How to Get More People of Color to Care About Social Entrepreneurship

For most entrepreneurs, there can be many reasons for starting a business — and it’s not always about money.

But I want to be clear about something: there is a huge difference between being an entrepreneur (in the traditional sense) and a social entrepreneur.

And although many of those from the traditional business community took the 2020 George Floyd protests as a sign that they should publicly go on the record and renew their commitment to creating a more socially just world, let’s not get it twisted.

This (not so new) concept called social entrepreneurship is not just some buzzword that’s been floating around in the media. It’s a movement that, if understood correctly, can reshape the American economy and help establish new norms of social justice in every part of our society.

So you know what I’ve been thinking lately? What is social entrepreneurship actually? And what does it mean for people of color? Let’s explore.

The old business model vs. the new business model

The first thing to understand is that, for the last half century or so, the American version of capitalism has been primarily influenced by one (white) man: Milton Friedman.

In 1970, Friedman wrote an essay titled, “The Social Responsibility of Business Is To Increase Its Profits.” Ever since, those words have become the gospel of capitalism.

For some, Friedman’s provocative words were validation that, in America, “greed is good” and profits are the only true goal of business. Many others saw in it an insightful capitalist manifesto that clearly outlined what executives should be doing to uphold our free market system.

So it should come as no surprise that, according to your typical textbook business owner, making it in America means that he (we still usually associate a business owner with being a man) is solely focused on generating a profit for the business’s shareholders (and there is nothing wrong with that).

A social entrepreneur, on the other hand, believes that a business can serve a higher purpose and create solutions to address society’s most pressing social, cultural and environmental challenges.

Social entrepreneurship, defined

If you asked me to define social entrepreneurship, well, here’s the thing: there is no precise definition. Depending on whom you ask, you’ll probably get several definitions for social entrepreneurship. So let’s round up the best definitions that I think speak to the topic at hand.

Some define social entrepreneurs as individuals who create new business models to address societal challenges. Others call these people “changemakers” who use innovation to improve existing systems.

Still, others see social entrepreneurship as a way to use for-profit models to create positive social change.

Martin and Sally Osberg offer a more rigorous definition. According to them, social entrepreneurship isn’t just about making money. It’s about changing people’s lives for the better.

Regardless of which definition you use, there is no doubt that social entrepreneurship has become increasingly popular these days, especially among young professionals.

The heroes of social entrepreneurship

So if it’s so cool to be a social entrepreneur these days, why don’t we know more about their businesses? And here’s the million dollar question that everyone on Wall Street is wondering: Are they making a profit?

I’m happy to report that some contemporary well-known and lesser-known social entrepreneurs include:

  • TOMS: When the company was founded, it applied its “one for one” concept to shoes. For every pair of shoes purchased, TOMS donated a pair of shoes to a needy child. The company has since extended the one for one concept from just shoes to other products.
  • Grameen Bank: Founder Muhammad Yunus provides micro-loans to those in need to help them develop financial self-sufficiency. Yunus received a Nobel Prize for his work in 2006.
  • Homeboy Industries: Jesuit priest Fr. Greg Boyle founded Homeboy Industries in 1988. Over the decades, the organization has helped thousands of people who were formerly involved in gangs or incarcerated by providing them with jobs and training. As an organization, Homeboy Industries brings in millions of dollars each year. Of that amount, $5 million comes from its social enterprise businesses. These businesses include a bakery and catering service that subsidize the organization’s social programs and offer a second chance to people who were previously involved in gangs or incarcerated.
  • Whole Foods: I’m sure most people are aware of Whole Foods now that it’s owned by Amazon. But most people might not know that the idea of “conscious capitalism” gained mainstream attention when Whole Foods founder John Mackey published a book by the same name.
  • All the businesses that are part of the B Corp movement.

Now here’s the billion dollar question I want to pose after name-dropping these heroes of social entrepreneurship: If social entrepreneurship is so popular…and if there are plenty of examples of other social entrepreneurs who have found success, why isn’t every person of color who wants to start a business joining this movement?

The relationship between entrepreneurship and justice

This is where it gets complicated, but I’m reminded why I felt inspired after watching the PBS documentary, “BOSS.”

The film chronicled the Black experience in business over 150 years, and it showed that there are plenty of examples of successful African Americans who started from the bottom and ended up being moguls at the top of million-dollar empires.

The film also highlighted the stories of resilience and resistance within the Black community as people faced racism, economic exclusion, segregation and discrimination.

Out of that resistance, we have seen some great Black entrepreneurs emerge: Biddy Mason, Paul Revere Williams, Madam CJ Walker, Cathy Hughes and Robert F. Smith, just to name a few.

One thread you’ll see among those Black entrepreneurs (and many entrepreneurs of color, in general) is that, in addition to figuring out a way to overcome racism and create economic opportunity in this country, they have often felt compelled to create pathways for other people who look like them. In doing so, many people of color have been able to create generational wealth for themselves.

So when business leaders try to get people of color to jump on the social entrepreneurship bandwagon these days, I think they’re met with some skepticism because it often sounds like another form of charity, which isn’t helping anyone.

What gets missed is that many communities of color have been putting social entrepreneurship into practice for years.

It just so happens that no one put a name to it until recently.

That’s why I think there needs to be an emphasis on something bigger if we want more people of color to become social entrepreneurs. That bigger thing is justice.

When we add justice to the equation and talk about social justice entrepreneurship, it becomes an entirely different conversation.

You see, social justice entrepreneurs believe that those closest to a problem are the ones who can solve it. They work closely with communities, and ideas are born out of collaboration — not controlling behavior or assumptions.

Social justice entrepreneurs are about equity, not just equality.

Social justice entrepreneurs are wary of using terms like “scale” to describe the growth of their companies because they believe human lives should be cherished, not counted.

Social justice entrepreneurs believe that, once they have a foot in the door, it’s their duty to kick it open to let the whole world in. (Thanks for the inspiration, Lauren A. Burke!)

Key takeaway

I think social entrepreneurship provides the perfect opportunity for people of color to take advantage of the business opportunities that are opening up in this new era of conscious capitalism. We already know that entrepreneurs from diverse backgrounds can not only create jobs but also create wealth in parts of the country that will lift entire communities.

But if we really want this movement to take off, it needs to include — say it with me — justice.

Once entrepreneurship and social justice are linked — and not seen as opposing ideas — you’ll start to see more people of color running successful businesses and more generational wealth created. You’re welcome, America!



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Martin Ricard

I write about social entrepreneurship and social justice. Learn how I’ve helped other mission-driven leaders succeed: