy makers, as a significant contributor to a country’s economy and to represent
distinctive part of the country’s social and economic activities.
These supporters deem to be building a perfect example of government and corporate bodies’
involvement in social activities. The United States government for example government
supports social entrepreneurs by allocating about $1 trillion every year to federal funds
dedicated to solving social issues. The monetary support may not be enough in the long run
since these organizations always desire for capital to develop their activities. Wolk (2004,
p.151) in his statement argues the government to form an alliance with social entrepreneurs to
generate transformative and cost-effective solutions to the most challenging social problems.
Incorporating new ideas from experts in the field of social entrepreneurship provides a fertile
ground for young and upcoming entrepreneurship growth by identifying present change in a
social economic environment. In evaluating the benefits of social entrepreneurs in our society,
it’s important to determine who social entrepreneurs are, how they benefit the government as
well as private and public businesses and what the government is doing to support them
(Simons, 2000, p.4).
The emergence of social entrepreneurs
Since the focus here is on the how social entrepreneurs has influenced the economy and
provided solutions to societal problems, three stages of responding to societal needs can be
identified. These stages, which correspond very closely with Roger and Osberg (2007, p.30)
include; a) market failures b) transformative innovations and; 3) financial sustainability. To
determine how social entrepreneur emerged as nexus from these factors, it’s important to
establish how it helped the government and improved the lives of public official constituents.
Although different aspects of social entrepreneur appear in all parts of the essay, case examples
illustrated throughout the paper help us understand how social entrepreneurship leverage public
and private resources, test and implement solutions to social by highlighting a number of
successful social entrepreneur initiatives (Wolk 2004, p156).
It was also realized that the triangulation of three sectors of the economy that consisted of the
government, private and public sectors acts as viable transport for innovation. However, there
appears to be a particular issue with regard to collaboration between social entrepreneurs and
the government. Their relationship has proven elusive and largely fruitless in resolving social
problems, transforming and implementing financially stable solutions. In order to enhance
functional relationship between these sectors, Martin and Osberg (2007, p.30) proposes for a
more rigorous approach of government involvement in social entrepreneurship that would later
boosted the economy (Martin& Osberg, 2007).
It’s quite unfortunate that the government has made little efforts in support of social-
entrepreneur initiatives. There has been growing consensus about government involvement in
social entrepreneurship initiatives with many speculating on their significant contribution.
Wolk (2004) mentions some of the strategies government has put in place in support of social
entrepreneur innovative and interpretive approach to include; 1) helping heighten their success
2) reward their performance 3) create supportive environment for innovation 4) encourage
them to innovate and; 5) offer knowledge through published reports and data to help them solve
problems (Wolk, 2004, p157).
History of Social entrepreneurship
According to Organization for Economic Co-Operation and Development (2006), quite a
majority of Americans live in poverty with about one quarter of the adults failing to complete
high school. The country’s health sector was also reported to have ranked 37 in the world’s
health review which was equivalent to status of a developing nation. These declines in both
economic and health sectors has increased the need for social entrepreneurship and its promises
as a means of addressing daunting social needs. Given the magnitude of needs the economy
has, the U.S government for this case is required to inject large sources of funds from federal
reserves, local government and the state to help solve these problems.
In attempting to fill this gap, Wolk (2004, p.155) proposes that the government should look
into the social entrepreneurship assistance for now ideas. He adds that the collaboration
between the two sectors will effectively identify societal needs and provide viable solutions to
the problems. His proposal throughout the essay attempts to define what social entrepreneur is
based on case studies and expert ideas and breaks the new ground in exploring new ways in
which government leaders as well as other constituents are benefiting from their efforts.
In today’s dynamic economy, there’s nothing as powerful as new ideas. Shoka (2010) quotes
more historical examples of social entrepreneurs to include “Susan B. Anthony (U.S.): Fought
for Women’s Rights in the United States, including the right to control property and helped
spearhead adoption of the 19th amendment” (p.1). He also mentions Vinaba Bhave founder of
the Land Gift Movement and the Italian social entrepreneur Dr. Maria Montessori founder of
Early Childhood Education among others (Ashoka, 2010).
In 2007, President George W. Bush acknowledged a variety of social entrepreneurs who have
helped the American society achieve a competitive age. Among the honored guests were Julie
Aigner-Clarke, founder of the Children Video Company and Baby Einstein producer of the
Child Safety Video. In his statement, president Bush (2007) acknowledged Julie’s efforts by
stating that
Julie represents the great enterprising spirit of America. And she is using her success to help
others….we are please to welcome this talented business entrepreneur and generous social
entrepreneur (p.1).
The president’s exploration of creative tasks delineateb by social entrepreneurs towards
community development applauded their efforts in responding to market failures, creating
transformative and financially sustainable innovations aimed at solving social problems.
Popular media has not been left behind on recognizing social entrepreneurs in our society. A
variety of media personalities for example have tried to redefined the term social
entrepreneurship to a greater household name. The Economists, Harvard Business Review, The
New York times among others have echoed this sentiment in an attempt to assess social
entrepreneurship achievements by publicizing their efforts.
According to Schumpeter (1982), markets exhibit a range of entrepreneur characteristics that
include innovative, risk-taking and large scale transformation. People deemed to possess these
characteristics were recognized in the 2006 U.S News and World Report to include Wendy
Kopp, founder of Teach For America, Michael Brown and Ali Khazei, founder of City Year
among others. Also included in the category were Grameen Bank, a Nobel Peace Winner,
Victoria Hale, founder of OneWorld Health Institute and Jim Fructerman from the MacArthur
Foundation (Wolk, 2004, 6).
Some historic examples of social innovators that changed the American social landscape are
also mentioned by Wolk (2004) to include Florence Nightingale of the 1800s foundation of the
modern field of nursing and Horace Mann, founder of public education. Wolk (2004) studies
argue that a social entrepreneur represent a distinctive part of a country’ social and economic
life and the United Stated for this case has gained tremendously. American entrepreneurship
can be traced within the context of changes that have taken place since 1980s.
The first entrepreneur recognized during that time was Edward Skloot who founded a non profit
consulting firm interested in creating business ventures. His work was published in Harvard
Business Review in 1983 as “nonprofit entrepreneurship” (Skloot, 1983, p.22) as a description
of business ventures that diversify nonprofit organization funding streams. Bill Drayton
founder of Ashoka came into play in 1981 as an Innovator for the Public to seek, support and
publicize public entrepreneurs. Pater Drucker of the management expert book was recognized
in 1985 among the first entrepreneurs to describe a phenomenon that extended into multiple
sectors (Battle& Dees, 2006, p.150).
Towards the mid 1990s social entrepreneurs began to gain new meaning as many scholars and
presses described them as anyone who started a nonprofit organization, or any business man
who integrated social responsibility into their operations. Here, social entrepreneurship is
described broadly to include a variety of organization structures and activities within the social
entrepreneurship context. Wolk (2004) argues here that social entrepreneurship stems from
initiatives that tend to exhibit the characteristics of innovations and risk taking.
He mentions various examples of social innovators throughout his research in illustrating how
entrepreneur initiatives act as seedbeds for development for non profit organizations, for profit
organizations and rather government programs. For this reason, it’s important to explain the
threes sectors in both social and economic perspective of an American economy by describe
their specific roles and responsibilities of in social entrepreneurship.. Below is an illustrated of
how social entrepreneurs have benefited the society within the context of public, private and
voluntary organizations and a description of trends that have eliminated the boundaries
between these sectors (Wolk, 2004, p.158).
Private Sector
Building capacity for societal change and fostering the social innovation requires full
participation of private and public sectors as well as voluntary organizations. A private sector
is defined by Wolk (2004) as “organization that incorporates activities of small business,
corporation and enterprises in utilizing market exchange for goods and services while
maximizing their profits” (p.158). Their strategies to foster development of social enterprises
and social entrepreneurship drive innovation and productivity into the economy.
Economists have long identified innovation as one of the major contributors to private sectors.
A former 1900s scholar Joseph Schumer once commended in Milton (1982) that “Further
contemporary economist Milton Friedman has argued that free markets, competition, and
consumer choices are also essential components of capitalism” (p.50). According to Wolk
(2004) reports, private sectors in the U.S economy represent approximately $13 trillion a year
in gross domestic product ranking the country top among the world’s largest economy.
This sector is also reported to be the major contributor to the country’s work force with 115
million employees currently working in private organizations. The public sector on the other
hand consists of about 87,900 government units with $4.3 trillion in earnings with 18 million
employees, while the non profit sectors contributes about $1.4 billion in revenue with 9.4
million employees and consists about 1.4 million organizations. The alliance between the three
sectors in carrying out social entrepreneurship has been credited to improve availability of jobs,
stimulate innovations and build wealth for the nation (Wolk, 2004, p.160).
Public Sectors
The public sector in support of social entrepreneurship is mentioned by Wolk (2004) to include
the following activities; 1) addressing inequalities in the markets by helping families living in
poverty by providing unemployment benefits and measurements for disaster assistance; 2)
providing public facilities such as policing, public defense, education and libraries to the most
needy in the society. In relation to market failure perspective, it seems complicated to define
the relationship between public sectors and social entrepreneurship as the services provided are
more than what the public is willing to pay for.
Social entrepreneurship distinctly addresses market failures since they are not profit oriented
and address the un-met public needs. The government role in re-distributing services to address
market failures is another way of contributing to social entrepreneurship. Its support of private
sectors in providing goods for the public helps address market inequalities and foster
environment for initiative development. Although a lot has been done to support these
initiatives, the government continues to face pressure in allocating resources to meet all the
societal needs (Wolk, 2004, p.161).
Non Profit Sectors
Non profit sectors have been traditionally known to engage in a variety of activities that support
social goals. Perfect examples of such organizations include private hospitals and schools,
religious organizations, and social service providers. Nonprofit sectors efforts in support social
activities are recognized when both private and public sectors have failed to meet particular
social needs and since they can not distribute the profits to their leaders, these sectors are placed
at a better position to use their revenues to sustain growth and grow their organizations.
Although they are by far the smallest sectors, nonprofit organization are known to be the fastest
growing organizations. In 1994 for example, the nonprofit organization were reported to have
doubled in number with almost 65 % growth rate which added up to 10.5% of the country’s
work force (Wolk, 2004, p.161).
Nicholls (2006) a scholar from Oxford university defines social entrepreneur to include both
multi-dimensional and dynamic construct of the economy rather than their organizational form.
All the three sectors play distinctive roles in resolving societal needs by ensuring public needs
are met. However, several trends have continued to emerge within the social entrepreneurship
spectrum bridging the gap between these sectors hence creating conducive environment for
social entrepreneurs to emerge and grow.
In private sectors for example, businesses and employees are increasingly engaging in activities
previously regarded as non-profitable as many have started engaging in educational and social
projects providing companies’ opportunity to offer services that could not have been considered
in the first place or regarded as government activities (Light, 2003). Osborne and Gaebler
(1993) journal reports states that, between 1999 and 2002, the U.S government reported to have
awarded about 700,000 contracts in federal funds to private enterprises and the public sectors
seem to have also shifted their focus from maximizing profits to engaging in social activities.
According to Goldsmith and Eggers (2004), the government engages in social enterprises by
offering opportunities to public enterprises to privatize their firms which call for business ethics
in turn promoting more competitive business environment. Private sectors have also increased
demand for efficiency and accountability and bridged the gaps in public sector delivery and
created public sector responsibility.
Goldsmith and his colleague also argue that social entrepreneurs have increased efficiency in
government funds as they only inject resources to market demands and increased preference
on issues ranging from public utilities to public schools. Government’s strategy of
monopolizing public sectors and reliance on private sectors in managing contracts and
allocating funds has greatly increased social responsibility and helped fill the gap in public
service delivery by ensuring the best services are provided (Goldsmith and Eggers, 2004).
Response to Market failures
As already discussed, social entrepreneurs characterized by their ethical skills are able to
identify to market failures and commit their resources to affect to the neediest in the society.
Because private sectors or even the government are unable to generate enough profits to
respond to these problems, these sectors bridge the gap by finding market opportunities and
maximizing their potential. Under normal circumstances, the government would try to address
the unmet needs by deploying public funds into the sectors, which has already been proven
futile in the long run. Social entrepreneurs in this case present viable options for addressing
market failures by seeking opportunities to create value rather than economical benefit.
Gregory Dees, founder of social entrepreneur argues that market approach to market
evaluations on social improvement do not adequately identify harms for people who cannot
afford to pay for the service and social entrepreneurs presence would distinctly cater for the
economy’s needs (Battle&Dees, 2006, p.160).
Social entrepreneurs insight exploration of societal problems have the ability to provide
transformational benefit that targets education and employment activities as well as the
marginalized areas that would have never been considered by the government. Wolk (2004)
categorizes market approaches into three broad perspectives that include; “no market approach,
limited market and low-profit market approach in targeting beneficiaries and responding to
market failures” (p.168).
He identifies no market approach as a social entrepreneurship strategy that offers products and
services to its potential beneficiaries without requesting for any payments. So this could mean
that the organization depends entirely on its own funding to sustain the initiatives. Limited
market approach on the other hand required beneficiaries to pay partial of the costs so sustain
the project activities, a common trend exhibited in non-profit organizations. He explains low-
profit market approach to require full payment of goods and services obtained as illustrated in
most private organizations that have the potential of generating profits (Wolk, 2004, p.168).
Transformative Innovations
Social entrepreneurs are described by many scholars as change agents, creating systematic
change by introducing new ideas and persuading others to adopt, changing social patterns that
create social problems through breaking patterns. In transformative perspective, Bill Drayton
defines social entrepreneurs as creative thinkers continuously striving for innovations.
Transformative ideas can be seen through the invention of new technologies, methods of
production, supply sources and distribution outlets and social entrepreneurs have for this case
taken these innovative approaches further by devising strategies that have benefited the whole
society (Ashoka, 2010). Social entrepreneur have been evidenced to combine their own
innovative skills, research obtained from public sources and political influence in attaining
their goals. Their ability to involve major players in the entrepreneurship activities character
sets them apart from the traditional profit oriented organizations (Wolk, 2004, p.20).
Financial Sustainability
Market analysts urge private organizations and business to should try and find a model that
responds to their unique characters of their social problem. Wolk (2004) statements stressed
organization to obtain their own financial sustainability that will cushion them through the hard
economic times and engage in social reality projects that prefer productivity and efficient
management of their resources. He argues that businesses that adopt this approach often report
good report results on organizational performance and cost benefit returns on investment.
These organizations are also required to integrated financial and programmatic initiatives into
business activities to effectively capture organization problems and maximize their profits
(Wolk, 2004, p.170).
Non-financial Resources
Non-financial resources also known as volunteers are social entrepreneurs deemed to posses
both skilled and unskilled education and may at one time rely on donations to increase the
sustainability of their initiatives. These volunteers engage in public activities that develop and
implement social solutions like the Hurricane Katrina volunteers that came out in large
numbers to complete intensely needed work in a way the government could have never afforded
by themselves (Wolk, 2004, p.171).
Social entrepreneurs in New York State
Social enterprise is a new breed of entrepreneurship that exhibits the characteristics of
innovation, risk taking and large-scale transformation. They have provided a fertile ground for
young and upcoming entrepreneurship growth by identifying present change in social
economic environment. On New York perspective, the practice of responding to market failures
with transformative, financially sustainable innovations aimed at solving societal issues is
advancing at pace that exceeds comfort zone causing the government to suffer substantial
losses in funding charitable organizations. Although there exist a variety of projects within the
New Yolk state that seems to address serious challenges faced by the society, local businessmen
and social entrepreneurs are called upon by the State’s comptroller to mobilize their efforts in
implementing solutions that will lower administrative burdens and improve state’s
accountability and oversight (Dinapoli, 2010, p.1).
Some of the State’s initiatives that include youth programs, education services and arts council
are currently being threatened by the economic downturn and social entrepreneurs are for this
case trusted to have the potential for transform the social innovations. Dinapoli (2010) gives
us a perfect example of a successful community-based initiatives that have helped stimulate
the economy by illustrating the 2006 human service organizations social entrepreneurship
initiative that reported revenues of $132.9 billion in over 24,000 NFPs and provided nearly 1.2
million jobs which contributes to about 17% of the States work force. While in June 2009, the
State was reported to have had 31,000 contractors with NFPs totaling to $14.6 billion (Dinapoli,
2010, p.1).
New York State has also been facing serious issues in regard to increased demand for goods
and services resulting to increase pressure on the State’s budget. For example, between 2008
and 2009, the State’s unemployment rates increased from 5.8% to 8.9% simultaneously and
rose from 6.0 % in 2008 to10.3% in 2009 in the New York City. The overwhelming numbers
of dependable people increased the number of people receiving food stamps by 17.5% between
January and October the same year. The State continues to struggle with program funding as
more households continue to seek assistance of all types.
Dinapoli (2010) mentions other States deficit that might have increased pressure on demand
for goods and services to include; the Home Energy Assistance Program (HEAP) increased
deficit of 36.3 percent between 2008 and 2009, the State’s budget deficit of $4.1billion for the
fiscal year 2009-2010, and the projected deficit of more than $23 billion expected to hit through
SFY between 2011 to 2011. Charitable activities have also reduced their contributions to social
activities and private corporations and philanthropic organizations no longer provide
significant funds to finance societal services (Dinapoli, 2010, p.2).
Contracts Delays and Late Payments
Quite a number of not for profit (NFPs) organizations receive funding from the State through
contract allocations. According to the Office of the State Comptroller (OSC) of New York State,
about 87% of state contracts in 2009 were reported to have been delayed as a result of the
economic downturn. These delays forced NFPs to perform activities without any payments
hence resulting to increased borrowing to finance their projects. Dinapoli (2010) reports
indicated that about 69% of NFPs resorted to borrowing due the delayed government contracts
and payments. This gap can be bridged by businesses involvement in community initiatives
that require social enterprise participation (Dinapoli, 2010, p.4).
Social entrepreneurs have been identified to present change in social economic environment
by engaging businesses in their activities. Social entrepreneurs for this case involve players
such as volunteers and not for profit organizations in meeting social needs. Some of the inherent
benefits of including community activities in social entrepreneurship include full utilization of
human resources, increased diversity which reduces intercultural conflicts among community
members, enhances work relationship based on mutual respect and increased knowledge of
multicultural issues. It is also argued that community involvement Increases commitment
among diverse cultures and across all functions, increases community participation in key-
decision making and problem solving and improves productivity and reduces energy spend in
solving cultural clashes (Chase, 2000, p. 12; Simons, 2000, p.4).).
It’s important for users, service providers, the community and the government to stay ahead of
the societal challenges. Policy makers in this case require the public to take active roles in
providing innovative ideas to handle these changes. Chase (2000) requires the integration
between society and the economy in evaluating societal needs and the attainment of certain
social and economic goals. Chase (2000) definitions of social entrepreneurship are not aimed
at describing functions of social entrepreneurs but rather as effective instruments for combating
social problems and vehicle for social cohesion.
He defines social entrepreneurs as nonprofit agencies that maximize their mission-related
performance through development of new ventures or by reorganizing existing activities to
improve operational effectiveness. For profit companies that are involved in social activities
can also be referred as social enterprises embedded in social purpose. Non profit can be linked
to a wide range of foundations, associated organizations and organizations that operate outside
the parameters of common markets (Chase, 2000, p.12).
Although little research has been done on nonprofit organization from social entrepreneurship
perspective, Wolk (2004) recognizes them as powerful tools that have revitalized otherwise
deprived areas, communities and localities and produced services that are not being produced
by mainstream commercial enterprises. Ashoka foundation illustrates a perfect example of
social entrepreneurs that have become leaders in social change by providing sources through
inter-sectoral resources without limiting themselves to traditional charitable models.
Social entrepreneurs and nonprofit organization seem to be categorized in the same model of
community service as they both possess common themes in addressing complex social needs
in effective and integrated ways and regenerating communities’ needs. Another common
characteristics exhibited in these two organizations includes their ability to recognize the
society’s need for an incubation period, allows new ventures to mature, undergo rigorous
ongoing assessment to maximize outcomes and identify needs, support and develop them
(Simons, 2000, p.4).
To understand how social entrepreneurs contribute to the society. Three factors keep
reoccurring throughout the essay. First, social entrepreneurs have a capacity to be a leader in
the social field change which is achieved by their ability to break social reforms and design
innovative programs. Second, their rigorous approach in maximizing societal changes and
outcomes. And third, their ability to take outstanding or emerging social problems. The ability
to collaborate, challenge and support community initiatives in reference to the community,
business and government activities achieves them higher in the society (Simons, 2000, p.4).
Challenges often faced by social enterprise are their inability to collaborate all the three sectors
into long-term and strategic objectives of innovation, research and capacity building. All the
three sectors are required to harness capacities of all sectors in order to realize sustainable
societal change. For instance, development in social activities requires collaboration of both
research and development funds. Their aim is to provide resources that can be adopted into
different communities and service providers that will adapt rapidly to changing political, social
and funding environment. Research is also needed as means of investment in promoting good
practice and development of good policy (Simons, 2000, p.4).
Nonprofit organizations and social enterprises continue to seek solutions to social problems by
providing easy to interpret results. Their initiatives translate changing latent needs into explicit
demands, provide innovative goods and services by developing or running the local or
interregional networks, integrating human and financial services for mutual benefit. Just as
traditional enterprises are critical to such areas such as industry and technology, social
entrepreneurs are as well critical to areas of human needs such as health, environment, young
people, and revitalizing communities.
They transform the community by generating initiative approaches to needy private and public
sectors as well as nonprofit sectors (Wolk, 2004). Until corporations are willing to be
strategically involved in funding, designing and implementing community based programs,
corporate donations will still be necessary. Corporate should also work with volunteers in
implement positive and productive community initiatives. Although research in this essay keep
shifting from charitable activities to social entrepreneurship, its important to note that social
entrepreneurs still serve as seedbeds for innovations (Simons, 2000, p.1).
Adaptation of social entrepreneur initiatives into the community has however not been without
challenges. Providing leadership in a dynamic community often receives resistance in
adaptation and the sufferers are always the needy society members. Cooperation between
economic and social players, including government funding welfare programs should be
encouraged since they are the main reason for the growth of social enterprise.
Social entrepreneur have the ability to enhance their research capacity by strategizing in
research alliances and partnering with communities and government to ensure accurate
identification of problems and appropriate provision of resources. One best activity obtained
from social entrepreneurs should be combined community development and business skills to
ensure continued developments. The type of interventions emerging from social enterprise
model should focus on measures of community social capacity rather than concentrating on
profit motives (Simons, 2000, p.3).
Government Support for Social Entrepreneurs
Social entrepreneurs help in testing and developing promising solutions and compliment
governments role in addressing market failures that benefit the citizens. Billy shore founder of
Share Our Strength pointed out that social entrepreneurs create a pipeline for the government,
they take more risks and do things the government cannot do since they are closer to people.
Social entrepreneurship have added value to the community research and addressed major
micro-dimensions in the society that could otherwise have been ignored.
Their approach has also helped the government recognize the compatibility of their approach
in informing and influencing social policy according to emerging models hence improving
relationship between themselves and non-governmental organizations. Social entrepreneurs are
hoped for benefits, develop skills in anticipation and responding to those most at risk, and
enhance the ability to broker evidence based policy development.
They develop close to the grassroots, they interpret and anticipate the needs of most vulnerable
groups and further their integration into social and professional life. They can be hotbeds for
ideas and experiments. After they identify new and emerging demands, they present their ideas
to the public sector decision makers through their partnership with them. Their ethical approach
to new ideas adds extra value to production of goods and services to the society and decrease
administrative burdens (Wolk, 2004, p.188).
Building capacity for societal change and fostering the social innovation requires deliberate
strategies to foster the development of social enterprise and social entrepreneurs who drive
them. Having collected qualitative data from the government, social entrepreneurs are in a
better position to become brokers of evidence based policy development. They have a wealth
of knowledge and wisdom based on experience with the disadvantaged that can facilitate the
adoption of innovative policies at the central, regional and local governments. They facilitate
the community greater sense of partnership into the markets generated wealth, unlocking
opportunities and encourage community participation into policy making process (Wolk, 2004,
p.188).
Successful implementation of social entrepreneurship skills relies upon the active participation
of the three sectors which includes the government, business and community focused activities.
Social entrepreneurs for this case are required to remain alert to any for strategic alliance with
other segments of society that would help realize their dreams. Their main objective of the
strategic alliances is to facilitate the initiation and maintenance of relations across sectors and
help realize key outcomes, combating social exclusion, promotion of social cohesion and
unlocking opportunities for constructive participation.
They also act as outcomes measurements and provide reference points for the development of
benchmarks to assess ongoing and planned activities. Responding to the disadvantaged
simultaneously requires working for societal change for effective and sustainable outcomes. It
considers taking what is considered risky to provide joint leadership in working with others for
more a cohesive society (Wolk, 2004, p.189).
Social entrepreneurs are best known to leverage both public and private sectors, and test and
develop solutions. As evident from research gathered around the globe, the United States
government lacks strategic measures to help address the country’s social problems. The
government however has over the years tried supporting social entrepreneurs through creating
enabling environment for social entrepreneurial initiatives, rewarding initiatives for
performing, encouraging social innovation, scaling initiative success and producing knowledge
that enhances social entrepreneur efforts (Wolk, 2004, p.189).
Launching new initiatives in the markets may be a challenging task for social entrepreneurs.
To help them endure trials of the start up phase, many foundations such as Echoing Green and
Ashoka have been set up to provide support for early organizational development. Various
academic programs that sponsor competition and awards have also stepped up to encourage
social innovation and foundation of new initiatives.
The government should in this case follow this approach by taking proactive roles in
encouraging social innovation by acting as seedbeds in supporting their initiatives mostly in
the start-up phases. For example, the ITNAmerica would not have achieved its goals without
the federal monetary support. The Transit IDEA program sponsored by the Transport Research
Board benefited the public by providing feasibility study that enabled the foundation explore
senior citizens consumer behavior related to fee-based automobile transport services and
helped the foundation explore innovative payment plans and information system technology
(Wolk, 2004, p.189).
Social entrepreneurs often experience barriers addressing social problems, and the government
should in this case help by creating an enabling environment through removing barriers,
supporting collaboration and lending credibility. Existing laws and policy changes can act as
barrier for social innovation and the government should shift its focus from bureaucratic rules
and allow social cohesion and sustainable development. The government ca also show support
by rewarding performance. Howard Husock, the director of the Manhattan Institute Social
entrepreneurship Initiative points out in Wolk (2004) that “social entrepreneurs want access to
reliable sources of financing that recognize performance” (p.191).
Therefore the government can step up by supporting their initiatives through performance-
based rewards and by funding and purchasing their products and services. For example, the
RSVP’s initiative of reducing recidivism among criminal offenders, San Francisco city
managers continued funding RSVP line item long after grand funding ran out. Another example
is illustrated in Arkenstone Reading Machine that was purchased by U.S. Department of
Veterans Affair (VA) hospitals (Wolk, 2004, p.192).
Most societal innovations rely on published information provided by the government in helping
them find the target social problems and identify how many people are affected. Available
research data, funds evaluation that provide critical information documented by the
government helps in identifying problems and compare various interventions against standard
for success for those working towards solving social problems. Some of the initiatives that have
relied on government‘s data include KaBOOM and Benetech in understanding the nature of
the social problem.
For example, the federal funded ITNAmerica financed transport services that revealed the
safety concerns for older drivers that have become essential for citizens. Consensus data
provided by the government also helped social entrepreneurs predict the growing size of
American population that allowed program planning. Social entrepreneurs use government
reports to initiate projects, development and start up similar programs around the country. In
overall, government data is important in identifying social problems, setting standards and
gauging success (Wolk, 2004, p.196).
Conclusion
Research obtained from this essay argues that collaboration of any strategic plans in support of
the social entrepreneurship is particularly important to policy makers. Collaboration of
community members and the government in social entrepreneurship should therefore be
encouraged as it has seen to influence social entrepreneurship growth in the recent years.
Integration of business models and government initiative roles in utilizing market innovation
and productivity in responding to market failures, providing goods and services will decrease
administrative burdens, create transformative solutions and financial sustainable innovations
aimed at solving social problem.
The government on the other hand should shift its focus of bureaucratic rules and concentrate
on entrepreneurship innovations that provided a fertile ground for growth. In reducing New
York State’s deficit, the government should standardize contracts, make timely payments,
prioritize state funding and encourage financial support. Since social entrepreneurs facilitate
the community greater sense of partnership into the markets generated wealth, unlocking
opportunities that would have otherwise been ignored and includes community input into the
policy making process, public and private sectors partnership should always be encouraged in
order to develop solutions.
Organizations on the other hand should integrated financial and programmatic initiatives into
business activities to effectively capture organization problems and maximize their profits.
Incorporating new ideas from experts in the field of social entrepreneurship provides a fertile
ground for young and upcoming entrepreneurship growth by identifying present change in a
social economic environment. In evaluating the benefits of social entrepreneurs in our society,
it’s important for the government to award their efforts through sponsorship, purchase of their
products, prize awards and providing necessary research to facilitate their innovations.
Although there exist a variety of projects within the New Yolk state that seems to address
serious challenges faced by the society, local businessmen and social entrepreneurs are called
upon by the to mobilize their efforts in implementing solutions that will lower administrative
burdens and improve state’s accountability and lives of the local citizens. Since the process of
social entrepreneurship and its strategic goals for improving social welfare of the society
requires collaboration of different sectors across the economy, public, private and the
community enterprises should work in unity to help facilitate the initiation and maintenance of
innovative activities.
Social Entrepreneurs
Ashoka (2010) describes social entrepreneurs to be “people with ambitious and persistence
skills in tackling major social issues that offer new ideas for wide-scale change”(p.1). They
take proactive approaches in trying to change the system and provide solutions to societal
problems by mobilizing the entire society to take the leaps. Their initiatives focus on solving
the societal issues rather than leaving the issues to the government or business sectors. He also
defines them as mass recruiters with ethical skills and have the ability to mobilize people to
stand up for their ideas and implement them.
Social entrepreneurship use market-driven business model in addressing key environmental
issues and critical social needs. They take full responsibility of their project initiatives as they
don’t rely on government shifting focus. Ashoka (2010) also states that these kind of
entrepreneurs “ have the ability to grow to meet needs and priorities of the communities it
serves, as opposed to public sector limited to funds provided by the government” (p.1).
His definitions fits bigger concept of societal innovations as it broadly describes them as
entrepreneurs who provides solutions that are effective, efficient and sustainable to solve the
society social problems. The definitions are not limited to enterprise based approaches to
solving critical issues but also a social enterprise for social innovation. It should however be
noted that social enterprise is not about balancing the double standards of profit and social
impact but to obtain community sustainment projects (Ashoka, 2010).
Despite minimum support from the government and local volunteers, there seems to be general
agreement among the supporters of social entrepreneurship as to its key underlying goals and
their consequences for societal change. Social entrepreneurship innovative and interpretive
approach to societal problem has gained world wide recognition mainly from media houses
and policy makers, as a significant contributor to a country’s economy and to represent
distinctive part of the country’s social and economic activities.
These supporters deem to be building a perfect example of government and corporate bodies’
involvement in social activities. The United States government for example government
supports social entrepreneurs by allocating about $1 trillion every year to federal funds
dedicated to solving social issues. The monetary support may not be enough in the long run
since these organizations always desire for capital to develop their activities. Wolk (2004,
p.151) in his statement argues the government to form an alliance with social entrepreneurs to
generate transformative and cost-effective solutions to the most challenging social problems.
Incorporating new ideas from experts in the field of social entrepreneurship provides a fertile
ground for young and upcoming entrepreneurship growth by identifying present change in a
social economic environment. In evaluating the benefits of social entrepreneurs in our society,
it’s important to determine who social entrepreneurs are, how they benefit the government as
well as private and public businesses and what the government is doing to support them
(Simons, 2000, p.4).
The emergence of social entrepreneurs
Since the focus here is on the how social entrepreneurs has influenced the economy and
provided solutions to societal problems, three stages of responding to societal needs can be
identified. These stages, which correspond very closely with Roger and Osberg (2007, p.30)
include; a) market failures b) transformative innovations and; 3) financial sustainability. To
determine how social entrepreneur emerged as nexus from these factors, it’s important to
establish how it helped the government and improved the lives of public official constituents.
Although different aspects of social entrepreneur appear in all parts of the essay, case examples
illustrated throughout the paper help us understand how social entrepreneurship leverage public
and private resources, test and implement solutions to social by highlighting a number of
successful social entrepreneur initiatives (Wolk 2004, p156).
It was also realized that the triangulation of three sectors of the economy that consisted of the
government, private and public sectors acts as viable transport for innovation. However, there
appears to be a particular issue with regard to collaboration between social entrepreneurs and
the government. Their relationship has proven elusive and largely fruitless in resolving social
problems, transforming and implementing financially stable solutions. In order to enhance
functional relationship between these sectors, Martin and Osberg (2007, p.30) proposes for a
more rigorous approach of government involvement in social entrepreneurship that would later
boosted the economy (Martin& Osberg, 2007).
It’s quite unfortunate that the government has made little efforts in support of social-
entrepreneur initiatives. There has been growing consensus about government involvement in
social entrepreneurship initiatives with many speculating on their significant contribution.
Wolk (2004) mentions some of the strategies government has put in place in support of social
entrepreneur innovative and interpretive approach to include; 1) helping heighten their success
2) reward their performance 3) create supportive environment for innovation 4) encourage
them to innovate and; 5) offer knowledge through published reports and data to help them solve
problems (Wolk, 2004, p157).
History of Social entrepreneurship
According to Organization for Economic Co-Operation and Development (2006), quite a
majority of Americans live in poverty with about one quarter of the adults failing to complete
high school. The country’s health sector was also reported to have ranked 37 in the world’s
health review which was equivalent to status of a developing nation. These declines in both
economic and health sectors has increased the need for social entrepreneurship and its promises
as a means of addressing daunting social needs. Given the magnitude of needs the economy
has, the U.S government for this case is required to inject large sources of funds from federal
reserves, local government and the state to help solve these problems.
In attempting to fill this gap, Wolk (2004, p.155) proposes that the government should look
into the social entrepreneurship assistance for now ideas. He adds that the collaboration
between the two sectors will effectively identify societal needs and provide viable solutions to
the problems. His proposal throughout the essay attempts to define what social entrepreneur is
based on case studies and expert ideas and breaks the new ground in exploring new ways in
which government leaders as well as other constituents are benefiting from their efforts.
In today’s dynamic economy, there’s nothing as powerful as new ideas. Shoka (2010) quotes
more historical examples of social entrepreneurs to include “Susan B. Anthony (U.S.): Fought
for Women’s Rights in the United States, including the right to control property and helped
spearhead adoption of the 19th amendment” (p.1). He also mentions Vinaba Bhave founder of
the Land Gift Movement and the Italian social entrepreneur Dr. Maria Montessori founder of
Early Childhood Education among others (Ashoka, 2010).
In 2007, President George W. Bush acknowledged a variety of social entrepreneurs who have
helped the American society achieve a competitive age. Among the honored guests were Julie
Aigner-Clarke, founder of the Children Video Company and Baby Einstein producer of the
Child Safety Video. In his statement, president Bush (2007) acknowledged Julie’s efforts by
stating that
Julie represents the great enterprising spirit of America. And she is using her success to help
others….we are please to welcome this talented business entrepreneur and generous social
entrepreneur (p.1).
The president’s exploration of creative tasks delineateb by social entrepreneurs towards
community development applauded their efforts in responding to market failures, creating
transformative and financially sustainable innovations aimed at solving social problems.
Popular media has not been left behind on recognizing social entrepreneurs in our society. A
variety of media personalities for example have tried to redefined the term social
entrepreneurship to a greater household name. The Economists, Harvard Business Review, The
New York times among others have echoed this sentiment in an attempt to assess social
entrepreneurship achievements by publicizing their efforts.
According to Schumpeter (1982), markets exhibit a range of entrepreneur characteristics that
include innovative, risk-taking and large scale transformation. People deemed to possess these
characteristics were recognized in the 2006 U.S News and World Report to include Wendy
Kopp, founder of Teach For America, Michael Brown and Ali Khazei, founder of City Year
among others. Also included in the category were Grameen Bank, a Nobel Peace Winner,
Victoria Hale, founder of OneWorld Health Institute and Jim Fructerman from the MacArthur
Foundation (Wolk, 2004, 6).
Some historic examples of social innovators that changed the American social landscape are
also mentioned by Wolk (2004) to include Florence Nightingale of the 1800s foundation of the
modern field of nursing and Horace Mann, founder of public education. Wolk (2004) studies
argue that a social entrepreneur represent a distinctive part of a country’ social and economic
life and the United Stated for this case has gained tremendously. American entrepreneurship
can be traced within the context of changes that have taken place since 1980s.
The first entrepreneur recognized during that time was Edward Skloot who founded a non profit
consulting firm interested in creating business ventures. His work was published in Harvard
Business Review in 1983 as “nonprofit entrepreneurship” (Skloot, 1983, p.22) as a description
of business ventures that diversify nonprofit organization funding streams. Bill Drayton
founder of Ashoka came into play in 1981 as an Innovator for the Public to seek, support and
publicize public entrepreneurs. Pater Drucker of the management expert book was recognized
in 1985 among the first entrepreneurs to describe a phenomenon that extended into multiple
sectors (Battle& Dees, 2006, p.150).
Towards the mid 1990s social entrepreneurs began to gain new meaning as many scholars and
presses described them as anyone who started a nonprofit organization, or any business man
who integrated social responsibility into their operations. Here, social entrepreneurship is
described broadly to include a variety of organization structures and activities within the social
entrepreneurship context. Wolk (2004) argues here that social entrepreneurship stems from
initiatives that tend to exhibit the characteristics of innovations and risk taking.
He mentions various examples of social innovators throughout his research in illustrating how
entrepreneur initiatives act as seedbeds for development for non profit organizations, for profit
organizations and rather government programs. For this reason, it’s important to explain the
threes sectors in both social and economic perspective of an American economy by describe
their specific roles and responsibilities of in social entrepreneurship.. Below is an illustrated of
how social entrepreneurs have benefited the society within the context of public, private and
voluntary organizations and a description of trends that have eliminated the boundaries
between these sectors (Wolk, 2004, p.158).
Private Sector
Building capacity for societal change and fostering the social innovation requires full
participation of private and public sectors as well as voluntary organizations. A private sector
is defined by Wolk (2004) as “organization that incorporates activities of small business,
corporation and enterprises in utilizing market exchange for goods and services while
maximizing their profits” (p.158). Their strategies to foster development of social enterprises
and social entrepreneurship drive innovation and productivity into the economy.
Economists have long identified innovation as one of the major contributors to private sectors.
A former 1900s scholar Joseph Schumer once commended in Milton (1982) that “Further
contemporary economist Milton Friedman has argued that free markets, competition, and
consumer choices are also essential components of capitalism” (p.50). According to Wolk
(2004) reports, private sectors in the U.S economy represent approximately $13 trillion a year
in gross domestic product ranking the country top among the world’s largest economy.
This sector is also reported to be the major contributor to the country’s work force with 115
million employees currently working in private organizations. The public sector on the other
hand consists of about 87,900 government units with $4.3 trillion in earnings with 18 million
employees, while the non profit sectors contributes about $1.4 billion in revenue with 9.4
million employees and consists about 1.4 million organizations. The alliance between the three
sectors in carrying out social entrepreneurship has been credited to improve availability of jobs,
stimulate innovations and build wealth for the nation (Wolk, 2004, p.160).
Public Sectors
The public sector in support of social entrepreneurship is mentioned by Wolk (2004) to include
the following activities; 1) addressing inequalities in the markets by helping families living in
poverty by providing unemployment benefits and measurements for disaster assistance; 2)
providing public facilities such as policing, public defense, education and libraries to the most
needy in the society. In relation to market failure perspective, it seems complicated to define
the relationship between public sectors and social entrepreneurship as the services provided are
more than what the public is willing to pay for.
Social entrepreneurship distinctly addresses market failures since they are not profit oriented
and address the un-met public needs. The government role in re-distributing services to address
market failures is another way of contributing to social entrepreneurship. Its support of private
sectors in providing goods for the public helps address market inequalities and foster
environment for initiative development. Although a lot has been done to support these
initiatives, the government continues to face pressure in allocating resources to meet all the
societal needs (Wolk, 2004, p.161).
Non Profit Sectors
Non profit sectors have been traditionally known to engage in a variety of activities that support
social goals. Perfect examples of such organizations include private hospitals and schools,
religious organizations, and social service providers. Nonprofit sectors efforts in support social
activities are recognized when both private and public sectors have failed to meet particular
social needs and since they can not distribute the profits to their leaders, these sectors are placed
at a better position to use their revenues to sustain growth and grow their organizations.
Although they are by far the smallest sectors, nonprofit organization are known to be the fastest
growing organizations. In 1994 for example, the nonprofit organization were reported to have
doubled in number with almost 65 % growth rate which added up to 10.5% of the country’s
work force (Wolk, 2004, p.161).
Nicholls (2006) a scholar from Oxford university defines social entrepreneur to include both
multi-dimensional and dynamic construct of the economy rather than their organizational form.
All the three sectors play distinctive roles in resolving societal needs by ensuring public needs
are met. However, several trends have continued to emerge within the social entrepreneurship
spectrum bridging the gap between these sectors hence creating conducive environment for
social entrepreneurs to emerge and grow.
In private sectors for example, businesses and employees are increasingly engaging in activities
previously regarded as non-profitable as many have started engaging in educational and social
projects providing companies’ opportunity to offer services that could not have been considered
in the first place or regarded as government activities (Light, 2003). Osborne and Gaebler
(1993) journal reports states that, between 1999 and 2002, the U.S government reported to have
awarded about 700,000 contracts in federal funds to private enterprises and the public sectors
seem to have also shifted their focus from maximizing profits to engaging in social activities.
According to Goldsmith and Eggers (2004), the government engages in social enterprises by
offering opportunities to public enterprises to privatize their firms which call for business ethics
in turn promoting more competitive business environment. Private sectors have also increased
demand for efficiency and accountability and bridged the gaps in public sector delivery and
created public sector responsibility.
Goldsmith and his colleague also argue that social entrepreneurs have increased efficiency in
government funds as they only inject resources to market demands and increased preference
on issues ranging from public utilities to public schools. Government’s strategy of
monopolizing public sectors and reliance on private sectors in managing contracts and
allocating funds has greatly increased social responsibility and helped fill the gap in public
service delivery by ensuring the best services are provided (Goldsmith and Eggers, 2004).
Response to Market failures
As already discussed, social entrepreneurs characterized by their ethical skills are able to
identify to market failures and commit their resources to affect to the neediest in the society.
Because private sectors or even the government are unable to generate enough profits to
respond to these problems, these sectors bridge the gap by finding market opportunities and
maximizing their potential. Under normal circumstances, the government would try to address
the unmet needs by deploying public funds into the sectors, which has already been proven
futile in the long run. Social entrepreneurs in this case present viable options for addressing
market failures by seeking opportunities to create value rather than economical benefit.
Gregory Dees, founder of social entrepreneur argues that market approach to market
evaluations on social improvement do not adequately identify harms for people who cannot
afford to pay for the service and social entrepreneurs presence would distinctly cater for the
economy’s needs (Battle&Dees, 2006, p.160).
Social entrepreneurs insight exploration of societal problems have the ability to provide
transformational benefit that targets education and employment activities as well as the
marginalized areas that would have never been considered by the government. Wolk (2004)
categorizes market approaches into three broad perspectives that include; “no market approach,
limited market and low-profit market approach in targeting beneficiaries and responding to
market failures” (p.168).
He identifies no market approach as a social entrepreneurship strategy that offers products and
services to its potential beneficiaries without requesting for any payments. So this could mean
that the organization depends entirely on its own funding to sustain the initiatives. Limited
market approach on the other hand required beneficiaries to pay partial of the costs so sustain
the project activities, a common trend exhibited in non-profit organizations. He explains low-
profit market approach to require full payment of goods and services obtained as illustrated in
most private organizations that have the potential of generating profits (Wolk, 2004, p.168).
Transformative Innovations
Social entrepreneurs are described by many scholars as change agents, creating systematic
change by introducing new ideas and persuading others to adopt, changing social patterns that
create social problems through breaking patterns. In transformative perspective, Bill Drayton
defines social entrepreneurs as creative thinkers continuously striving for innovations.
Transformative ideas can be seen through the invention of new technologies, methods of
production, supply sources and distribution outlets and social entrepreneurs have for this case
taken these innovative approaches further by devising strategies that have benefited the whole
society (Ashoka, 2010). Social entrepreneur have been evidenced to combine their own
innovative skills, research obtained from public sources and political influence in attaining
their goals. Their ability to involve major players in the entrepreneurship activities character
sets them apart from the traditional profit oriented organizations (Wolk, 2004, p.20).
Financial Sustainability
Market analysts urge private organizations and business to should try and find a model that
responds to their unique characters of their social problem. Wolk (2004) statements stressed
organization to obtain their own financial sustainability that will cushion them through the hard
economic times and engage in social reality projects that prefer productivity and efficient
management of their resources. He argues that businesses that adopt this approach often report
good report results on organizational performance and cost benefit returns on investment.
These organizations are also required to integrated financial and programmatic initiatives into
business activities to effectively capture organization problems and maximize their profits
(Wolk, 2004, p.170).
Non-financial Resources
Non-financial resources also known as volunteers are social entrepreneurs deemed to posses
both skilled and unskilled education and may at one time rely on donations to increase the
sustainability of their initiatives. These volunteers engage in public activities that develop and
implement social solutions like the Hurricane Katrina volunteers that came out in large
numbers to complete intensely needed work in a way the government could have never afforded
by themselves (Wolk, 2004, p.171).
Social entrepreneurs in New York State
Social enterprise is a new breed of entrepreneurship that exhibits the characteristics of
innovation, risk taking and large-scale transformation. They have provided a fertile ground for
young and upcoming entrepreneurship growth by identifying present change in social
economic environment. On New York perspective, the practice of responding to market failures
with transformative, financially sustainable innovations aimed at solving societal issues is
advancing at pace that exceeds comfort zone causing the government to suffer substantial
losses in funding charitable organizations. Although there exist a variety of projects within the
New Yolk state that seems to address serious challenges faced by the society, local businessmen
and social entrepreneurs are called upon by the State’s comptroller to mobilize their efforts in
implementing solutions that will lower administrative burdens and improve state’s
accountability and oversight (Dinapoli, 2010, p.1).
Some of the State’s initiatives that include youth programs, education services and arts council
are currently being threatened by the economic downturn and social entrepreneurs are for this
case trusted to have the potential for transform the social innovations. Dinapoli (2010) gives
us a perfect example of a successful community-based initiatives that have helped stimulate
the economy by illustrating the 2006 human service organizations social entrepreneurship
initiative that reported revenues of $132.9 billion in over 24,000 NFPs and provided nearly 1.2
million jobs which contributes to about 17% of the States work force. While in June 2009, the
State was reported to have had 31,000 contractors with NFPs totaling to $14.6 billion (Dinapoli,
2010, p.1).
New York State has also been facing serious issues in regard to increased demand for goods
and services resulting to increase pressure on the State’s budget. For example, between 2008
and 2009, the State’s unemployment rates increased from 5.8% to 8.9% simultaneously and
rose from 6.0 % in 2008 to10.3% in 2009 in the New York City. The overwhelming numbers
of dependable people increased the number of people receiving food stamps by 17.5% between
January and October the same year. The State continues to struggle with program funding as
more households continue to seek assistance of all types.
Dinapoli (2010) mentions other States deficit that might have increased pressure on demand
for goods and services to include; the Home Energy Assistance Program (HEAP) increased
deficit of 36.3 percent between 2008 and 2009, the State’s budget deficit of $4.1billion for the
fiscal year 2009-2010, and the projected deficit of more than $23 billion expected to hit through
SFY between 2011 to 2011. Charitable activities have also reduced their contributions to social
activities and private corporations and philanthropic organizations no longer provide
significant funds to finance societal services (Dinapoli, 2010, p.2).
Contracts Delays and Late Payments
Quite a number of not for profit (NFPs) organizations receive funding from the State through
contract allocations. According to the Office of the State Comptroller (OSC) of New York State,
about 87% of state contracts in 2009 were reported to have been delayed as a result of the
economic downturn. These delays forced NFPs to perform activities without any payments
hence resulting to increased borrowing to finance their projects. Dinapoli (2010) reports
indicated that about 69% of NFPs resorted to borrowing due the delayed government contracts
and payments. This gap can be bridged by businesses involvement in community initiatives
that require social enterprise participation (Dinapoli, 2010, p.4).
Social entrepreneurs have been identified to present change in social economic environment
by engaging businesses in their activities. Social entrepreneurs for this case involve players
such as volunteers and not for profit organizations in meeting social needs. Some of the inherent
benefits of including community activities in social entrepreneurship include full utilization of
human resources, increased diversity which reduces intercultural conflicts among community
members, enhances work relationship based on mutual respect and increased knowledge of
multicultural issues. It is also argued that community involvement Increases commitment
among diverse cultures and across all functions, increases community participation in key-
decision making and problem solving and improves productivity and reduces energy spend in
solving cultural clashes (Chase, 2000, p. 12; Simons, 2000, p.4).).
It’s important for users, service providers, the community and the government to stay ahead of
the societal challenges. Policy makers in this case require the public to take active roles in
providing innovative ideas to handle these changes. Chase (2000) requires the integration
between society and the economy in evaluating societal needs and the attainment of certain
social and economic goals. Chase (2000) definitions of social entrepreneurship are not aimed
at describing functions of social entrepreneurs but rather as effective instruments for combating
social problems and vehicle for social cohesion.
He defines social entrepreneurs as nonprofit agencies that maximize their mission-related
performance through development of new ventures or by reorganizing existing activities to
improve operational effectiveness. For profit companies that are involved in social activities
can also be referred as social enterprises embedded in social purpose. Non profit can be linked
to a wide range of foundations, associated organizations and organizations that operate outside
the parameters of common markets (Chase, 2000, p.12).
Although little research has been done on nonprofit organization from social entrepreneurship
perspective, Wolk (2004) recognizes them as powerful tools that have revitalized otherwise
deprived areas, communities and localities and produced services that are not being produced
by mainstream commercial enterprises. Ashoka foundation illustrates a perfect example of
social entrepreneurs that have become leaders in social change by providing sources through
inter-sectoral resources without limiting themselves to traditional charitable models.
Social entrepreneurs and nonprofit organization seem to be categorized in the same model of
community service as they both possess common themes in addressing complex social needs
in effective and integrated ways and regenerating communities’ needs. Another common
characteristics exhibited in these two organizations includes their ability to recognize the
society’s need for an incubation period, allows new ventures to mature, undergo rigorous
ongoing assessment to maximize outcomes and identify needs, support and develop them
(Simons, 2000, p.4).
To understand how social entrepreneurs contribute to the society. Three factors keep
reoccurring throughout the essay. First, social entrepreneurs have a capacity to be a leader in
the social field change which is achieved by their ability to break social reforms and design
innovative programs. Second, their rigorous approach in maximizing societal changes and
outcomes. And third, their ability to take outstanding or emerging social problems. The ability
to collaborate, challenge and support community initiatives in reference to the community,
business and government activities achieves them higher in the society (Simons, 2000, p.4).
Challenges often faced by social enterprise are their inability to collaborate all the three sectors
into long-term and strategic objectives of innovation, research and capacity building. All the
three sectors are required to harness capacities of all sectors in order to realize sustainable
societal change. For instance, development in social activities requires collaboration of both
research and development funds. Their aim is to provide resources that can be adopted into
different communities and service providers that will adapt rapidly to changing political, social
and funding environment. Research is also needed as means of investment in promoting good
practice and development of good policy (Simons, 2000, p.4).
Nonprofit organizations and social enterprises continue to seek solutions to social problems by
providing easy to interpret results. Their initiatives translate changing latent needs into explicit
demands, provide innovative goods and services by developing or running the local or
interregional networks, integrating human and financial services for mutual benefit. Just as
traditional enterprises are critical to such areas such as industry and technology, social
entrepreneurs are as well critical to areas of human needs such as health, environment, young
people, and revitalizing communities.
They transform the community by generating initiative approaches to needy private and public
sectors as well as nonprofit sectors (Wolk, 2004). Until corporations are willing to be
strategically involved in funding, designing and implementing community based programs,
corporate donations will still be necessary. Corporate should also work with volunteers in
implement positive and productive community initiatives. Although research in this essay keep
shifting from charitable activities to social entrepreneurship, its important to note that social
entrepreneurs still serve as seedbeds for innovations (Simons, 2000, p.1).
Adaptation of social entrepreneur initiatives into the community has however not been without
challenges. Providing leadership in a dynamic community often receives resistance in
adaptation and the sufferers are always the needy society members. Cooperation between
economic and social players, including government funding welfare programs should be
encouraged since they are the main reason for the growth of social enterprise.
Social entrepreneur have the ability to enhance their research capacity by strategizing in
research alliances and partnering with communities and government to ensure accurate
identification of problems and appropriate provision of resources. One best activity obtained
from social entrepreneurs should be combined community development and business skills to
ensure continued developments. The type of interventions emerging from social enterprise
model should focus on measures of community social capacity rather than concentrating on
profit motives (Simons, 2000, p.3).
Government Support for Social Entrepreneurs
Social entrepreneurs help in testing and developing promising solutions and compliment
governments role in addressing market failures that benefit the citizens. Billy shore founder of
Share Our Strength pointed out that social entrepreneurs create a pipeline for the government,
they take more risks and do things the government cannot do since they are closer to people.
Social entrepreneurship have added value to the community research and addressed major
micro-dimensions in the society that could otherwise have been ignored.
Their approach has also helped the government recognize the compatibility of their approach
in informing and influencing social policy according to emerging models hence improving
relationship between themselves and non-governmental organizations. Social entrepreneurs are
hoped for benefits, develop skills in anticipation and responding to those most at risk, and
enhance the ability to broker evidence based policy development.
They develop close to the grassroots, they interpret and anticipate the needs of most vulnerable
groups and further their integration into social and professional life. They can be hotbeds for
ideas and experiments. After they identify new and emerging demands, they present their ideas
to the public sector decision makers through their partnership with them. Their ethical approach
to new ideas adds extra value to production of goods and services to the society and decrease
administrative burdens (Wolk, 2004, p.188).
Building capacity for societal change and fostering the social innovation requires deliberate
strategies to foster the development of social enterprise and social entrepreneurs who drive
them. Having collected qualitative data from the government, social entrepreneurs are in a
better position to become brokers of evidence based policy development. They have a wealth
of knowledge and wisdom based on experience with the disadvantaged that can facilitate the
adoption of innovative policies at the central, regional and local governments. They facilitate
the community greater sense of partnership into the markets generated wealth, unlocking
opportunities and encourage community participation into policy making process (Wolk, 2004,
p.188).
Successful implementation of social entrepreneurship skills relies upon the active participation
of the three sectors which includes the government, business and community focused activities.
Social entrepreneurs for this case are required to remain alert to any for strategic alliance with
other segments of society that would help realize their dreams. Their main objective of the
strategic alliances is to facilitate the initiation and maintenance of relations across sectors and
help realize key outcomes, combating social exclusion, promotion of social cohesion and
unlocking opportunities for constructive participation.
They also act as outcomes measurements and provide reference points for the development of
benchmarks to assess ongoing and planned activities. Responding to the disadvantaged
simultaneously requires working for societal change for effective and sustainable outcomes. It
considers taking what is considered risky to provide joint leadership in working with others for
more a cohesive society (Wolk, 2004, p.189).
Social entrepreneurs are best known to leverage both public and private sectors, and test and
develop solutions. As evident from research gathered around the globe, the United States
government lacks strategic measures to help address the country’s social problems. The
government however has over the years tried supporting social entrepreneurs through creating
enabling environment for social entrepreneurial initiatives, rewarding initiatives for
performing, encouraging social innovation, scaling initiative success and producing knowledge
that enhances social entrepreneur efforts (Wolk, 2004, p.189).
Launching new initiatives in the markets may be a challenging task for social entrepreneurs.
To help them endure trials of the start up phase, many foundations such as Echoing Green and
Ashoka have been set up to provide support for early organizational development. Various
academic programs that sponsor competition and awards have also stepped up to encourage
social innovation and foundation of new initiatives.
The government should in this case follow this approach by taking proactive roles in
encouraging social innovation by acting as seedbeds in supporting their initiatives mostly in
the start-up phases. For example, the ITNAmerica would not have achieved its goals without
the federal monetary support. The Transit IDEA program sponsored by the Transport Research
Board benefited the public by providing feasibility study that enabled the foundation explore
senior citizens consumer behavior related to fee-based automobile transport services and
helped the foundation explore innovative payment plans and information system technology
(Wolk, 2004, p.189).
Social entrepreneurs often experience barriers addressing social problems, and the government
should in this case help by creating an enabling environment through removing barriers,
supporting collaboration and lending credibility. Existing laws and policy changes can act as
barrier for social innovation and the government should shift its focus from bureaucratic rules
and allow social cohesion and sustainable development. The government ca also show support
by rewarding performance. Howard Husock, the director of the Manhattan Institute Social
entrepreneurship Initiative points out in Wolk (2004) that “social entrepreneurs want access to
reliable sources of financing that recognize performance” (p.191).
Therefore the government can step up by supporting their initiatives through performance-
based rewards and by funding and purchasing their products and services. For example, the
RSVP’s initiative of reducing recidivism among criminal offenders, San Francisco city
managers continued funding RSVP line item long after grand funding ran out. Another example
is illustrated in Arkenstone Reading Machine that was purchased by U.S. Department of
Veterans Affair (VA) hospitals (Wolk, 2004, p.192).
Most societal innovations rely on published information provided by the government in helping
them find the target social problems and identify how many people are affected. Available
research data, funds evaluation that provide critical information documented by the
government helps in identifying problems and compare various interventions against standard
for success for those working towards solving social problems. Some of the initiatives that have
relied on government‘s data include KaBOOM and Benetech in understanding the nature of
the social problem.
For example, the federal funded ITNAmerica financed transport services that revealed the
safety concerns for older drivers that have become essential for citizens. Consensus data
provided by the government also helped social entrepreneurs predict the growing size of
American population that allowed program planning. Social entrepreneurs use government
reports to initiate projects, development and start up similar programs around the country. In
overall, government data is important in identifying social problems, setting standards and
gauging success (Wolk, 2004, p.196).
Conclusion
Research obtained from this essay argues that collaboration of any strategic plans in support of
the social entrepreneurship is particularly important to policy makers. Collaboration of
community members and the government in social entrepreneurship should therefore be
encouraged as it has seen to influence social entrepreneurship growth in the recent years.
Integration of business models and government initiative roles in utilizing market innovation
and productivity in responding to market failures, providing goods and services will decrease
administrative burdens, create transformative solutions and financial sustainable innovations
aimed at solving social problem.
The government on the other hand should shift its focus of bureaucratic rules and concentrate
on entrepreneurship innovations that provided a fertile ground for growth. In reducing New
York State’s deficit, the government should standardize contracts, make timely payments,
prioritize state funding and encourage financial support. Since social entrepreneurs facilitate
the community greater sense of partnership into the markets generated wealth, unlocking
opportunities that would have otherwise been ignored and includes community input into the
policy making process, public and private sectors partnership should always be encouraged in
order to develop solutions.
Organizations on the other hand should integrated financial and programmatic initiatives into
business activities to effectively capture organization problems and maximize their profits.
Incorporating new ideas from experts in the field of social entrepreneurship provides a fertile
ground for young and upcoming entrepreneurship growth by identifying present change in a
social economic environment. In evaluating the benefits of social entrepreneurs in our society,
it’s important for the government to award their efforts through sponsorship, purchase of their
products, prize awards and providing necessary research to facilitate their innovations.
Although there exist a variety of projects within the New Yolk state that seems to address
serious challenges faced by the society, local businessmen and social entrepreneurs are called
upon by the to mobilize their efforts in implementing solutions that will lower administrative
burdens and improve state’s accountability and lives of the local citizens. Since the process of
social entrepreneurship and its strategic goals for improving social welfare of the society
requires collaboration of different sectors across the economy, public, private and the
community enterprises should work in unity to help facilitate the initiation and maintenance of
innovative activities.
Social Entrepreneurs
Ashoka (2010) describes social entrepreneurs to be “people with ambitious and persistence
skills in tackling major social issues that offer new ideas for wide-scale change”(p.1). They
take proactive approaches in trying to change the system and provide solutions to societal
problems by mobilizing the entire society to take the leaps. Their initiatives focus on solving
the societal issues rather than leaving the issues to the government or business sectors. He also
defines them as mass recruiters with ethical skills and have the ability to mobilize people to
stand up for their ideas and implement them.
Social entrepreneurship use market-driven business model in addressing key environmental
issues and critical social needs. They take full responsibility of their project initiatives as they
don’t rely on government shifting focus. Ashoka (2010) also states that these kind of
entrepreneurs “ have the ability to grow to meet needs and priorities of the communities it
serves, as opposed to public sector limited to funds provided by the government” (p.1).
His definitions fits bigger concept of societal innovations as it broadly describes them as
entrepreneurs who provides solutions that are effective, efficient and sustainable to solve the
society social problems. The definitions are not limited to enterprise based approaches to
solving critical issues but also a social enterprise for social innovation. It should however be
noted that social enterprise is not about balancing the double standards of profit and social
impact but to obtain community sustainment projects (Ashoka, 2010).
Despite minimum support from the government and local volunteers, there seems to be general
agreement among the supporters of social entrepreneurship as to its key underlying goals and
their consequences for societal change. Social entrepreneurship innovative and interpretive
approach to societal problem has gained world wide recognition mainly from media houses
and policy makers, as a significant contributor to a country’s economy and to represent
distinctive part of the country’s social and economic activities.
These supporters deem to be building a perfect example of government and corporate bodies’
involvement in social activities. The United States government for example government
supports social entrepreneurs by allocating about $1 trillion every year to federal funds
dedicated to solving social issues. The monetary support may not be enough in the long run
since these organizations always desire for capital to develop their activities. Wolk (2004,
p.151) in his statement argues the government to form an alliance with social entrepreneurs to
generate transformative and cost-effective solutions to the most challenging social problems.
Incorporating new ideas from experts in the field of social entrepreneurship provides a fertile
ground for young and upcoming entrepreneurship growth by identifying present change in a
social economic environment. In evaluating the benefits of social entrepreneurs in our society,
it’s important to determine who social entrepreneurs are, how they benefit the government as
well as private and public businesses and what the government is doing to support them
(Simons, 2000, p.4).
The emergence of social entrepreneurs
Since the focus here is on the how social entrepreneurs has influenced the economy and
provided solutions to societal problems, three stages of responding to societal needs can be
identified. These stages, which correspond very closely with Roger and Osberg (2007, p.30)
include; a) market failures b) transformative innovations and; 3) financial sustainability. To
determine how social entrepreneur emerged as nexus from these factors, it’s important to
establish how it helped the government and improved the lives of public official constituents.
Although different aspects of social entrepreneur appear in all parts of the essay, case examples
illustrated throughout the paper help us understand how social entrepreneurship leverage public
and private resources, test and implement solutions to social by highlighting a number of
successful social entrepreneur initiatives (Wolk 2004, p156).
It was also realized that the triangulation of three sectors of the economy that consisted of the
government, private and public sectors acts as viable transport for innovation. However, there
appears to be a particular issue with regard to collaboration between social entrepreneurs and
the government. Their relationship has proven elusive and largely fruitless in resolving social
problems, transforming and implementing financially stable solutions. In order to enhance
functional relationship between these sectors, Martin and Osberg (2007, p.30) proposes for a
more rigorous approach of government involvement in social entrepreneurship that would later
boosted the economy (Martin& Osberg, 2007).
It’s quite unfortunate that the government has made little efforts in support of social-
entrepreneur initiatives. There has been growing consensus about government involvement in
social entrepreneurship initiatives with many speculating on their significant contribution.
Wolk (2004) mentions some of the strategies government has put in place in support of social
entrepreneur innovative and interpretive approach to include; 1) helping heighten their success
2) reward their performance 3) create supportive environment for innovation 4) encourage
them to innovate and; 5) offer knowledge through published reports and data to help them solve
problems (Wolk, 2004, p157).
History of Social entrepreneurship
According to Organization for Economic Co-Operation and Development (2006), quite a
majority of Americans live in poverty with about one quarter of the adults failing to complete
high school. The country’s health sector was also reported to have ranked 37 in the world’s
health review which was equivalent to status of a developing nation. These declines in both
economic and health sectors has increased the need for social entrepreneurship and its promises
as a means of addressing daunting social needs. Given the magnitude of needs the economy
has, the U.S government for this case is required to inject large sources of funds from federal
reserves, local government and the state to help solve these problems.
In attempting to fill this gap, Wolk (2004, p.155) proposes that the government should look
into the social entrepreneurship assistance for now ideas. He adds that the collaboration
between the two sectors will effectively identify societal needs and provide viable solutions to
the problems. His proposal throughout the essay attempts to define what social entrepreneur is
based on case studies and expert ideas and breaks the new ground in exploring new ways in
which government leaders as well as other constituents are benefiting from their efforts.
In today’s dynamic economy, there’s nothing as powerful as new ideas. Shoka (2010) quotes
more historical examples of social entrepreneurs to include “Susan B. Anthony (U.S.): Fought
for Women’s Rights in the United States, including the right to control property and helped
spearhead adoption of the 19th amendment” (p.1). He also mentions Vinaba Bhave founder of
the Land Gift Movement and the Italian social entrepreneur Dr. Maria Montessori founder of
Early Childhood Education among others (Ashoka, 2010).
In 2007, President George W. Bush acknowledged a variety of social entrepreneurs who have
helped the American society achieve a competitive age. Among the honored guests were Julie
Aigner-Clarke, founder of the Children Video Company and Baby Einstein producer of the
Child Safety Video. In his statement, president Bush (2007) acknowledged Julie’s efforts by
stating that
Julie represents the great enterprising spirit of America. And she is using her success to help
others….we are please to welcome this talented business entrepreneur and generous social
entrepreneur (p.1).
The president’s exploration of creative tasks delineateb by social entrepreneurs towards
community development applauded their efforts in responding to market failures, creating
transformative and financially sustainable innovations aimed at solving social problems.
Popular media has not been left behind on recognizing social entrepreneurs in our society. A
variety of media personalities for example have tried to redefined the term social
entrepreneurship to a greater household name. The Economists, Harvard Business Review, The
New York times among others have echoed this sentiment in an attempt to assess social
entrepreneurship achievements by publicizing their efforts.
According to Schumpeter (1982), markets exhibit a range of entrepreneur characteristics that
include innovative, risk-taking and large scale transformation. People deemed to possess these
characteristics were recognized in the 2006 U.S News and World Report to include Wendy
Kopp, founder of Teach For America, Michael Brown and Ali Khazei, founder of City Year
among others. Also included in the category were Grameen Bank, a Nobel Peace Winner,
Victoria Hale, founder of OneWorld Health Institute and Jim Fructerman from the MacArthur
Foundation (Wolk, 2004, 6).
Some historic examples of social innovators that changed the American social landscape are
also mentioned by Wolk (2004) to include Florence Nightingale of the 1800s foundation of the
modern field of nursing and Horace Mann, founder of public education. Wolk (2004) studies
argue that a social entrepreneur represent a distinctive part of a country’ social and economic
life and the United Stated for this case has gained tremendously. American entrepreneurship
can be traced within the context of changes that have taken place since 1980s.
The first entrepreneur recognized during that time was Edward Skloot who founded a non profit
consulting firm interested in creating business ventures. His work was published in Harvard
Business Review in 1983 as “nonprofit entrepreneurship” (Skloot, 1983, p.22) as a description
of business ventures that diversify nonprofit organization funding streams. Bill Drayton
founder of Ashoka came into play in 1981 as an Innovator for the Public to seek, support and
publicize public entrepreneurs. Pater Drucker of the management expert book was recognized
in 1985 among the first entrepreneurs to describe a phenomenon that extended into multiple
sectors (Battle& Dees, 2006, p.150).
Towards the mid 1990s social entrepreneurs began to gain new meaning as many scholars and
presses described them as anyone who started a nonprofit organization, or any business man
who integrated social responsibility into their operations. Here, social entrepreneurship is
described broadly to include a variety of organization structures and activities within the social
entrepreneurship context. Wolk (2004) argues here that social entrepreneurship stems from
initiatives that tend to exhibit the characteristics of innovations and risk taking.
He mentions various examples of social innovators throughout his research in illustrating how
entrepreneur initiatives act as seedbeds for development for non profit organizations, for profit
organizations and rather government programs. For this reason, it’s important to explain the
threes sectors in both social and economic perspective of an American economy by describe
their specific roles and responsibilities of in social entrepreneurship.. Below is an illustrated of
how social entrepreneurs have benefited the society within the context of public, private and
voluntary organizations and a description of trends that have eliminated the boundaries
between these sectors (Wolk, 2004, p.158).
Private Sector
Building capacity for societal change and fostering the social innovation requires full
participation of private and public sectors as well as voluntary organizations. A private sector
is defined by Wolk (2004) as “organization that incorporates activities of small business,
corporation and enterprises in utilizing market exchange for goods and services while
maximizing their profits” (p.158). Their strategies to foster development of social enterprises
and social entrepreneurship drive innovation and productivity into the economy.
Economists have long identified innovation as one of the major contributors to private sectors.
A former 1900s scholar Joseph Schumer once commended in Milton (1982) that “Further
contemporary economist Milton Friedman has argued that free markets, competition, and
consumer choices are also essential components of capitalism” (p.50). According to Wolk
(2004) reports, private sectors in the U.S economy represent approximately $13 trillion a year
in gross domestic product ranking the country top among the world’s largest economy.
This sector is also reported to be the major contributor to the country’s work force with 115
million employees currently working in private organizations. The public sector on the other
hand consists of about 87,900 government units with $4.3 trillion in earnings with 18 million
employees, while the non profit sectors contributes about $1.4 billion in revenue with 9.4
million employees and consists about 1.4 million organizations. The alliance between the three
sectors in carrying out social entrepreneurship has been credited to improve availability of jobs,
stimulate innovations and build wealth for the nation (Wolk, 2004, p.160).
Public Sectors
The public sector in support of social entrepreneurship is mentioned by Wolk (2004) to include
the following activities; 1) addressing inequalities in the markets by helping families living in
poverty by providing unemployment benefits and measurements for disaster assistance; 2)
providing public facilities such as policing, public defense, education and libraries to the most
needy in the society. In relation to market failure perspective, it seems complicated to define
the relationship between public sectors and social entrepreneurship as the services provided are
more than what the public is willing to pay for.
Social entrepreneurship distinctly addresses market failures since they are not profit oriented
and address the un-met public needs. The government role in re-distributing services to address
market failures is another way of contributing to social entrepreneurship. Its support of private
sectors in providing goods for the public helps address market inequalities and foster
environment for initiative development. Although a lot has been done to support these
initiatives, the government continues to face pressure in allocating resources to meet all the
societal needs (Wolk, 2004, p.161).
Non Profit Sectors
Non profit sectors have been traditionally known to engage in a variety of activities that support
social goals. Perfect examples of such organizations include private hospitals and schools,
religious organizations, and social service providers. Nonprofit sectors efforts in support social
activities are recognized when both private and public sectors have failed to meet particular
social needs and since they can not distribute the profits to their leaders, these sectors are placed
at a better position to use their revenues to sustain growth and grow their organizations.
Although they are by far the smallest sectors, nonprofit organization are known to be the fastest
growing organizations. In 1994 for example, the nonprofit organization were reported to have
doubled in number with almost 65 % growth rate which added up to 10.5% of the country’s
work force (Wolk, 2004, p.161).
Nicholls (2006) a scholar from Oxford university defines social entrepreneur to include both
multi-dimensional and dynamic construct of the economy rather than their organizational form.
All the three sectors play distinctive roles in resolving societal needs by ensuring public needs
are met. However, several trends have continued to emerge within the social entrepreneurship
spectrum bridging the gap between these sectors hence creating conducive environment for
social entrepreneurs to emerge and grow.
In private sectors for example, businesses and employees are increasingly engaging in activities
previously regarded as non-profitable as many have started engaging in educational and social
projects providing companies’ opportunity to offer services that could not have been considered
in the first place or regarded as government activities (Light, 2003). Osborne and Gaebler
(1993) journal reports states that, between 1999 and 2002, the U.S government reported to have
awarded about 700,000 contracts in federal funds to private enterprises and the public sectors
seem to have also shifted their focus from maximizing profits to engaging in social activities.
According to Goldsmith and Eggers (2004), the government engages in social enterprises by
offering opportunities to public enterprises to privatize their firms which call for business ethics
in turn promoting more competitive business environment. Private sectors have also increased
demand for efficiency and accountability and bridged the gaps in public sector delivery and
created public sector responsibility.
Goldsmith and his colleague also argue that social entrepreneurs have increased efficiency in
government funds as they only inject resources to market demands and increased preference
on issues ranging from public utilities to public schools. Government’s strategy of
monopolizing public sectors and reliance on private sectors in managing contracts and
allocating funds has greatly increased social responsibility and helped fill the gap in public
service delivery by ensuring the best services are provided (Goldsmith and Eggers, 2004).
Response to Market failures
As already discussed, social entrepreneurs characterized by their ethical skills are able to
identify to market failures and commit their resources to affect to the neediest in the society.
Because private sectors or even the government are unable to generate enough profits to
respond to these problems, these sectors bridge the gap by finding market opportunities and
maximizing their potential. Under normal circumstances, the government would try to address
the unmet needs by deploying public funds into the sectors, which has already been proven
futile in the long run. Social entrepreneurs in this case present viable options for addressing
market failures by seeking opportunities to create value rather than economical benefit.
Gregory Dees, founder of social entrepreneur argues that market approach to market
evaluations on social improvement do not adequately identify harms for people who cannot
afford to pay for the service and social entrepreneurs presence would distinctly cater for the
economy’s needs (Battle&Dees, 2006, p.160).
Social entrepreneurs insight exploration of societal problems have the ability to provide
transformational benefit that targets education and employment activities as well as the
marginalized areas that would have never been considered by the government. Wolk (2004)
categorizes market approaches into three broad perspectives that include; “no market approach,
limited market and low-profit market approach in targeting beneficiaries and responding to
market failures” (p.168).
He identifies no market approach as a social entrepreneurship strategy that offers products and
services to its potential beneficiaries without requesting for any payments. So this could mean
that the organization depends entirely on its own funding to sustain the initiatives. Limited
market approach on the other hand required beneficiaries to pay partial of the costs so sustain
the project activities, a common trend exhibited in non-profit organizations. He explains low-
profit market approach to require full payment of goods and services obtained as illustrated in
most private organizations that have the potential of generating profits (Wolk, 2004, p.168).
Transformative Innovations
Social entrepreneurs are described by many scholars as change agents, creating systematic
change by introducing new ideas and persuading others to adopt, changing social patterns that
create social problems through breaking patterns. In transformative perspective, Bill Drayton
defines social entrepreneurs as creative thinkers continuously striving for innovations.
Transformative ideas can be seen through the invention of new technologies, methods of
production, supply sources and distribution outlets and social entrepreneurs have for this case
taken these innovative approaches further by devising strategies that have benefited the whole
society (Ashoka, 2010). Social entrepreneur have been evidenced to combine their own
innovative skills, research obtained from public sources and political influence in attaining
their goals. Their ability to involve major players in the entrepreneurship activities character
sets them apart from the traditional profit oriented organizations (Wolk, 2004, p.20).
Financial Sustainability
Market analysts urge private organizations and business to should try and find a model that
responds to their unique characters of their social problem. Wolk (2004) statements stressed
organization to obtain their own financial sustainability that will cushion them through the hard
economic times and engage in social reality projects that prefer productivity and efficient
management of their resources. He argues that businesses that adopt this approach often report
good report results on organizational performance and cost benefit returns on investment.
These organizations are also required to integrated financial and programmatic initiatives into
business activities to effectively capture organization problems and maximize their profits
(Wolk, 2004, p.170).
Non-financial Resources
Non-financial resources also known as volunteers are social entrepreneurs deemed to posses
both skilled and unskilled education and may at one time rely on donations to increase the
sustainability of their initiatives. These volunteers engage in public activities that develop and
implement social solutions like the Hurricane Katrina volunteers that came out in large
numbers to complete intensely needed work in a way the government could have never afforded
by themselves (Wolk, 2004, p.171).
Social entrepreneurs in New York State
Social enterprise is a new breed of entrepreneurship that exhibits the characteristics of
innovation, risk taking and large-scale transformation. They have provided a fertile ground for
young and upcoming entrepreneurship growth by identifying present change in social
economic environment. On New York perspective, the practice of responding to market failures
with transformative, financially sustainable innovations aimed at solving societal issues is
advancing at pace that exceeds comfort zone causing the government to suffer substantial
losses in funding charitable organizations. Although there exist a variety of projects within the
New Yolk state that seems to address serious challenges faced by the society, local businessmen
and social entrepreneurs are called upon by the State’s comptroller to mobilize their efforts in
implementing solutions that will lower administrative burdens and improve state’s
accountability and oversight (Dinapoli, 2010, p.1).
Some of the State’s initiatives that include youth programs, education services and arts council
are currently being threatened by the economic downturn and social entrepreneurs are for this
case trusted to have the potential for transform the social innovations. Dinapoli (2010) gives
us a perfect example of a successful community-based initiatives that have helped stimulate
the economy by illustrating the 2006 human service organizations social entrepreneurship
initiative that reported revenues of $132.9 billion in over 24,000 NFPs and provided nearly 1.2
million jobs which contributes to about 17% of the States work force. While in June 2009, the
State was reported to have had 31,000 contractors with NFPs totaling to $14.6 billion (Dinapoli,
2010, p.1).
New York State has also been facing serious issues in regard to increased demand for goods
and services resulting to increase pressure on the State’s budget. For example, between 2008
and 2009, the State’s unemployment rates increased from 5.8% to 8.9% simultaneously and
rose from 6.0 % in 2008 to10.3% in 2009 in the New York City. The overwhelming numbers
of dependable people increased the number of people receiving food stamps by 17.5% between
January and October the same year. The State continues to struggle with program funding as
more households continue to seek assistance of all types.
Dinapoli (2010) mentions other States deficit that might have increased pressure on demand
for goods and services to include; the Home Energy Assistance Program (HEAP) increased
deficit of 36.3 percent between 2008 and 2009, the State’s budget deficit of $4.1billion for the
fiscal year 2009-2010, and the projected deficit of more than $23 billion expected to hit through
SFY between 2011 to 2011. Charitable activities have also reduced their contributions to social
activities and private corporations and philanthropic organizations no longer provide
significant funds to finance societal services (Dinapoli, 2010, p.2).
Contracts Delays and Late Payments
Quite a number of not for profit (NFPs) organizations receive funding from the State through
contract allocations. According to the Office of the State Comptroller (OSC) of New York State,
about 87% of state contracts in 2009 were reported to have been delayed as a result of the
economic downturn. These delays forced NFPs to perform activities without any payments
hence resulting to increased borrowing to finance their projects. Dinapoli (2010) reports
indicated that about 69% of NFPs resorted to borrowing due the delayed government contracts
and payments. This gap can be bridged by businesses involvement in community initiatives
that require social enterprise participation (Dinapoli, 2010, p.4).
Social entrepreneurs have been identified to present change in social economic environment
by engaging businesses in their activities. Social entrepreneurs for this case involve players
such as volunteers and not for profit organizations in meeting social needs. Some of the inherent
benefits of including community activities in social entrepreneurship include full utilization of
human resources, increased diversity which reduces intercultural conflicts among community
members, enhances work relationship based on mutual respect and increased knowledge of
multicultural issues. It is also argued that community involvement Increases commitment
among diverse cultures and across all functions, increases community participation in key-
decision making and problem solving and improves productivity and reduces energy spend in
solving cultural clashes (Chase, 2000, p. 12; Simons, 2000, p.4).).
It’s important for users, service providers, the community and the government to stay ahead of
the societal challenges. Policy makers in this case require the public to take active roles in
providing innovative ideas to handle these changes. Chase (2000) requires the integration
between society and the economy in evaluating societal needs and the attainment of certain
social and economic goals. Chase (2000) definitions of social entrepreneurship are not aimed
at describing functions of social entrepreneurs but rather as effective instruments for combating
social problems and vehicle for social cohesion.
He defines social entrepreneurs as nonprofit agencies that maximize their mission-related
performance through development of new ventures or by reorganizing existing activities to
improve operational effectiveness. For profit companies that are involved in social activities
can also be referred as social enterprises embedded in social purpose. Non profit can be linked
to a wide range of foundations, associated organizations and organizations that operate outside
the parameters of common markets (Chase, 2000, p.12).
Although little research has been done on nonprofit organization from social entrepreneurship
perspective, Wolk (2004) recognizes them as powerful tools that have revitalized otherwise
deprived areas, communities and localities and produced services that are not being produced
by mainstream commercial enterprises. Ashoka foundation illustrates a perfect example of
social entrepreneurs that have become leaders in social change by providing sources through
inter-sectoral resources without limiting themselves to traditional charitable models.
Social entrepreneurs and nonprofit organization seem to be categorized in the same model of
community service as they both possess common themes in addressing complex social needs
in effective and integrated ways and regenerating communities’ needs. Another common
characteristics exhibited in these two organizations includes their ability to recognize the
society’s need for an incubation period, allows new ventures to mature, undergo rigorous
ongoing assessment to maximize outcomes and identify needs, support and develop them
(Simons, 2000, p.4).
To understand how social entrepreneurs contribute to the society. Three factors keep
reoccurring throughout the essay. First, social entrepreneurs have a capacity to be a leader in
the social field change which is achieved by their ability to break social reforms and design
innovative programs. Second, their rigorous approach in maximizing societal changes and
outcomes. And third, their ability to take outstanding or emerging social problems. The ability
to collaborate, challenge and support community initiatives in reference to the community,
business and government activities achieves them higher in the society (Simons, 2000, p.4).
Challenges often faced by social enterprise are their inability to collaborate all the three sectors
into long-term and strategic objectives of innovation, research and capacity building. All the
three sectors are required to harness capacities of all sectors in order to realize sustainable
societal change. For instance, development in social activities requires collaboration of both
research and development funds. Their aim is to provide resources that can be adopted into
different communities and service providers that will adapt rapidly to changing political, social
and funding environment. Research is also needed as means of investment in promoting good
practice and development of good policy (Simons, 2000, p.4).
Nonprofit organizations and social enterprises continue to seek solutions to social problems by
providing easy to interpret results. Their initiatives translate changing latent needs into explicit
demands, provide innovative goods and services by developing or running the local or
interregional networks, integrating human and financial services for mutual benefit. Just as
traditional enterprises are critical to such areas such as industry and technology, social
entrepreneurs are as well critical to areas of human needs such as health, environment, young
people, and revitalizing communities.
They transform the community by generating initiative approaches to needy private and public
sectors as well as nonprofit sectors (Wolk, 2004). Until corporations are willing to be
strategically involved in funding, designing and implementing community based programs,
corporate donations will still be necessary. Corporate should also work with volunteers in
implement positive and productive community initiatives. Although research in this essay keep
shifting from charitable activities to social entrepreneurship, its important to note that social
entrepreneurs still serve as seedbeds for innovations (Simons, 2000, p.1).
Adaptation of social entrepreneur initiatives into the community has however not been without
challenges. Providing leadership in a dynamic community often receives resistance in
adaptation and the sufferers are always the needy society members. Cooperation between
economic and social players, including government funding welfare programs should be
encouraged since they are the main reason for the growth of social enterprise.
Social entrepreneur have the ability to enhance their research capacity by strategizing in
research alliances and partnering with communities and government to ensure accurate
identification of problems and appropriate provision of resources. One best activity obtained
from social entrepreneurs should be combined community development and business skills to
ensure continued developments. The type of interventions emerging from social enterprise
model should focus on measures of community social capacity rather than concentrating on
profit motives (Simons, 2000, p.3).
Government Support for Social Entrepreneurs
Social entrepreneurs help in testing and developing promising solutions and compliment
governments role in addressing market failures that benefit the citizens. Billy shore founder of
Share Our Strength pointed out that social entrepreneurs create a pipeline for the government,
they take more risks and do things the government cannot do since they are closer to people.
Social entrepreneurship have added value to the community research and addressed major
micro-dimensions in the society that could otherwise have been ignored.
Their approach has also helped the government recognize the compatibility of their approach
in informing and influencing social policy according to emerging models hence improving
relationship between themselves and non-governmental organizations. Social entrepreneurs are
hoped for benefits, develop skills in anticipation and responding to those most at risk, and
enhance the ability to broker evidence based policy development.
They develop close to the grassroots, they interpret and anticipate the needs of most vulnerable
groups and further their integration into social and professional life. They can be hotbeds for
ideas and experiments. After they identify new and emerging demands, they present their ideas
to the public sector decision makers through their partnership with them. Their ethical approach
to new ideas adds extra value to production of goods and services to the society and decrease
administrative burdens (Wolk, 2004, p.188).
Building capacity for societal change and fostering the social innovation requires deliberate
strategies to foster the development of social enterprise and social entrepreneurs who drive
them. Having collected qualitative data from the government, social entrepreneurs are in a
better position to become brokers of evidence based policy development. They have a wealth
of knowledge and wisdom based on experience with the disadvantaged that can facilitate the
adoption of innovative policies at the central, regional and local governments. They facilitate
the community greater sense of partnership into the markets generated wealth, unlocking
opportunities and encourage community participation into policy making process (Wolk, 2004,
p.188).
Successful implementation of social entrepreneurship skills relies upon the active participation
of the three sectors which includes the government, business and community focused activities.
Social entrepreneurs for this case are required to remain alert to any for strategic alliance with
other segments of society that would help realize their dreams. Their main objective of the
strategic alliances is to facilitate the initiation and maintenance of relations across sectors and
help realize key outcomes, combating social exclusion, promotion of social cohesion and
unlocking opportunities for constructive participation.
They also act as outcomes measurements and provide reference points for the development of
benchmarks to assess ongoing and planned activities. Responding to the disadvantaged
simultaneously requires working for societal change for effective and sustainable outcomes. It
considers taking what is considered risky to provide joint leadership in working with others for
more a cohesive society (Wolk, 2004, p.189).
Social entrepreneurs are best known to leverage both public and private sectors, and test and
develop solutions. As evident from research gathered around the globe, the United States
government lacks strategic measures to help address the country’s social problems. The
government however has over the years tried supporting social entrepreneurs through creating
enabling environment for social entrepreneurial initiatives, rewarding initiatives for
performing, encouraging social innovation, scaling initiative success and producing knowledge
that enhances social entrepreneur efforts (Wolk, 2004, p.189).
Launching new initiatives in the markets may be a challenging task for social entrepreneurs.
To help them endure trials of the start up phase, many foundations such as Echoing Green and
Ashoka have been set up to provide support for early organizational development. Various
academic programs that sponsor competition and awards have also stepped up to encourage
social innovation and foundation of new initiatives.
The government should in this case follow this approach by taking proactive roles in
encouraging social innovation by acting as seedbeds in supporting their initiatives mostly in
the start-up phases. For example, the ITNAmerica would not have achieved its goals without
the federal monetary support. The Transit IDEA program sponsored by the Transport Research
Board benefited the public by providing feasibility study that enabled the foundation explore
senior citizens consumer behavior related to fee-based automobile transport services and
helped the foundation explore innovative payment plans and information system technology
(Wolk, 2004, p.189).
Social entrepreneurs often experience barriers addressing social problems, and the government
should in this case help by creating an enabling environment through removing barriers,
supporting collaboration and lending credibility. Existing laws and policy changes can act as
barrier for social innovation and the government should shift its focus from bureaucratic rules
and allow social cohesion and sustainable development. The government ca also show support
by rewarding performance. Howard Husock, the director of the Manhattan Institute Social
entrepreneurship Initiative points out in Wolk (2004) that “social entrepreneurs want access to
reliable sources of financing that recognize performance” (p.191).
Therefore the government can step up by supporting their initiatives through performance-
based rewards and by funding and purchasing their products and services. For example, the
RSVP’s initiative of reducing recidivism among criminal offenders, San Francisco city
managers continued funding RSVP line item long after grand funding ran out. Another example
is illustrated in Arkenstone Reading Machine that was purchased by U.S. Department of
Veterans Affair (VA) hospitals (Wolk, 2004, p.192).
Most societal innovations rely on published information provided by the government in helping
them find the target social problems and identify how many people are affected. Available
research data, funds evaluation that provide critical information documented by the
government helps in identifying problems and compare various interventions against standard
for success for those working towards solving social problems. Some of the initiatives that have
relied on government‘s data include KaBOOM and Benetech in understanding the nature of
the social problem.
For example, the federal funded ITNAmerica financed transport services that revealed the
safety concerns for older drivers that have become essential for citizens. Consensus data
provided by the government also helped social entrepreneurs predict the growing size of
American population that allowed program planning. Social entrepreneurs use government
reports to initiate projects, development and start up similar programs around the country. In
overall, government data is important in identifying social problems, setting standards and
gauging success (Wolk, 2004, p.196).
Conclusion
Research obtained from this essay argues that collaboration of any strategic plans in support of
the social entrepreneurship is particularly important to policy makers. Collaboration of
community members and the government in social entrepreneurship should therefore be
encouraged as it has seen to influence social entrepreneurship growth in the recent years.
Integration of business models and government initiative roles in utilizing market innovation
and productivity in responding to market failures, providing goods and services will decrease
administrative burdens, create transformative solutions and financial sustainable innovations
aimed at solving social problem.
The government on the other hand should shift its focus of bureaucratic rules and concentrate
on entrepreneurship innovations that provided a fertile ground for growth. In reducing New
York State’s deficit, the government should standardize contracts, make timely payments,
prioritize state funding and encourage financial support. Since social entrepreneurs facilitate
the community greater sense of partnership into the markets generated wealth, unlocking
opportunities that would have otherwise been ignored and includes community input into the
policy making process, public and private sectors partnership should always be encouraged in
order to develop solutions.
Organizations on the other hand should integrated financial and programmatic initiatives into
business activities to effectively capture organization problems and maximize their profits.
Incorporating new ideas from experts in the field of social entrepreneurship provides a fertile
ground for young and upcoming entrepreneurship growth by identifying present change in a
social economic environment. In evaluating the benefits of social entrepreneurs in our society,
it’s important for the government to award their efforts through sponsorship, purchase of their
products, prize awards and providing necessary research to facilitate their innovations.
Although there exist a variety of projects within the New Yolk state that seems to address
serious challenges faced by the society, local businessmen and social entrepreneurs are called
upon by the to mobilize their efforts in implementing solutions that will lower administrative
burdens and improve state’s accountability and lives of the local citizens. Since the process of
social entrepreneurship and its strategic goals for improving social welfare of the society
requires collaboration of different sectors across the economy, public, private and the
community enterprises should work in unity to help facilitate the initiation and maintenance of
innovative activities.
Social Entrepreneurs
Ashoka (2010) describes social entrepreneurs to be “people with ambitious and persistence
skills in tackling major social issues that offer new ideas for wide-scale change”(p.1). They
take proactive approaches in trying to change the system and provide solutions to societal
problems by mobilizing the entire society to take the leaps. Their initiatives focus on solving
the societal issues rather than leaving the issues to the government or business sectors. He also
defines them as mass recruiters with ethical skills and have the ability to mobilize people to
stand up for their ideas and implement them.
Social entrepreneurship use market-driven business model in addressing key environmental
issues and critical social needs. They take full responsibility of their project initiatives as they
don’t rely on government shifting focus. Ashoka (2010) also states that these kind of
entrepreneurs “ have the ability to grow to meet needs and priorities of the communities it
serves, as opposed to public sector limited to funds provided by the government” (p.1).
His definitions fits bigger concept of societal innovations as it broadly describes them as
entrepreneurs who provides solutions that are effective, efficient and sustainable to solve the
society social problems. The definitions are not limited to enterprise based approaches to
solving critical issues but also a social enterprise for social innovation. It should however be
noted that social enterprise is not about balancing the double standards of profit and social
impact but to obtain community sustainment projects (Ashoka, 2010).
Despite minimum support from the government and local volunteers, there seems to be general
agreement among the supporters of social entrepreneurship as to its key underlying goals and
their consequences for societal change. Social entrepreneurship innovative and interpretive
approach to societal problem has gained world wide recognition mainly from media houses
and policy makers, as a significant contributor to a country’s economy and to represent
distinctive part of the country’s social and economic activities.
These supporters deem to be building a perfect example of government and corporate bodies’
involvement in social activities. The United States government for example government
supports social entrepreneurs by allocating about $1 trillion every year to federal funds
dedicated to solving social issues. The monetary support may not be enough in the long run
since these organizations always desire for capital to develop their activities. Wolk (2004,
p.151) in his statement argues the government to form an alliance with social entrepreneurs to
generate transformative and cost-effective solutions to the most challenging social problems.
Incorporating new ideas from experts in the field of social entrepreneurship provides a fertile
ground for young and upcoming entrepreneurship growth by identifying present change in a
social economic environment. In evaluating the benefits of social entrepreneurs in our society,
it’s important to determine who social entrepreneurs are, how they benefit the government as
well as private and public businesses and what the government is doing to support them
(Simons, 2000, p.4).
The emergence of social entrepreneurs
Since the focus here is on the how social entrepreneurs has influenced the economy and
provided solutions to societal problems, three stages of responding to societal needs can be
identified. These stages, which correspond very closely with Roger and Osberg (2007, p.30)
include; a) market failures b) transformative innovations and; 3) financial sustainability. To
determine how social entrepreneur emerged as nexus from these factors, it’s important to
establish how it helped the government and improved the lives of public official constituents.
Although different aspects of social entrepreneur appear in all parts of the essay, case examples
illustrated throughout the paper help us understand how social entrepreneurship leverage public
and private resources, test and implement solutions to social by highlighting a number of
successful social entrepreneur initiatives (Wolk 2004, p156).
It was also realized that the triangulation of three sectors of the economy that consisted of the
government, private and public sectors acts as viable transport for innovation. However, there
appears to be a particular issue with regard to collaboration between social entrepreneurs and
the government. Their relationship has proven elusive and largely fruitless in resolving social
problems, transforming and implementing financially stable solutions. In order to enhance
functional relationship between these sectors, Martin and Osberg (2007, p.30) proposes for a
more rigorous approach of government involvement in social entrepreneurship that would later
boosted the economy (Martin& Osberg, 2007).
It’s quite unfortunate that the government has made little efforts in support of social-
entrepreneur initiatives. There has been growing consensus about government involvement in
social entrepreneurship initiatives with many speculating on their significant contribution.
Wolk (2004) mentions some of the strategies government has put in place in support of social
entrepreneur innovative and interpretive approach to include; 1) helping heighten their success
2) reward their performance 3) create supportive environment for innovation 4) encourage
them to innovate and; 5) offer knowledge through published reports and data to help them solve
problems (Wolk, 2004, p157).
History of Social entrepreneurship
According to Organization for Economic Co-Operation and Development (2006), quite a
majority of Americans live in poverty with about one quarter of the adults failing to complete
high school. The country’s health sector was also reported to have ranked 37 in the world’s
health review which was equivalent to status of a developing nation. These declines in both
economic and health sectors has increased the need for social entrepreneurship and its promises
as a means of addressing daunting social needs. Given the magnitude of needs the economy
has, the U.S government for this case is required to inject large sources of funds from federal
reserves, local government and the state to help solve these problems.
In attempting to fill this gap, Wolk (2004, p.155) proposes that the government should look
into the social entrepreneurship assistance for now ideas. He adds that the collaboration
between the two sectors will effectively identify societal needs and provide viable solutions to
the problems. His proposal throughout the essay attempts to define what social entrepreneur is
based on case studies and expert ideas and breaks the new ground in exploring new ways in
which government leaders as well as other constituents are benefiting from their efforts.
In today’s dynamic economy, there’s nothing as powerful as new ideas. Shoka (2010) quotes
more historical examples of social entrepreneurs to include “Susan B. Anthony (U.S.): Fought
for Women’s Rights in the United States, including the right to control property and helped
spearhead adoption of the 19th amendment” (p.1). He also mentions Vinaba Bhave founder of
the Land Gift Movement and the Italian social entrepreneur Dr. Maria Montessori founder of
Early Childhood Education among others (Ashoka, 2010).
In 2007, President George W. Bush acknowledged a variety of social entrepreneurs who have
helped the American society achieve a competitive age. Among the honored guests were Julie
Aigner-Clarke, founder of the Children Video Company and Baby Einstein producer of the
Child Safety Video. In his statement, president Bush (2007) acknowledged Julie’s efforts by
stating that
Julie represents the great enterprising spirit of America. And she is using her success to help
others….we are please to welcome this talented business entrepreneur and generous social
entrepreneur (p.1).
The president’s exploration of creative tasks delineateb by social entrepreneurs towards
community development applauded their efforts in responding to market failures, creating
transformative and financially sustainable innovations aimed at solving social problems.
Popular media has not been left behind on recognizing social entrepreneurs in our society. A
variety of media personalities for example have tried to redefined the term social
entrepreneurship to a greater household name. The Economists, Harvard Business Review, The
New York times among others have echoed this sentiment in an attempt to assess social
entrepreneurship achievements by publicizing their efforts.
According to Schumpeter (1982), markets exhibit a range of entrepreneur characteristics that
include innovative, risk-taking and large scale transformation. People deemed to possess these
characteristics were recognized in the 2006 U.S News and World Report to include Wendy
Kopp, founder of Teach For America, Michael Brown and Ali Khazei, founder of City Year
among others. Also included in the category were Grameen Bank, a Nobel Peace Winner,
Victoria Hale, founder of OneWorld Health Institute and Jim Fructerman from the MacArthur
Foundation (Wolk, 2004, 6).
Some historic examples of social innovators that changed the American social landscape are
also mentioned by Wolk (2004) to include Florence Nightingale of the 1800s foundation of the
modern field of nursing and Horace Mann, founder of public education. Wolk (2004) studies
argue that a social entrepreneur represent a distinctive part of a country’ social and economic
life and the United Stated for this case has gained tremendously. American entrepreneurship
can be traced within the context of changes that have taken place since 1980s.
The first entrepreneur recognized during that time was Edward Skloot who founded a non profit
consulting firm interested in creating business ventures. His work was published in Harvard
Business Review in 1983 as “nonprofit entrepreneurship” (Skloot, 1983, p.22) as a description
of business ventures that diversify nonprofit organization funding streams. Bill Drayton
founder of Ashoka came into play in 1981 as an Innovator for the Public to seek, support and
publicize public entrepreneurs. Pater Drucker of the management expert book was recognized
in 1985 among the first entrepreneurs to describe a phenomenon that extended into multiple
sectors (Battle& Dees, 2006, p.150).
Towards the mid 1990s social entrepreneurs began to gain new meaning as many scholars and
presses described them as anyone who started a nonprofit organization, or any business man
who integrated social responsibility into their operations. Here, social entrepreneurship is
described broadly to include a variety of organization structures and activities within the social
entrepreneurship context. Wolk (2004) argues here that social entrepreneurship stems from
initiatives that tend to exhibit the characteristics of innovations and risk taking.
He mentions various examples of social innovators throughout his research in illustrating how
entrepreneur initiatives act as seedbeds for development for non profit organizations, for profit
organizations and rather government programs. For this reason, it’s important to explain the
threes sectors in both social and economic perspective of an American economy by describe
their specific roles and responsibilities of in social entrepreneurship.. Below is an illustrated of
how social entrepreneurs have benefited the society within the context of public, private and
voluntary organizations and a description of trends that have eliminated the boundaries
between these sectors (Wolk, 2004, p.158).
Private Sector
Building capacity for societal change and fostering the social innovation requires full
participation of private and public sectors as well as voluntary organizations. A private sector
is defined by Wolk (2004) as “organization that incorporates activities of small business,
corporation and enterprises in utilizing market exchange for goods and services while
maximizing their profits” (p.158). Their strategies to foster development of social enterprises
and social entrepreneurship drive innovation and productivity into the economy.
Economists have long identified innovation as one of the major contributors to private sectors.
A former 1900s scholar Joseph Schumer once commended in Milton (1982) that “Further
contemporary economist Milton Friedman has argued that free markets, competition, and
consumer choices are also essential components of capitalism” (p.50). According to Wolk
(2004) reports, private sectors in the U.S economy represent approximately $13 trillion a year
in gross domestic product ranking the country top among the world’s largest economy.
This sector is also reported to be the major contributor to the country’s work force with 115
million employees currently working in private organizations. The public sector on the other
hand consists of about 87,900 government units with $4.3 trillion in earnings with 18 million
employees, while the non profit sectors contributes about $1.4 billion in revenue with 9.4
million employees and consists about 1.4 million organizations. The alliance between the three
sectors in carrying out social entrepreneurship has been credited to improve availability of jobs,
stimulate innovations and build wealth for the nation (Wolk, 2004, p.160).
Public Sectors
The public sector in support of social entrepreneurship is mentioned by Wolk (2004) to include
the following activities; 1) addressing inequalities in the markets by helping families living in
poverty by providing unemployment benefits and measurements for disaster assistance; 2)
providing public facilities such as policing, public defense, education and libraries to the most
needy in the society. In relation to market failure perspective, it seems complicated to define
the relationship between public sectors and social entrepreneurship as the services provided are
more than what the public is willing to pay for.
Social entrepreneurship distinctly addresses market failures since they are not profit oriented
and address the un-met public needs. The government role in re-distributing services to address
market failures is another way of contributing to social entrepreneurship. Its support of private
sectors in providing goods for the public helps address market inequalities and foster
environment for initiative development. Although a lot has been done to support these
initiatives, the government continues to face pressure in allocating resources to meet all the
societal needs (Wolk, 2004, p.161).
Non Profit Sectors
Non profit sectors have been traditionally known to engage in a variety of activities that support
social goals. Perfect examples of such organizations include private hospitals and schools,
religious organizations, and social service providers. Nonprofit sectors efforts in support social
activities are recognized when both private and public sectors have failed to meet particular
social needs and since they can not distribute the profits to their leaders, these sectors are placed
at a better position to use their revenues to sustain growth and grow their organizations.
Although they are by far the smallest sectors, nonprofit organization are known to be the fastest
growing organizations. In 1994 for example, the nonprofit organization were reported to have
doubled in number with almost 65 % growth rate which added up to 10.5% of the country’s
work force (Wolk, 2004, p.161).
Nicholls (2006) a scholar from Oxford university defines social entrepreneur to include both
multi-dimensional and dynamic construct of the economy rather than their organizational form.
All the three sectors play distinctive roles in resolving societal needs by ensuring public needs
are met. However, several trends have continued to emerge within the social entrepreneurship
spectrum bridging the gap between these sectors hence creating conducive environment for
social entrepreneurs to emerge and grow.
In private sectors for example, businesses and employees are increasingly engaging in activities
previously regarded as non-profitable as many have started engaging in educational and social
projects providing companies’ opportunity to offer services that could not have been considered
in the first place or regarded as government activities (Light, 2003). Osborne and Gaebler
(1993) journal reports states that, between 1999 and 2002, the U.S government reported to have
awarded about 700,000 contracts in federal funds to private enterprises and the public sectors
seem to have also shifted their focus from maximizing profits to engaging in social activities.
According to Goldsmith and Eggers (2004), the government engages in social enterprises by
offering opportunities to public enterprises to privatize their firms which call for business ethics
in turn promoting more competitive business environment. Private sectors have also increased
demand for efficiency and accountability and bridged the gaps in public sector delivery and
created public sector responsibility.
Goldsmith and his colleague also argue that social entrepreneurs have increased efficiency in
government funds as they only inject resources to market demands and increased preference
on issues ranging from public utilities to public schools. Government’s strategy of
monopolizing public sectors and reliance on private sectors in managing contracts and
allocating funds has greatly increased social responsibility and helped fill the gap in public
service delivery by ensuring the best services are provided (Goldsmith and Eggers, 2004).
Response to Market failures
As already discussed, social entrepreneurs characterized by their ethical skills are able to
identify to market failures and commit their resources to affect to the neediest in the society.
Because private sectors or even the government are unable to generate enough profits to
respond to these problems, these sectors bridge the gap by finding market opportunities and
maximizing their potential. Under normal circumstances, the government would try to address
the unmet needs by deploying public funds into the sectors, which has already been proven
futile in the long run. Social entrepreneurs in this case present viable options for addressing
market failures by seeking opportunities to create value rather than economical benefit.
Gregory Dees, founder of social entrepreneur argues that market approach to market
evaluations on social improvement do not adequately identify harms for people who cannot
afford to pay for the service and social entrepreneurs presence would distinctly cater for the
economy’s needs (Battle&Dees, 2006, p.160).
Social entrepreneurs insight exploration of societal problems have the ability to provide
transformational benefit that targets education and employment activities as well as the
marginalized areas that would have never been considered by the government. Wolk (2004)
categorizes market approaches into three broad perspectives that include; “no market approach,
limited market and low-profit market approach in targeting beneficiaries and responding to
market failures” (p.168).
He identifies no market approach as a social entrepreneurship strategy that offers products and
services to its potential beneficiaries without requesting for any payments. So this could mean
that the organization depends entirely on its own funding to sustain the initiatives. Limited
market approach on the other hand required beneficiaries to pay partial of the costs so sustain
the project activities, a common trend exhibited in non-profit organizations. He explains low-
profit market approach to require full payment of goods and services obtained as illustrated in
most private organizations that have the potential of generating profits (Wolk, 2004, p.168).
Transformative Innovations
Social entrepreneurs are described by many scholars as change agents, creating systematic
change by introducing new ideas and persuading others to adopt, changing social patterns that
create social problems through breaking patterns. In transformative perspective, Bill Drayton
defines social entrepreneurs as creative thinkers continuously striving for innovations.
Transformative ideas can be seen through the invention of new technologies, methods of
production, supply sources and distribution outlets and social entrepreneurs have for this case
taken these innovative approaches further by devising strategies that have benefited the whole
society (Ashoka, 2010). Social entrepreneur have been evidenced to combine their own
innovative skills, research obtained from public sources and political influence in attaining
their goals. Their ability to involve major players in the entrepreneurship activities character
sets them apart from the traditional profit oriented organizations (Wolk, 2004, p.20).
Financial Sustainability
Market analysts urge private organizations and business to should try and find a model that
responds to their unique characters of their social problem. Wolk (2004) statements stressed
organization to obtain their own financial sustainability that will cushion them through the hard
economic times and engage in social reality projects that prefer productivity and efficient
management of their resources. He argues that businesses that adopt this approach often report
good report results on organizational performance and cost benefit returns on investment.
These organizations are also required to integrated financial and programmatic initiatives into
business activities to effectively capture organization problems and maximize their profits
(Wolk, 2004, p.170).
Non-financial Resources
Non-financial resources also known as volunteers are social entrepreneurs deemed to posses
both skilled and unskilled education and may at one time rely on donations to increase the
sustainability of their initiatives. These volunteers engage in public activities that develop and
implement social solutions like the Hurricane Katrina volunteers that came out in large
numbers to complete intensely needed work in a way the government could have never afforded
by themselves (Wolk, 2004, p.171).
Social entrepreneurs in New York State
Social enterprise is a new breed of entrepreneurship that exhibits the characteristics of
innovation, risk taking and large-scale transformation. They have provided a fertile ground for
young and upcoming entrepreneurship growth by identifying present change in social
economic environment. On New York perspective, the practice of responding to market failures
with transformative, financially sustainable innovations aimed at solving societal issues is
advancing at pace that exceeds comfort zone causing the government to suffer substantial
losses in funding charitable organizations. Although there exist a variety of projects within the
New Yolk state that seems to address serious challenges faced by the society, local businessmen
and social entrepreneurs are called upon by the State’s comptroller to mobilize their efforts in
implementing solutions that will lower administrative burdens and improve state’s
accountability and oversight (Dinapoli, 2010, p.1).
Some of the State’s initiatives that include youth programs, education services and arts council
are currently being threatened by the economic downturn and social entrepreneurs are for this
case trusted to have the potential for transform the social innovations. Dinapoli (2010) gives
us a perfect example of a successful community-based initiatives that have helped stimulate
the economy by illustrating the 2006 human service organizations social entrepreneurship
initiative that reported revenues of $132.9 billion in over 24,000 NFPs and provided nearly 1.2
million jobs which contributes to about 17% of the States work force. While in June 2009, the
State was reported to have had 31,000 contractors with NFPs totaling to $14.6 billion (Dinapoli,
2010, p.1).
New York State has also been facing serious issues in regard to increased demand for goods
and services resulting to increase pressure on the State’s budget. For example, between 2008
and 2009, the State’s unemployment rates increased from 5.8% to 8.9% simultaneously and
rose from 6.0 % in 2008 to10.3% in 2009 in the New York City. The overwhelming numbers
of dependable people increased the number of people receiving food stamps by 17.5% between
January and October the same year. The State continues to struggle with program funding as
more households continue to seek assistance of all types.
Dinapoli (2010) mentions other States deficit that might have increased pressure on demand
for goods and services to include; the Home Energy Assistance Program (HEAP) increased
deficit of 36.3 percent between 2008 and 2009, the State’s budget deficit of $4.1billion for the
fiscal year 2009-2010, and the projected deficit of more than $23 billion expected to hit through
SFY between 2011 to 2011. Charitable activities have also reduced their contributions to social
activities and private corporations and philanthropic organizations no longer provide
significant funds to finance societal services (Dinapoli, 2010, p.2).
Contracts Delays and Late Payments
Quite a number of not for profit (NFPs) organizations receive funding from the State through
contract allocations. According to the Office of the State Comptroller (OSC) of New York State,
about 87% of state contracts in 2009 were reported to have been delayed as a result of the
economic downturn. These delays forced NFPs to perform activities without any payments
hence resulting to increased borrowing to finance their projects. Dinapoli (2010) reports
indicated that about 69% of NFPs resorted to borrowing due the delayed government contracts
and payments. This gap can be bridged by businesses involvement in community initiatives
that require social enterprise participation (Dinapoli, 2010, p.4).
Social entrepreneurs have been identified to present change in social economic environment
by engaging businesses in their activities. Social entrepreneurs for this case involve players
such as volunteers and not for profit organizations in meeting social needs. Some of the inherent
benefits of including community activities in social entrepreneurship include full utilization of
human resources, increased diversity which reduces intercultural conflicts among community
members, enhances work relationship based on mutual respect and increased knowledge of
multicultural issues. It is also argued that community involvement Increases commitment
among diverse cultures and across all functions, increases community participation in key-
decision making and problem solving and improves productivity and reduces energy spend in
solving cultural clashes (Chase, 2000, p. 12; Simons, 2000, p.4).).
It’s important for users, service providers, the community and the government to stay ahead of
the societal challenges. Policy makers in this case require the public to take active roles in
providing innovative ideas to handle these changes. Chase (2000) requires the integration
between society and the economy in evaluating societal needs and the attainment of certain
social and economic goals. Chase (2000) definitions of social entrepreneurship are not aimed
at describing functions of social entrepreneurs but rather as effective instruments for combating
social problems and vehicle for social cohesion.
He defines social entrepreneurs as nonprofit agencies that maximize their mission-related
performance through development of new ventures or by reorganizing existing activities to
improve operational effectiveness. For profit companies that are involved in social activities
can also be referred as social enterprises embedded in social purpose. Non profit can be linked
to a wide range of foundations, associated organizations and organizations that operate outside
the parameters of common markets (Chase, 2000, p.12).
Although little research has been done on nonprofit organization from social entrepreneurship
perspective, Wolk (2004) recognizes them as powerful tools that have revitalized otherwise
deprived areas, communities and localities and produced services that are not being produced
by mainstream commercial enterprises. Ashoka foundation illustrates a perfect example of
social entrepreneurs that have become leaders in social change by providing sources through
inter-sectoral resources without limiting themselves to traditional charitable models.
Social entrepreneurs and nonprofit organization seem to be categorized in the same model of
community service as they both possess common themes in addressing complex social needs
in effective and integrated ways and regenerating communities’ needs. Another common
characteristics exhibited in these two organizations includes their ability to recognize the
society’s need for an incubation period, allows new ventures to mature, undergo rigorous
ongoing assessment to maximize outcomes and identify needs, support and develop them
(Simons, 2000, p.4).
To understand how social entrepreneurs contribute to the society. Three factors keep
reoccurring throughout the essay. First, social entrepreneurs have a capacity to be a leader in
the social field change which is achieved by their ability to break social reforms and design
innovative programs. Second, their rigorous approach in maximizing societal changes and
outcomes. And third, their ability to take outstanding or emerging social problems. The ability
to collaborate, challenge and support community initiatives in reference to the community,
business and government activities achieves them higher in the society (Simons, 2000, p.4).
Challenges often faced by social enterprise are their inability to collaborate all the three sectors
into long-term and strategic objectives of innovation, research and capacity building. All the
three sectors are required to harness capacities of all sectors in order to realize sustainable
societal change. For instance, development in social activities requires collaboration of both
research and development funds. Their aim is to provide resources that can be adopted into
different communities and service providers that will adapt rapidly to changing political, social
and funding environment. Research is also needed as means of investment in promoting good
practice and development of good policy (Simons, 2000, p.4).
Nonprofit organizations and social enterprises continue to seek solutions to social problems by
providing easy to interpret results. Their initiatives translate changing latent needs into explicit
demands, provide innovative goods and services by developing or running the local or
interregional networks, integrating human and financial services for mutual benefit. Just as
traditional enterprises are critical to such areas such as industry and technology, social
entrepreneurs are as well critical to areas of human needs such as health, environment, young
people, and revitalizing communities.
They transform the community by generating initiative approaches to needy private and public
sectors as well as nonprofit sectors (Wolk, 2004). Until corporations are willing to be
strategically involved in funding, designing and implementing community based programs,
corporate donations will still be necessary. Corporate should also work with volunteers in
implement positive and productive community initiatives. Although research in this essay keep
shifting from charitable activities to social entrepreneurship, its important to note that social
entrepreneurs still serve as seedbeds for innovations (Simons, 2000, p.1).
Adaptation of social entrepreneur initiatives into the community has however not been without
challenges. Providing leadership in a dynamic community often receives resistance in
adaptation and the sufferers are always the needy society members. Cooperation between
economic and social players, including government funding welfare programs should be
encouraged since they are the main reason for the growth of social enterprise.
Social entrepreneur have the ability to enhance their research capacity by strategizing in
research alliances and partnering with communities and government to ensure accurate
identification of problems and appropriate provision of resources. One best activity obtained
from social entrepreneurs should be combined community development and business skills to
ensure continued developments. The type of interventions emerging from social enterprise
model should focus on measures of community social capacity rather than concentrating on
profit motives (Simons, 2000, p.3).
Government Support for Social Entrepreneurs
Social entrepreneurs help in testing and developing promising solutions and compliment
governments role in addressing market failures that benefit the citizens. Billy shore founder of
Share Our Strength pointed out that social entrepreneurs create a pipeline for the government,
they take more risks and do things the government cannot do since they are closer to people.
Social entrepreneurship have added value to the community research and addressed major
micro-dimensions in the society that could otherwise have been ignored.
Their approach has also helped the government recognize the compatibility of their approach
in informing and influencing social policy according to emerging models hence improving
relationship between themselves and non-governmental organizations. Social entrepreneurs are
hoped for benefits, develop skills in anticipation and responding to those most at risk, and
enhance the ability to broker evidence based policy development.
They develop close to the grassroots, they interpret and anticipate the needs of most vulnerable
groups and further their integration into social and professional life. They can be hotbeds for
ideas and experiments. After they identify new and emerging demands, they present their ideas
to the public sector decision makers through their partnership with them. Their ethical approach
to new ideas adds extra value to production of goods and services to the society and decrease
administrative burdens (Wolk, 2004, p.188).
Building capacity for societal change and fostering the social innovation requires deliberate
strategies to foster the development of social enterprise and social entrepreneurs who drive
them. Having collected qualitative data from the government, social entrepreneurs are in a
better position to become brokers of evidence based policy development. They have a wealth
of knowledge and wisdom based on experience with the disadvantaged that can facilitate the
adoption of innovative policies at the central, regional and local governments. They facilitate
the community greater sense of partnership into the markets generated wealth, unlocking
opportunities and encourage community participation into policy making process (Wolk, 2004,
p.188).
Successful implementation of social entrepreneurship skills relies upon the active participation
of the three sectors which includes the government, business and community focused activities.
Social entrepreneurs for this case are required to remain alert to any for strategic alliance with
other segments of society that would help realize their dreams. Their main objective of the
strategic alliances is to facilitate the initiation and maintenance of relations across sectors and
help realize key outcomes, combating social exclusion, promotion of social cohesion and
unlocking opportunities for constructive participation.
They also act as outcomes measurements and provide reference points for the development of
benchmarks to assess ongoing and planned activities. Responding to the disadvantaged
simultaneously requires working for societal change for effective and sustainable outcomes. It
considers taking what is considered risky to provide joint leadership in working with others for
more a cohesive society (Wolk, 2004, p.189).
Social entrepreneurs are best known to leverage both public and private sectors, and test and
develop solutions. As evident from research gathered around the globe, the United States
government lacks strategic measures to help address the country’s social problems. The
government however has over the years tried supporting social entrepreneurs through creating
enabling environment for social entrepreneurial initiatives, rewarding initiatives for
performing, encouraging social innovation, scaling initiative success and producing knowledge
that enhances social entrepreneur efforts (Wolk, 2004, p.189).
Launching new initiatives in the markets may be a challenging task for social entrepreneurs.
To help them endure trials of the start up phase, many foundations such as Echoing Green and
Ashoka have been set up to provide support for early organizational development. Various
academic programs that sponsor competition and awards have also stepped up to encourage
social innovation and foundation of new initiatives.
The government should in this case follow this approach by taking proactive roles in
encouraging social innovation by acting as seedbeds in supporting their initiatives mostly in
the start-up phases. For example, the ITNAmerica would not have achieved its goals without
the federal monetary support. The Transit IDEA program sponsored by the Transport Research
Board benefited the public by providing feasibility study that enabled the foundation explore
senior citizens consumer behavior related to fee-based automobile transport services and
helped the foundation explore innovative payment plans and information system technology
(Wolk, 2004, p.189).
Social entrepreneurs often experience barriers addressing social problems, and the government
should in this case help by creating an enabling environment through removing barriers,
supporting collaboration and lending credibility. Existing laws and policy changes can act as
barrier for social innovation and the government should shift its focus from bureaucratic rules
and allow social cohesion and sustainable development. The government ca also show support
by rewarding performance. Howard Husock, the director of the Manhattan Institute Social
entrepreneurship Initiative points out in Wolk (2004) that “social entrepreneurs want access to
reliable sources of financing that recognize performance” (p.191).
Therefore the government can step up by supporting their initiatives through performance-
based rewards and by funding and purchasing their products and services. For example, the
RSVP’s initiative of reducing recidivism among criminal offenders, San Francisco city
managers continued funding RSVP line item long after grand funding ran out. Another example
is illustrated in Arkenstone Reading Machine that was purchased by U.S. Department of
Veterans Affair (VA) hospitals (Wolk, 2004, p.192).
Most societal innovations rely on published information provided by the government in helping
them find the target social problems and identify how many people are affected. Available
research data, funds evaluation that provide critical information documented by the
government helps in identifying problems and compare various interventions against standard
for success for those working towards solving social problems. Some of the initiatives that have
relied on government‘s data include KaBOOM and Benetech in understanding the nature of
the social problem.
For example, the federal funded ITNAmerica financed transport services that revealed the
safety concerns for older drivers that have become essential for citizens. Consensus data
provided by the government also helped social entrepreneurs predict the growing size of
American population that allowed program planning. Social entrepreneurs use government
reports to initiate projects, development and start up similar programs around the country. In
overall, government data is important in identifying social problems, setting standards and
gauging success (Wolk, 2004, p.196).
Conclusion
Research obtained from this essay argues that collaboration of any strategic plans in support of
the social entrepreneurship is particularly important to policy makers. Collaboration of
community members and the government in social entrepreneurship should therefore be
encouraged as it has seen to influence social entrepreneurship growth in the recent years.
Integration of business models and government initiative roles in utilizing market innovation
and productivity in responding to market failures, providing goods and services will decrease
administrative burdens, create transformative solutions and financial sustainable innovations
aimed at solving social problem.
The government on the other hand should shift its focus of bureaucratic rules and concentrate
on entrepreneurship innovations that provided a fertile ground for growth. In reducing New
York State’s deficit, the government should standardize contracts, make timely payments,
prioritize state funding and encourage financial support. Since social entrepreneurs facilitate
the community greater sense of partnership into the markets generated wealth, unlocking
opportunities that would have otherwise been ignored and includes community input into the
policy making process, public and private sectors partnership should always be encouraged in
order to develop solutions.
Organizations on the other hand should integrated financial and programmatic initiatives into
business activities to effectively capture organization problems and maximize their profits.
Incorporating new ideas from experts in the field of social entrepreneurship provides a fertile
ground for young and upcoming entrepreneurship growth by identifying present change in a
social economic environment. In evaluating the benefits of social entrepreneurs in our society,
it’s important for the government to award their efforts through sponsorship, purchase of their
products, prize awards and providing necessary research to facilitate their innovations.
Although there exist a variety of projects within the New Yolk state that seems to address
serious challenges faced by the society, local businessmen and social entrepreneurs are called
upon by the to mobilize their efforts in implementing solutions that will lower administrative
burdens and improve state’s accountability and lives of the local citizens. Since the process of
social entrepreneurship and its strategic goals for improving social welfare of the society
requires collaboration of different sectors across the economy, public, private and the
community enterprises should work in unity to help facilitate the initiation and maintenance of
innovative activities.
Social Entrepreneurs
Ashoka (2010) describes social entrepreneurs to be “people with ambitious and persistence
skills in tackling major social issues that offer new ideas for wide-scale change”(p.1). They
take proactive approaches in trying to change the system and provide solutions to societal
problems by mobilizing the entire society to take the leaps. Their initiatives focus on solving
the societal issues rather than leaving the issues to the government or business sectors. He also
defines them as mass recruiters with ethical skills and have the ability to mobilize people to
stand up for their ideas and implement them.
Social entrepreneurship use market-driven business model in addressing key environmental
issues and critical social needs. They take full responsibility of their project initiatives as they
don’t rely on government shifting focus. Ashoka (2010) also states that these kind of
entrepreneurs “ have the ability to grow to meet needs and priorities of the communities it
serves, as opposed to public sector limited to funds provided by the government” (p.1).
His definitions fits bigger concept of societal innovations as it broadly describes them as
entrepreneurs who provides solutions that are effective, efficient and sustainable to solve the
society social problems. The definitions are not limited to enterprise based approaches to
solving critical issues but also a social enterprise for social innovation. It should however be
noted that social enterprise is not about balancing the double standards of profit and social
impact but to obtain community sustainment projects (Ashoka, 2010).
Despite minimum support from the government and local volunteers, there seems to be general
agreement among the supporters of social entrepreneurship as to its key underlying goals and
their consequences for societal change. Social entrepreneurship innovative and interpretive
approach to societal problem has gained world wide recognition mainly from media houses
and policy makers, as a significant contributor to a country’s economy and to represent
distinctive part of the country’s social and economic activities.
These supporters deem to be building a perfect example of government and corporate bodies’
involvement in social activities. The United States government for example government
supports social entrepreneurs by allocating about $1 trillion every year to federal funds
dedicated to solving social issues. The monetary support may not be enough in the long run
since these organizations always desire for capital to develop their activities. Wolk (2004,
p.151) in his statement argues the government to form an alliance with social entrepreneurs to
generate transformative and cost-effective solutions to the most challenging social problems.
Incorporating new ideas from experts in the field of social entrepreneurship provides a fertile
ground for young and upcoming entrepreneurship growth by identifying present change in a
social economic environment. In evaluating the benefits of social entrepreneurs in our society,
it’s important to determine who social entrepreneurs are, how they benefit the government as
well as private and public businesses and what the government is doing to support them
(Simons, 2000, p.4).
The emergence of social entrepreneurs
Since the focus here is on the how social entrepreneurs has influenced the economy and
provided solutions to societal problems, three stages of responding to societal needs can be
identified. These stages, which correspond very closely with Roger and Osberg (2007, p.30)
include; a) market failures b) transformative innovations and; 3) financial sustainability. To
determine how social entrepreneur emerged as nexus from these factors, it’s important to
establish how it helped the government and improved the lives of public official constituents.
Although different aspects of social entrepreneur appear in all parts of the essay, case examples
illustrated throughout the paper help us understand how social entrepreneurship leverage public
and private resources, test and implement solutions to social by highlighting a number of
successful social entrepreneur initiatives (Wolk 2004, p156).
It was also realized that the triangulation of three sectors of the economy that consisted of the
government, private and public sectors acts as viable transport for innovation. However, there
appears to be a particular issue with regard to collaboration between social entrepreneurs and
the government. Their relationship has proven elusive and largely fruitless in resolving social
problems, transforming and implementing financially stable solutions. In order to enhance
functional relationship between these sectors, Martin and Osberg (2007, p.30) proposes for a
more rigorous approach of government involvement in social entrepreneurship that would later
boosted the economy (Martin& Osberg, 2007).
It’s quite unfortunate that the government has made little efforts in support of social-
entrepreneur initiatives. There has been growing consensus about government involvement in
social entrepreneurship initiatives with many speculating on their significant contribution.
Wolk (2004) mentions some of the strategies government has put in place in support of social
entrepreneur innovative and interpretive approach to include; 1) helping heighten their success
2) reward their performance 3) create supportive environment for innovation 4) encourage
them to innovate and; 5) offer knowledge through published reports and data to help them solve
problems (Wolk, 2004, p157).
History of Social entrepreneurship
According to Organization for Economic Co-Operation and Development (2006), quite a
majority of Americans live in poverty with about one quarter of the adults failing to complete
high school. The country’s health sector was also reported to have ranked 37 in the world’s
health review which was equivalent to status of a developing nation. These declines in both
economic and health sectors has increased the need for social entrepreneurship and its promises
as a means of addressing daunting social needs. Given the magnitude of needs the economy
has, the U.S government for this case is required to inject large sources of funds from federal
reserves, local government and the state to help solve these problems.
In attempting to fill this gap, Wolk (2004, p.155) proposes that the government should look
into the social entrepreneurship assistance for now ideas. He adds that the collaboration
between the two sectors will effectively identify societal needs and provide viable solutions to
the problems. His proposal throughout the essay attempts to define what social entrepreneur is
based on case studies and expert ideas and breaks the new ground in exploring new ways in
which government leaders as well as other constituents are benefiting from their efforts.
In today’s dynamic economy, there’s nothing as powerful as new ideas. Shoka (2010) quotes
more historical examples of social entrepreneurs to include “Susan B. Anthony (U.S.): Fought
for Women’s Rights in the United States, including the right to control property and helped
spearhead adoption of the 19th amendment” (p.1). He also mentions Vinaba Bhave founder of
the Land Gift Movement and the Italian social entrepreneur Dr. Maria Montessori founder of
Early Childhood Education among others (Ashoka, 2010).
In 2007, President George W. Bush acknowledged a variety of social entrepreneurs who have
helped the American society achieve a competitive age. Among the honored guests were Julie
Aigner-Clarke, founder of the Children Video Company and Baby Einstein producer of the
Child Safety Video. In his statement, president Bush (2007) acknowledged Julie’s efforts by
stating that
Julie represents the great enterprising spirit of America. And she is using her success to help
others….we are please to welcome this talented business entrepreneur and generous social
entrepreneur (p.1).
The president’s exploration of creative tasks delineateb by social entrepreneurs towards
community development applauded their efforts in responding to market failures, creating
transformative and financially sustainable innovations aimed at solving social problems.
Popular media has not been left behind on recognizing social entrepreneurs in our society. A
variety of media personalities for example have tried to redefined the term social
entrepreneurship to a greater household name. The Economists, Harvard Business Review, The
New York times among others have echoed this sentiment in an attempt to assess social
entrepreneurship achievements by publicizing their efforts.
According to Schumpeter (1982), markets exhibit a range of entrepreneur characteristics that
include innovative, risk-taking and large scale transformation. People deemed to possess these
characteristics were recognized in the 2006 U.S News and World Report to include Wendy
Kopp, founder of Teach For America, Michael Brown and Ali Khazei, founder of City Year
among others. Also included in the category were Grameen Bank, a Nobel Peace Winner,
Victoria Hale, founder of OneWorld Health Institute and Jim Fructerman from the MacArthur
Foundation (Wolk, 2004, 6).
Some historic examples of social innovators that changed the American social landscape are
also mentioned by Wolk (2004) to include Florence Nightingale of the 1800s foundation of the
modern field of nursing and Horace Mann, founder of public education. Wolk (2004) studies
argue that a social entrepreneur represent a distinctive part of a country’ social and economic
life and the United Stated for this case has gained tremendously. American entrepreneurship
can be traced within the context of changes that have taken place since 1980s.
The first entrepreneur recognized during that time was Edward Skloot who founded a non profit
consulting firm interested in creating business ventures. His work was published in Harvard
Business Review in 1983 as “nonprofit entrepreneurship” (Skloot, 1983, p.22) as a description
of business ventures that diversify nonprofit organization funding streams. Bill Drayton
founder of Ashoka came into play in 1981 as an Innovator for the Public to seek, support and
publicize public entrepreneurs. Pater Drucker of the management expert book was recognized
in 1985 among the first entrepreneurs to describe a phenomenon that extended into multiple
sectors (Battle& Dees, 2006, p.150).
Towards the mid 1990s social entrepreneurs began to gain new meaning as many scholars and
presses described them as anyone who started a nonprofit organization, or any business man
who integrated social responsibility into their operations. Here, social entrepreneurship is
described broadly to include a variety of organization structures and activities within the social
entrepreneurship context. Wolk (2004) argues here that social entrepreneurship stems from
initiatives that tend to exhibit the characteristics of innovations and risk taking.
He mentions various examples of social innovators throughout his research in illustrating how
entrepreneur initiatives act as seedbeds for development for non profit organizations, for profit
organizations and rather government programs. For this reason, it’s important to explain the
threes sectors in both social and economic perspective of an American economy by describe
their specific roles and responsibilities of in social entrepreneurship.. Below is an illustrated of
how social entrepreneurs have benefited the society within the context of public, private and
voluntary organizations and a description of trends that have eliminated the boundaries
between these sectors (Wolk, 2004, p.158).
Private Sector
Building capacity for societal change and fostering the social innovation requires full
participation of private and public sectors as well as voluntary organizations. A private sector
is defined by Wolk (2004) as “organization that incorporates activities of small business,
corporation and enterprises in utilizing market exchange for goods and services while
maximizing their profits” (p.158). Their strategies to foster development of social enterprises
and social entrepreneurship drive innovation and productivity into the economy.
Economists have long identified innovation as one of the major contributors to private sectors.
A former 1900s scholar Joseph Schumer once commended in Milton (1982) that “Further
contemporary economist Milton Friedman has argued that free markets, competition, and
consumer choices are also essential components of capitalism” (p.50). According to Wolk
(2004) reports, private sectors in the U.S economy represent approximately $13 trillion a year
in gross domestic product ranking the country top among the world’s largest economy.
This sector is also reported to be the major contributor to the country’s work force with 115
million employees currently working in private organizations. The public sector on the other
hand consists of about 87,900 government units with $4.3 trillion in earnings with 18 million
employees, while the non profit sectors contributes about $1.4 billion in revenue with 9.4
million employees and consists about 1.4 million organizations. The alliance between the three
sectors in carrying out social entrepreneurship has been credited to improve availability of jobs,
stimulate innovations and build wealth for the nation (Wolk, 2004, p.160).
Public Sectors
The public sector in support of social entrepreneurship is mentioned by Wolk (2004) to include
the following activities; 1) addressing inequalities in the markets by helping families living in
poverty by providing unemployment benefits and measurements for disaster assistance; 2)
providing public facilities such as policing, public defense, education and libraries to the most
needy in the society. In relation to market failure perspective, it seems complicated to define
the relationship between public sectors and social entrepreneurship as the services provided are
more than what the public is willing to pay for.
Social entrepreneurship distinctly addresses market failures since they are not profit oriented
and address the un-met public needs. The government role in re-distributing services to address
market failures is another way of contributing to social entrepreneurship. Its support of private
sectors in providing goods for the public helps address market inequalities and foster
environment for initiative development. Although a lot has been done to support these
initiatives, the government continues to face pressure in allocating resources to meet all the
societal needs (Wolk, 2004, p.161).
Non Profit Sectors
Non profit sectors have been traditionally known to engage in a variety of activities that support
social goals. Perfect examples of such organizations include private hospitals and schools,
religious organizations, and social service providers. Nonprofit sectors efforts in support social
activities are recognized when both private and public sectors have failed to meet particular
social needs and since they can not distribute the profits to their leaders, these sectors are placed
at a better position to use their revenues to sustain growth and grow their organizations.
Although they are by far the smallest sectors, nonprofit organization are known to be the fastest
growing organizations. In 1994 for example, the nonprofit organization were reported to have
doubled in number with almost 65 % growth rate which added up to 10.5% of the country’s
work force (Wolk, 2004, p.161).
Nicholls (2006) a scholar from Oxford university defines social entrepreneur to include both
multi-dimensional and dynamic construct of the economy rather than their organizational form.
All the three sectors play distinctive roles in resolving societal needs by ensuring public needs
are met. However, several trends have continued to emerge within the social entrepreneurship
spectrum bridging the gap between these sectors hence creating conducive environment for
social entrepreneurs to emerge and grow.
In private sectors for example, businesses and employees are increasingly engaging in activities
previously regarded as non-profitable as many have started engaging in educational and social
projects providing companies’ opportunity to offer services that could not have been considered
in the first place or regarded as government activities (Light, 2003). Osborne and Gaebler
(1993) journal reports states that, between 1999 and 2002, the U.S government reported to have
awarded about 700,000 contracts in federal funds to private enterprises and the public sectors
seem to have also shifted their focus from maximizing profits to engaging in social activities.
According to Goldsmith and Eggers (2004), the government engages in social enterprises by
offering opportunities to public enterprises to privatize their firms which call for business ethics
in turn promoting more competitive business environment. Private sectors have also increased
demand for efficiency and accountability and bridged the gaps in public sector delivery and
created public sector responsibility.
Goldsmith and his colleague also argue that social entrepreneurs have increased efficiency in
government funds as they only inject resources to market demands and increased preference
on issues ranging from public utilities to public schools. Government’s strategy of
monopolizing public sectors and reliance on private sectors in managing contracts and
allocating funds has greatly increased social responsibility and helped fill the gap in public
service delivery by ensuring the best services are provided (Goldsmith and Eggers, 2004).
Response to Market failures
As already discussed, social entrepreneurs characterized by their ethical skills are able to
identify to market failures and commit their resources to affect to the neediest in the society.
Because private sectors or even the government are unable to generate enough profits to
respond to these problems, these sectors bridge the gap by finding market opportunities and
maximizing their potential. Under normal circumstances, the government would try to address
the unmet needs by deploying public funds into the sectors, which has already been proven
futile in the long run. Social entrepreneurs in this case present viable options for addressing
market failures by seeking opportunities to create value rather than economical benefit.
Gregory Dees, founder of social entrepreneur argues that market approach to market
evaluations on social improvement do not adequately identify harms for people who cannot
afford to pay for the service and social entrepreneurs presence would distinctly cater for the
economy’s needs (Battle&Dees, 2006, p.160).
Social entrepreneurs insight exploration of societal problems have the ability to provide
transformational benefit that targets education and employment activities as well as the
marginalized areas that would have never been considered by the government. Wolk (2004)
categorizes market approaches into three broad perspectives that include; “no market approach,
limited market and low-profit market approach in targeting beneficiaries and responding to
market failures” (p.168).
He identifies no market approach as a social entrepreneurship strategy that offers products and
services to its potential beneficiaries without requesting for any payments. So this could mean
that the organization depends entirely on its own funding to sustain the initiatives. Limited
market approach on the other hand required beneficiaries to pay partial of the costs so sustain
the project activities, a common trend exhibited in non-profit organizations. He explains low-
profit market approach to require full payment of goods and services obtained as illustrated in
most private organizations that have the potential of generating profits (Wolk, 2004, p.168).
Transformative Innovations
Social entrepreneurs are described by many scholars as change agents, creating systematic
change by introducing new ideas and persuading others to adopt, changing social patterns that
create social problems through breaking patterns. In transformative perspective, Bill Drayton
defines social entrepreneurs as creative thinkers continuously striving for innovations.
Transformative ideas can be seen through the invention of new technologies, methods of
production, supply sources and distribution outlets and social entrepreneurs have for this case
taken these innovative approaches further by devising strategies that have benefited the whole
society (Ashoka, 2010). Social entrepreneur have been evidenced to combine their own
innovative skills, research obtained from public sources and political influence in attaining
their goals. Their ability to involve major players in the entrepreneurship activities character
sets them apart from the traditional profit oriented organizations (Wolk, 2004, p.20).
Financial Sustainability
Market analysts urge private organizations and business to should try and find a model that
responds to their unique characters of their social problem. Wolk (2004) statements stressed
organization to obtain their own financial sustainability that will cushion them through the hard
economic times and engage in social reality projects that prefer productivity and efficient
management of their resources. He argues that businesses that adopt this approach often report
good report results on organizational performance and cost benefit returns on investment.
These organizations are also required to integrated financial and programmatic initiatives into
business activities to effectively capture organization problems and maximize their profits
(Wolk, 2004, p.170).
Non-financial Resources
Non-financial resources also known as volunteers are social entrepreneurs deemed to posses
both skilled and unskilled education and may at one time rely on donations to increase the
sustainability of their initiatives. These volunteers engage in public activities that develop and
implement social solutions like the Hurricane Katrina volunteers that came out in large
numbers to complete intensely needed work in a way the government could have never afforded
by themselves (Wolk, 2004, p.171).
Social entrepreneurs in New York State
Social enterprise is a new breed of entrepreneurship that exhibits the characteristics of
innovation, risk taking and large-scale transformation. They have provided a fertile ground for
young and upcoming entrepreneurship growth by identifying present change in social
economic environment. On New York perspective, the practice of responding to market failures
with transformative, financially sustainable innovations aimed at solving societal issues is
advancing at pace that exceeds comfort zone causing the government to suffer substantial
losses in funding charitable organizations. Although there exist a variety of projects within the
New Yolk state that seems to address serious challenges faced by the society, local businessmen
and social entrepreneurs are called upon by the State’s comptroller to mobilize their efforts in
implementing solutions that will lower administrative burdens and improve state’s
accountability and oversight (Dinapoli, 2010, p.1).
Some of the State’s initiatives that include youth programs, education services and arts council
are currently being threatened by the economic downturn and social entrepreneurs are for this
case trusted to have the potential for transform the social innovations. Dinapoli (2010) gives
us a perfect example of a successful community-based initiatives that have helped stimulate
the economy by illustrating the 2006 human service organizations social entrepreneurship
initiative that reported revenues of $132.9 billion in over 24,000 NFPs and provided nearly 1.2
million jobs which contributes to about 17% of the States work force. While in June 2009, the
State was reported to have had 31,000 contractors with NFPs totaling to $14.6 billion (Dinapoli,
2010, p.1).
New York State has also been facing serious issues in regard to increased demand for goods
and services resulting to increase pressure on the State’s budget. For example, between 2008
and 2009, the State’s unemployment rates increased from 5.8% to 8.9% simultaneously and
rose from 6.0 % in 2008 to10.3% in 2009 in the New York City. The overwhelming numbers
of dependable people increased the number of people receiving food stamps by 17.5% between
January and October the same year. The State continues to struggle with program funding as
more households continue to seek assistance of all types.
Dinapoli (2010) mentions other States deficit that might have increased pressure on demand
for goods and services to include; the Home Energy Assistance Program (HEAP) increased
deficit of 36.3 percent between 2008 and 2009, the State’s budget deficit of $4.1billion for the
fiscal year 2009-2010, and the projected deficit of more than $23 billion expected to hit through
SFY between 2011 to 2011. Charitable activities have also reduced their contributions to social
activities and private corporations and philanthropic organizations no longer provide
significant funds to finance societal services (Dinapoli, 2010, p.2).
Contracts Delays and Late Payments
Quite a number of not for profit (NFPs) organizations receive funding from the State through
contract allocations. According to the Office of the State Comptroller (OSC) of New York State,
about 87% of state contracts in 2009 were reported to have been delayed as a result of the
economic downturn. These delays forced NFPs to perform activities without any payments
hence resulting to increased borrowing to finance their projects. Dinapoli (2010) reports
indicated that about 69% of NFPs resorted to borrowing due the delayed government contracts
and payments. This gap can be bridged by businesses involvement in community initiatives
that require social enterprise participation (Dinapoli, 2010, p.4).
Social entrepreneurs have been identified to present change in social economic environment
by engaging businesses in their activities. Social entrepreneurs for this case involve players
such as volunteers and not for profit organizations in meeting social needs. Some of the inherent
benefits of including community activities in social entrepreneurship include full utilization of
human resources, increased diversity which reduces intercultural conflicts among community
members, enhances work relationship based on mutual respect and increased knowledge of
multicultural issues. It is also argued that community involvement Increases commitment
among diverse cultures and across all functions, increases community participation in key-
decision making and problem solving and improves productivity and reduces energy spend in
solving cultural clashes (Chase, 2000, p. 12; Simons, 2000, p.4).).
It’s important for users, service providers, the community and the government to stay ahead of
the societal challenges. Policy makers in this case require the public to take active roles in
providing innovative ideas to handle these changes. Chase (2000) requires the integration
between society and the economy in evaluating societal needs and the attainment of certain
social and economic goals. Chase (2000) definitions of social entrepreneurship are not aimed
at describing functions of social entrepreneurs but rather as effective instruments for combating
social problems and vehicle for social cohesion.
He defines social entrepreneurs as nonprofit agencies that maximize their mission-related
performance through development of new ventures or by reorganizing existing activities to
improve operational effectiveness. For profit companies that are involved in social activities
can also be referred as social enterprises embedded in social purpose. Non profit can be linked
to a wide range of foundations, associated organizations and organizations that operate outside
the parameters of common markets (Chase, 2000, p.12).
Although little research has been done on nonprofit organization from social entrepreneurship
perspective, Wolk (2004) recognizes them as powerful tools that have revitalized otherwise
deprived areas, communities and localities and produced services that are not being produced
by mainstream commercial enterprises. Ashoka foundation illustrates a perfect example of
social entrepreneurs that have become leaders in social change by providing sources through
inter-sectoral resources without limiting themselves to traditional charitable models.
Social entrepreneurs and nonprofit organization seem to be categorized in the same model of
community service as they both possess common themes in addressing complex social needs
in effective and integrated ways and regenerating communities’ needs. Another common
characteristics exhibited in these two organizations includes their ability to recognize the
society’s need for an incubation period, allows new ventures to mature, undergo rigorous
ongoing assessment to maximize outcomes and identify needs, support and develop them
(Simons, 2000, p.4).
To understand how social entrepreneurs contribute to the society. Three factors keep
reoccurring throughout the essay. First, social entrepreneurs have a capacity to be a leader in
the social field change which is achieved by their ability to break social reforms and design
innovative programs. Second, their rigorous approach in maximizing societal changes and
outcomes. And third, their ability to take outstanding or emerging social problems. The ability
to collaborate, challenge and support community initiatives in reference to the community,
business and government activities achieves them higher in the society (Simons, 2000, p.4).
Challenges often faced by social enterprise are their inability to collaborate all the three sectors
into long-term and strategic objectives of innovation, research and capacity building. All the
three sectors are required to harness capacities of all sectors in order to realize sustainable
societal change. For instance, development in social activities requires collaboration of both
research and development funds. Their aim is to provide resources that can be adopted into
different communities and service providers that will adapt rapidly to changing political, social
and funding environment. Research is also needed as means of investment in promoting good
practice and development of good policy (Simons, 2000, p.4).
Nonprofit organizations and social enterprises continue to seek solutions to social problems by
providing easy to interpret results. Their initiatives translate changing latent needs into explicit
demands, provide innovative goods and services by developing or running the local or
interregional networks, integrating human and financial services for mutual benefit. Just as
traditional enterprises are critical to such areas such as industry and technology, social
entrepreneurs are as well critical to areas of human needs such as health, environment, young
people, and revitalizing communities.
They transform the community by generating initiative approaches to needy private and public
sectors as well as nonprofit sectors (Wolk, 2004). Until corporations are willing to be
strategically involved in funding, designing and implementing community based programs,
corporate donations will still be necessary. Corporate should also work with volunteers in
implement positive and productive community initiatives. Although research in this essay keep
shifting from charitable activities to social entrepreneurship, its important to note that social
entrepreneurs still serve as seedbeds for innovations (Simons, 2000, p.1).
Adaptation of social entrepreneur initiatives into the community has however not been without
challenges. Providing leadership in a dynamic community often receives resistance in
adaptation and the sufferers are always the needy society members. Cooperation between
economic and social players, including government funding welfare programs should be
encouraged since they are the main reason for the growth of social enterprise.
Social entrepreneur have the ability to enhance their research capacity by strategizing in
research alliances and partnering with communities and government to ensure accurate
identification of problems and appropriate provision of resources. One best activity obtained
from social entrepreneurs should be combined community development and business skills to
ensure continued developments. The type of interventions emerging from social enterprise
model should focus on measures of community social capacity rather than concentrating on
profit motives (Simons, 2000, p.3).
Government Support for Social Entrepreneurs
Social entrepreneurs help in testing and developing promising solutions and compliment
governments role in addressing market failures that benefit the citizens. Billy shore founder of
Share Our Strength pointed out that social entrepreneurs create a pipeline for the government,
they take more risks and do things the government cannot do since they are closer to people.
Social entrepreneurship have added value to the community research and addressed major
micro-dimensions in the society that could otherwise have been ignored.
Their approach has also helped the government recognize the compatibility of their approach
in informing and influencing social policy according to emerging models hence improving
relationship between themselves and non-governmental organizations. Social entrepreneurs are
hoped for benefits, develop skills in anticipation and responding to those most at risk, and
enhance the ability to broker evidence based policy development.
They develop close to the grassroots, they interpret and anticipate the needs of most vulnerable
groups and further their integration into social and professional life. They can be hotbeds for
ideas and experiments. After they identify new and emerging demands, they present their ideas
to the public sector decision makers through their partnership with them. Their ethical approach
to new ideas adds extra value to production of goods and services to the society and decrease
administrative burdens (Wolk, 2004, p.188).
Building capacity for societal change and fostering the social innovation requires deliberate
strategies to foster the development of social enterprise and social entrepreneurs who drive
them. Having collected qualitative data from the government, social entrepreneurs are in a
better position to become brokers of evidence based policy development. They have a wealth
of knowledge and wisdom based on experience with the disadvantaged that can facilitate the
adoption of innovative policies at the central, regional and local governments. They facilitate
the community greater sense of partnership into the markets generated wealth, unlocking
opportunities and encourage community participation into policy making process (Wolk, 2004,
p.188).
Successful implementation of social entrepreneurship skills relies upon the active participation
of the three sectors which includes the government, business and community focused activities.
Social entrepreneurs for this case are required to remain alert to any for strategic alliance with
other segments of society that would help realize their dreams. Their main objective of the
strategic alliances is to facilitate the initiation and maintenance of relations across sectors and
help realize key outcomes, combating social exclusion, promotion of social cohesion and
unlocking opportunities for constructive participation.
They also act as outcomes measurements and provide reference points for the development of
benchmarks to assess ongoing and planned activities. Responding to the disadvantaged
simultaneously requires working for societal change for effective and sustainable outcomes. It
considers taking what is considered risky to provide joint leadership in working with others for
more a cohesive society (Wolk, 2004, p.189).
Social entrepreneurs are best known to leverage both public and private sectors, and test and
develop solutions. As evident from research gathered around the globe, the United States
government lacks strategic measures to help address the country’s social problems. The
government however has over the years tried supporting social entrepreneurs through creating
enabling environment for social entrepreneurial initiatives, rewarding initiatives for
performing, encouraging social innovation, scaling initiative success and producing knowledge
that enhances social entrepreneur efforts (Wolk, 2004, p.189).
Launching new initiatives in the markets may be a challenging task for social entrepreneurs.
To help them endure trials of the start up phase, many foundations such as Echoing Green and
Ashoka have been set up to provide support for early organizational development. Various
academic programs that sponsor competition and awards have also stepped up to encourage
social innovation and foundation of new initiatives.
The government should in this case follow this approach by taking proactive roles in
encouraging social innovation by acting as seedbeds in supporting their initiatives mostly in
the start-up phases. For example, the ITNAmerica would not have achieved its goals without
the federal monetary support. The Transit IDEA program sponsored by the Transport Research
Board benefited the public by providing feasibility study that enabled the foundation explore
senior citizens consumer behavior related to fee-based automobile transport services and
helped the foundation explore innovative payment plans and information system technology
(Wolk, 2004, p.189).
Social entrepreneurs often experience barriers addressing social problems, and the government
should in this case help by creating an enabling environment through removing barriers,
supporting collaboration and lending credibility. Existing laws and policy changes can act as
barrier for social innovation and the government should shift its focus from bureaucratic rules
and allow social cohesion and sustainable development. The government ca also show support
by rewarding performance. Howard Husock, the director of the Manhattan Institute Social
entrepreneurship Initiative points out in Wolk (2004) that “social entrepreneurs want access to
reliable sources of financing that recognize performance” (p.191).
Therefore the government can step up by supporting their initiatives through performance-
based rewards and by funding and purchasing their products and services. For example, the
RSVP’s initiative of reducing recidivism among criminal offenders, San Francisco city
managers continued funding RSVP line item long after grand funding ran out. Another example
is illustrated in Arkenstone Reading Machine that was purchased by U.S. Department of
Veterans Affair (VA) hospitals (Wolk, 2004, p.192).
Most societal innovations rely on published information provided by the government in helping
them find the target social problems and identify how many people are affected. Available
research data, funds evaluation that provide critical information documented by the
government helps in identifying problems and compare various interventions against standard
for success for those working towards solving social problems. Some of the initiatives that have
relied on government‘s data include KaBOOM and Benetech in understanding the nature of
the social problem.
For example, the federal funded ITNAmerica financed transport services that revealed the
safety concerns for older drivers that have become essential for citizens. Consensus data
provided by the government also helped social entrepreneurs predict the growing size of
American population that allowed program planning. Social entrepreneurs use government
reports to initiate projects, development and start up similar programs around the country. In
overall, government data is important in identifying social problems, setting standards and
gauging success (Wolk, 2004, p.196).
Conclusion
Research obtained from this essay argues that collaboration of any strategic plans in support of
the social entrepreneurship is particularly important to policy makers. Collaboration of
community members and the government in social entrepreneurship should therefore be
encouraged as it has seen to influence social entrepreneurship growth in the recent years.
Integration of business models and government initiative roles in utilizing market innovation
and productivity in responding to market failures, providing goods and services will decrease
administrative burdens, create transformative solutions and financial sustainable innovations
aimed at solving social problem.
The government on the other hand should shift its focus of bureaucratic rules and concentrate
on entrepreneurship innovations that provided a fertile ground for growth. In reducing New
York State’s deficit, the government should standardize contracts, make timely payments,
prioritize state funding and encourage financial support. Since social entrepreneurs facilitate
the community greater sense of partnership into the markets generated wealth, unlocking
opportunities that would have otherwise been ignored and includes community input into the
policy making process, public and private sectors partnership should always be encouraged in
order to develop solutions.
Organizations on the other hand should integrated financial and programmatic initiatives into
business activities to effectively capture organization problems and maximize their profits.
Incorporating new ideas from experts in the field of social entrepreneurship provides a fertile
ground for young and upcoming entrepreneurship growth by identifying present change in a
social economic environment. In evaluating the benefits of social entrepreneurs in our society,
it’s important for the government to award their efforts through sponsorship, purchase of their
products, prize awards and providing necessary research to facilitate their innovations.
Although there exist a variety of projects within the New Yolk state that seems to address
serious challenges faced by the society, local businessmen and social entrepreneurs are called
upon by the to mobilize their efforts in implementing solutions that will lower administrative
burdens and improve state’s accountability and lives of the local citizens. Since the process of
social entrepreneurship and its strategic goals for improving social welfare of the society
requires collaboration of different sectors across the economy, public, private and the
community enterprises should work in unity to help facilitate the initiation and maintenance of
innovative activities.
