Defining the Space for Social Entrepreneurs
It is a common misconception that Causeway exists to start new nonprofits in Chattanooga. Really, we’re just interested in helping people find the smartest ways to solve our city’s problems. Sometimes that means a new nonprofit needs to be formed, but usually there’s another way. It’s easy to see where the confusion comes from. Traditionally, things have been pretty black and white. You’re either a nonprofit, focused on helping people, or you’re a for-profit, focused on making money. But what if the strongest, most sustainable solutions to society’s problems lie somewhere in-between those two worlds?
Globally, there is a growing movement of “social entrepreneurs”. Next week, Causeway is sponsoring the social track for Chattanooga’s second Startup Week. But what does it really mean to call yourself a social entrepreneur?
An entrepreneur is someone who takes a personal risk to start a business. A social entrepreneur is someone who takes on that personal risk, not just for the promise of profit, but with an eye on social change of some kind. But, does that mean the thing they are starting is a new nonprofit organization? Not necessarily. As the social entrepreneurship movement grows, it is becoming more necessary to define that gray area in-between traditional businesses and traditional nonprofits. There are several new terms, laws and even hashtags that are trying to do just that.
Social Enterprise, or “#socent”
A social enterprise is an organization that applies commercial strategies to maximize impact in human and environmental well-being — this may mean maximizing social impact rather than profits.
Social Return on Investment or “SROI”
Social Return on Investment is a method used to measure the social value of something in relation to the resources that were invested in that thing. So a good SROI means that the social change you saw was worth the money or time that you invested to make it happen.
The Triple Bottom Line, or the “TBL”
The TBL is an accounting framework that looks at a business’s performance through three lenses: social, environmental and financial. They are often referred to as the 3 P’s: people, planet, profit. Hear from a panel at Causeway next week to learn about how you could incorporate this practice into your business.
Benefit Corporations or “B-Corps”
A B-Corp is a type of for-profit business, authorized by 30 states, that includes positive impact on society and the environment, in addition to profit, as its legally defined goals. Tennessee just passed a law validating B-Corps in our state. Come to 10 Things You Need to Know About Tennessee’s New B-Corp Law to learn about what that means for your socially-minded startup.
Whether a social entrepreneur is starting a for-profit business, a nonprofit organization, or something in-between, they all have a few things in common. Social entrepreneurs measure their success based on factors beyond profit. They are finding smart ways to use business principles to improve people’s lives. They are the connecting point between advocacy and action.
In the last decade, Chattanooga has become known as a breeding ground for entrepreneurs. What if every entrepreneur in Chattanooga was focused on the triple bottom line? The collaborative spirit in Chattanooga is tangible. What if we became known as a city that solved problems, unrestricted by the labels of for-profit or nonprofit? Where are there opportunities for Chattanooga’s nonprofits and businesses to step into this new space, in-between their two worlds, to solve our city’s problems together?
